Vacation Period Midway: Blended Results for Accommodations and Eateries
Mecklenburg-Vorpommern's catering industry is facing ongoing struggles, with a 18% decrease in turnover compared to pre-pandemic levels in 2019. The industry's woes can be attributed to several key factors, including a low share of foreign tourists, tourism infrastructure uncertainties, reputational and service quality issues, and competition and coordination deficiencies.
Foreign tourists make up a mere 3% of the total 32.9 million overnight stays in Mecklenburg-Vorpommern, indicating a relatively low level of international tourism that limits catering sector growth. This untapped potential suggests that the industry remains heavily reliant on domestic tourism, which may have not fully recovered post-pandemic.
The sale and uncertain future of Rostock-Laage Airport, a crucial gateway for tourists, raise concerns about maintaining and increasing tourist arrivals. The airport’s instability has triggered fears it could restrict growth in inbound tourism. Less inbound tourism directly impacts catering revenues in the region.
Anecdotal evidence from tourist reviews reflects dissatisfaction with some catering establishments, such as poor food quality, limited payment options, and additional charges, which could dampen repeat visits and spending in the hospitality sector.
Water tourism, which generates about one billion euros annually and employs many people in related catering, could provide a significant boost if better coordination across states and improvement in infrastructure (like locks and waterways) were achieved. Defective locks and personnel shortages have previously damaged industry reputation and may contribute to decreased turnover.
The current black-red coalition is aiming to make the reduced VAT rate of 7% permanent from January 1, 2026, providing some relief to the struggling industry. However, the VAT rate on food in the catering industry was only reduced from 19 to 7% from January 1, 2025, and had previously been a significant burden.
Restaurateurs are feeling the impact of vacationers opting for cheaper alternatives, such as skipping appetizers, a second drink, or dessert, and buying cheap wine from the supermarket instead. Some restaurants are closing on certain days or reducing their opening hours, while many are experiencing a collapse in lunch business.
The main summer season for hotels and catering businesses in Mecklenburg-Vorpommern has been rather modest this year, and the duration of guests' visits at restaurants has become significantly shorter. The additional costs of the statutory minimum wage, which will increase to 14.60 euros per hour by January 1, 2027, have also put pressure on the industry.
Lars Schwarz, president of the German Hotel and Catering Association MV, stated that restaurants had to raise their prices due to the return to the 19% VAT rate and the additional costs of the statutory minimum wage. The additional costs of the statutory minimum wage have increased by almost 40% over the past five years.
Despite these challenges, there is some good news for the industry. Hamburg's traditional restaurant scene is thriving, offering a stark contrast to Mecklenburg-Vorpommern. As the industry in Mecklenburg-Vorpommern continues to navigate these challenges, it remains an "odd one out" compared to other European regions.
The low proportion of foreign tourists in Mecklenburg-Vorpommern, comprising only 3% of the total overnight stays, points towards a dependence on domestic tourism, which may not have fully recovered post-pandemic. This reliance on domestic tourism, coupled with the potential restrictions on growth due to the instability of Rostock-Laage Airport, could significantly impact catering sector revenues in the region.
The quality of service and food in some catering establishments, as evidenced by tourist reviews, may contribute to decreased turnover, as dissatisfaction can deter repeat visits and spending within the hospitality sector. On the other hand, the improvement of coordination across states, infrastructure development in water tourism, and the proposed permanent reduction of VAT rate from January 1, 2026, might provide some relief and boost to the struggling industry.
