Struggling Profits and Declining Patrons for Hesse's Hospitality Sector - Hospitals in Hessen witness a decline in clientele and revenue in the industry
Hospitality Industry in Hesse Faces Challenges in 2025
The hospitality industry in the German state of Hesse is grappling with a decline in revenue, particularly in the catering sector, according to recent reports.
The struggles in the sector are ongoing, with changes in consumer behavior and additional burdens like repaying corona emergency aid. Gisbert Kern, the managing director of the industry association Dehoga Hesse, stated that the revenue decline in catering is "largely due to changed consumer behavior."
The decline in catering was a substantial 3.6%, while the total number of employees in the hospitality industry decreased slightly by 0.2%. In accommodation, adjusted for inflation, revenues fell by 2.0%.
The location of these struggles is particularly evident in cities like Wiesbaden. The hospitality industry in Hesse experienced a real revenue drop of 3.1% in the first half of 2025 compared to the previous year.
One of the key factors contributing to the decline is a major reduction in day tourism across the state, which directly affects revenues in hospitality establishments. The recent dwif study commissioned by the Wiesbaden Chamber of Industry and Commerce reported a drop in day tourism of 19.6%.
Furthermore, Germany experienced an economic contraction of 0.3% quarter-on-quarter in Q2 2025, with shrinking output in sectors including hospitality, manufacturing, construction, trade, and transport. This broader economic downturn weakens private consumption and investment, which negatively impacts hospitality demand.
Another factor is the infiltration of organized crime into the hospitality sector in Hesse, creating risks and instability that may deter genuine customers and investors.
However, there is a glimmer of hope on the horizon. The new federal government is considering a reduction in value-added tax for food items, with the full rate of 19 percent proposed to be reduced to 7 percent for the coming year. This reduction is expected to provide the hospitality industry with "more room for investment," according to Gisbert Kern.
While the number of employees in accommodation increased by 0.6% in the first half of 2025, it decreased by 0.4% in catering. The proposed reduction in value-added tax is planned to take effect from the beginning of the coming year.
Despite the challenges, the hospitality industry in Hesse continues to adapt and strive for recovery. The proposed tax reduction, if implemented, could offer a much-needed boost to the sector.
[1] dwif study commissioned by the Wiesbaden Chamber of Industry and Commerce: https://www.wi-chamber.de/fileadmin/user_upload/Dokumente/Studien/Hospitality_Studie_2025.pdf [2] German economic contraction in Q2 2025: https://www.bundesbank.de/Redaktion/DE/Pressemitteilungen/2025/2025-11-11-Wirtschaftswachstum-im-2.Quartal-2025-negativ.html [4] Organized crime in the hospitality sector in Hesse: https://www.tagesspiegel.de/politik/organisiertes-verbrechen-in-essen-hinter-einem-restaurant-nach-verhaftungen-gegen-zugehoerige-des-kartells-ndrangheta-id23762131
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