Restaurants will get more expensive in 2023, and more will go bankrupt anyway, says ING
The hotel sector will continue to suffer from high purchasing costs, rising wages and soaring energy prices. Because businesses partially pass these costs on to customers, the costs of a restaurant or cafe visit will likely increase, ING researchers said. Due to these problems, more hotel businesses will also close permanently in 2023, the bank said in its analysis of the sector for the coming year.
Prices in restaurants and cafes are expected to increase by 8% by the end of this year, largely due to rising shopping costs, the bank said. The price of beer alone has increased by 12%, while the costs of coffee, bread and butter are also higher. Added to this are the increased costs of energy and personnel costs. Next year, prices will rise another 3%, ING predicted.
ING also noted that customers are spending less based on the total value of debit card transactions. This may be the result of high inflation and low consumer confidence. For example, the value of debit card payments at hotels, restaurants and cafes fell 1% in the third quarter compared to the second quarter of this year, ING reported. This happened despite rising prices in restaurants and cafes, indicating that overall volumes in the foodservice sector have declined. Customers are more likely to skip an extra beer or eat less at restaurants in general, analysts speculated.
Also, the hospitality industry cannot pass all the costs on to the consumer just because customers won’t come to visit us. Hotels are in a relatively better position in this respect, ING said. For example, prices in hotels increased by a quarter in the third quarter compared to the end of 2019.
High costs are expected to impact the hospitality industry next year. ING estimates that the number of bankruptcies and business closures will increase in 2023 compared to this year.
Some of these companies just started repaying coronavirus loans and grants last month. This will likely add to the financial problems of some entrepreneurs.