Dutch Hospitality Industry Faces Uncertain Future

The atmosphere at Horecava, the largest hospitality fair in the Netherlands, is both optimistic and concerned. Last year, the sector saw a 4% increase in revenue, but challenges loom for Dutch hospitality businesses.

Rising costs across the board have led consumers to spend less. The revenue increase was largely due to price hikes, as fewer people dined out or visited cafes.

The exponential growth driven by young adults in recent years has waned; only a quarter of Generation Z now dines out weekly, down from half in 2022. Companies have noticed young customers spending less, with fewer coffees and takeout meals being purchased.

A wet spring in 2024 also contributed to the decline, according to the Foodservice Institute. Inga Blokker, the institute’s director, notes that consumers now perceive dining out as expensive.

While high-end restaurants remain unaffected, lower-cost dining venues and delivery services are struggling as more people opt for supermarkets. The price gap between high-end and cheaper restaurants has narrowed, leading consumers to favor the former.

Although the sector remains viable, ABN Amro forecasts a challenging year ahead, with potential increases in bankruptcies, particularly among smaller establishments. The bank predicts 450 closures in 2024, double the number from 2023.

Royal Horeca Netherlands (KHN) attributes decreased dining out to rising costs, which force businesses to increase prices. KHN Chair Marijke Vuik notes that rising costs due to inflation, increased wages, and higher supply prices leave businesses with no choice but to raise prices, despite slim margins.

Despite these challenges, some entrepreneurs see opportunities, particularly in hiring available staff from failed businesses. The surge in hospitality ventures over recent years has led to saturation, where niche businesses, like those combining specific themes and services, have stretched resources thin.

Source: NOS

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