Pessimistic hospitality businesses

Gábor Tolnai
head of marketing insight division
Kantar Hoffmann

At Trade magazin’s Business Days 2022 conference Gábor Tolnai, head of Kantar Hoffmann’s marketing insight division, presented the results of a HoReCa survey, which they had done with the participation of 100 restaurant owners and managers (60% from Budapest and 40% from the countryside). 41% of the respondents view their situation negatively – after Covid this proportion was only 27% – and only 29% said their current situation is alright.

Problems

Typically respondents worry about the inflation, uncertainty and instability. They calculate with growing operating costs and 70% think they are going to lose guests. There is still 3% who think that hospitality is undergoing an upturn. Owners and managers reckon that the way forward can be offering premium quality service, and another possible direction can be using domestic cooking ingredients. The HoReCa sector is still ridden by workforce problems too. 80% of respondents said many people are unwilling to return to the hospitality sector after the pandemic. 88% of restaurant owners have to get by having fewer workers than they actually need.

96% of respondents are of the opinion that ingredient prices will increase more, 95% said the same about energy prices, 94% calculate with higher transportation and storage costs, and 91% believe salary costs will also rise. The majority believe that the recession is here to stay, and its effects will still be felt in 2023. In 65% of restaurants the majority of guests are Hungarian, but 54% hopes that in the near future foreigners and Hungarians will represent the same proportion in their clientele.

Expectations

61% are worried that they will have to close their restaurant for good. 50% think sales will drop and 30% reckon that sales will neither increase, nor decrease. Last year 50% of respondents said a price increase won’t be possible for them, now 81% believe that it is absolutely necessary. So far in 2022 restaurants raised prices by 25% on average, but 18% of respondents increased prices by more than 30%; what is more, they plan another 17% increase already this year. Still, only 25% of restaurant owners and managers are hopeful that they can compensate for rising energy and ingredient prices this way.

90% of respondents are waiting for financial help from the government, typically in the form of wage subsidies and tax cuts. 60% think that getting money from the EU isn’t out of the question either. 40% of restaurants want flexibility and better conditions from suppliers. //

This article is available for reading in Trade magazin 2022/11