Economy & Politics

Despite a fresh start: gastronomy threatens bankruptcy

A full café in downtown Mannheim. Display stands contain information on distance control and hygiene requirements for entry.
A full café in downtown Mannheim. Display stands contain information on distance control and hygiene requirements for entry. imago images / Ralph Peters

Prominent restaurateurs warn of “dying in installments”. After the first nationwide easing, your association draws a frightening balance, which can lead to fears of a soon bankruptcy: Although Germany’s innkeepers and hotel owners have been able to open again for a few weeks, the onslaught fails to materialize. According to a survey by the industry association Dehoga, four out of five companies were less than half full. Only one in five was able to match more than half of previous sales.

As a result, the sales expectations for the openings, which were made possible thanks to falling infection numbers with Covid-19, were not met – at least on average. With the restrained turnover, the innkeepers cannot import fully raised operating costs at all.

It remains a dramatic exceptional situation, says Ingrid Hartges, chief executive of the Dehoga federal association. “Despite a new start, the entrepreneurs are still fighting for survival and jobs.” The corona requirements such as distance requirements, contact restrictions, significantly higher hygiene standards and new documentation and registration requirements meant much higher expenses with massive sales losses and high costs. Not to mention corona-related loan liabilities or deferrals.

Many wanted to reward themselves

Here and there, there was a lot of catching up to do, especially on the previous holidays. After a long period of abstinence, customers more than gratefully accepted the gastro offer. Especially in outside areas, the hygiene and minimum distance rules for socializing seemed to have no effect. But the reservation book is rarely full (see below). In many places, the first wave of euphoria seems to have subsided quickly.

In economic terms, the restart is far from paying off for the restaurateurs. According to a Dehoga survey of 8,000 members at the end of May, eight out of ten companies stated that they would inevitably make losses under the conditions. After the restart, almost every third restaurant (31.9 percent) reported sales of only a quarter to half compared to the previous year. Another 30 percent were under a quarter, and 17 percent generated less than a tenth of normal sales.

Biggest drop in sales since the beginning of the time series

The Federal Statistical Office reported the largest drop in sales since the beginning of the time series in 1994 with a 45.4 percent loss compared to the same month in the previous year. Overnight stays in hotels and other accommodation establishments were only prohibited from March 18, and restaurants were except from Pick-up and delivery services will be completely closed from March 22nd.

However, the industry association does not expect any relief from the economic stimulus package that the federal government has put together for the domestic economy against the fatal consequences of the pandemic. Although the bridging aids are essential for survival, they were not sufficient because they are limited to the months of June to August. An expansion to seven months is imperative.

It is all the more important now that the announced aid for the hospitality industry “flows quickly”, warns Dehoga managing director Hartges. The degree to which companies are affected must be more important than size or number of employees. The eligibility to apply – at least 60 percent less sales in April / May and continuously from June to August at least 50 percent – should meet most hosts. 50 percent of the fixed operating costs are reimbursed, up to a maximum of 80 percent if 70 percent of sales have been lost. And a tax advisor has to check it all.

Personal-Financial.com interviewed some innkeepers directly. Here they describe joy and sorrow:

“The reservation book is full”

Kevin Fehling has been owner and chef of the The Table restaurant in Hamburg since 2015, which received three Michelin stars in the opening year.
Kevin Fehling has been owner and chef of The Table restaurant in Hamburg since 2015, which received three Michelin stars in the opening year.

Kevin Fehling from the three-star restaurant The Table Hamburg:

Due to the reduction in the number of places in the restaurant, the business is unfortunately not quite as economical as it was before. But overall we are very happy that we were allowed to open again and I am now convinced that this was the right step. Because of the health situation and the risk of infection, I initially questioned it. But after nine weeks it was just necessary to go back to work. Otherwise you will reach your limits.

The demand is extreme at the moment, with some seeming to cry out as the “reward center”. Unfortunately we cannot accept as many guests as we would like. The operation still pays off anyway. At the moment we feel a very positive energy from our guests, which I would not have thought. The reservation book is full.

The most important thing is to me, and it is not an empty phrase that no employees are infected. The biggest challenge is to be as economical as possible and to keep the employees in a good mood as positively as possible. I’ve always been a stand-up man, and I don’t let it get me down.

We got the emergency aid for the restaurant relatively quickly. But it wasn’t so smart to inform a day before the opening that you could open again tomorrow. After more than nine weeks of closing, we went through the rags for a whole week. But you have to honestly say that it is a strange situation for everyone. Ultimately, I’m just glad that we’re open again.

“Don’t lose the spirit”

Janina Atmadi, managing director theNOname in Berlin:

In the first few weeks after the reopening, we prepared a reduced five-course menu for the fine dining evening. The first two days were very promising – almost fully booked. Unfortunately, the euphoria of the guests after Corona did not last over the next two weeks. Our location in central Berlin is central, but very dependent on tourists. For the lunch business, therefore, there are few walkers or walkers. And our evening offer is only booked slightly. It is also difficult to keep the spirit of optimism high with the distances and requirements.

We cannot work profitably. We maintain the products developed during the Corona period, such as bowls from the lunch and to go concept from noon to afternoon. However, we still had a big drop in sales. From an economic point of view, every entrepreneur is experiencing that the grants do not cover this long period.

We have to rethink, because tourists and business travelers as the target group are largely eliminated. The local companies and office locations in our area learned to appreciate the home office during the Corona period. This target group is also dropped. The Berliners in Mitte feel like they cook a lot at home. In addition, many apartments in our immediate vicinity are holiday apartments and are currently not used. Our ideas for new event formats are still pending.

Our district suffers a lot from the lack of tourists and so the original business plan does not work in these times. We are working on new concepts and “thinking around the corner” in order to reach Berliners with a different offer. At the moment it’s about surviving and not losing motivation and spirit!

“Hoping for an expansion of outside areas”

Minh Dao, managing director of Transit Hamburg:

The Corona crisis hit the entire catering scene very hard. Despite the long-awaited opening, with a third of the tables it is not nearly the same atmosphere as in normal operation. Apart from that, we also expect only a third of the turnover in a third of the tables. Again, we cannot cut the kitchen and service staff to the same extent, otherwise the quality will suffer. Our tapas live from the local atmosphere and must be eaten directly, so a delivery service is not a satisfactory substitute either for us or for our guests.

We hope that the next controlled easing will come soon. We hope that the city and the local officials will understand the current emergency situation and provide long-term solutions for the restaurateurs. Hopefully more will come from the city. I am thinking of an expansion of outdoor areas and special permits. That would be a good step to support the industry in the long term.

Nevertheless, we are pleased that things are slowly returning to normal, and even more for long and hopefully carefree summer nights on the shoulder blade in Hamburg.

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