The outlook for the hospitality industry for 2025 and 2026 is moderately positive, with expected volume growth of 1% to 1,5%. Thanks to improved purchasing power, spending in the hospitality sector will increase this year. However, persistently low consumer confidence continues to slow growth. Relatively high inflation will continue to affect the hospitality industry this year, and prices are expected to rise by an average of 5%.
There's a growing divide among hospitality businesses within the sector, leading to more bankruptcies and closures. Technology offers new opportunities: thanks to AI, hospitality businesses can reduce waste and increase their revenue.
Turnover growth, particularly at restaurants and catering companies
In the first quarter of 2025, turnover growth in the hospitality industry was 3,4%. This growth was primarily achieved in the food & beverage segment (+4,4%), particularly in canteens & catering and restaurants. ING payment data shows that the upward trend for restaurants continues in the second quarter, thanks in part to the sunny weather in April and May. Between January and May, restaurants achieved 6,5% turnover growth and 1,5% volume growth.
Hotel industry outlook positive
The outlook for the Dutch hotel industry is positive again this year. Just like last year, a 4% growth in the number of hotel overnight stays is expected again by 2025. Consumers are increasingly opting for short breaks in their own country. And despite the higher prices, both domestic and international hotel guests are still willing to pay. The number of hotel overnight stays is expected to continue growing in the coming years. The Netherlands is becoming increasingly attractive as a travel destination, partly due to our temperate climate, stable geopolitical environment, and relatively high level of service.
Price-sensitive consumers will respond to VAT increase
A challenge for the hotel sector is the increase in the low VAT rate for accommodation from 9% to 21% in 2026. This means that, from 2026 onwards, hotel rooms and cottages at holiday parks will become 11% more expensive than they are now. Camping sites are exempt from this scheme. The price increase is expected to be largely borne by hotel guests. It is still difficult to say to what extent this will deter them. A hotel stay is certainly a luxury for most consumers, something they are more likely to cut back on than more essential goods and services, such as food and hairdressing. At the same time, hotel guests have so far been undeterred by the sharp price increases of the past three years. This may partly lead to a shift towards cheaper locations or cheaper accommodations.
Average 5% higher prices in 2025
In 2024, prices in the hospitality industry rose by an average of 6%. This was necessary to (partially) offset higher rent, purchasing, and personnel costs. For example, collective bargaining agreement wages in the hospitality industry rose by an average of 10,7% last year. The largest price increases last year occurred at bungalow parks (+9,5%) and hotels (+7,6%). Prices in the hospitality industry are expected to rise by 5% this year, which, while lower than in the previous three years, is still higher than inflation in the Netherlands.
Further price increases due to higher personnel costs
The expected 5% price increase is primarily due to rising food prices and rising personnel costs. According to the hospitality industry's collective labor agreement, all hospitality employees received a 2,5% pay raise at the beginning of this year and an additional 1% as of July 1, 2025. These wage increases are necessary to remain competitive compared to other sectors when it comes to recruiting staff. Although the labor market has eased somewhat, almost four in ten hospitality businesses still face staff shortages.
Higher costs are not fully borne by the guest
Annual price increases are necessary to prevent pressure on profit margins. However, not all hospitality businesses can fully pass on the higher costs to their customers. This is especially true for restaurants and cafes. After all, if the price of a beer or a meal becomes too high, customers will stay away. Other measures to maintain profit margins include limiting the menu, offering smaller portions, and focusing on sales of higher-margin products, such as specialty beers and cocktails. For hospitality businesses that only partially pass on the higher costs to customers, this means that part of the higher costs is deducted from the profit margin, which can lead to financial problems.
Significantly more bankruptcies in the catering industry
The pressure on the hospitality industry is reflected in the trend in the number of bankruptcies. Due to limited growth, higher personnel and purchasing costs, and a coronavirus debt that needs to be repaid, 377 hospitality businesses went bankrupt last year. This was 110 more than in 2023. The bankruptcies primarily concerned restaurants, snack bars, and cafes. This year, the number of bankruptcies between January and May was comparable to the same period in 2024. The number of bankruptcies is expected to remain high this year, partly due to relatively high inflation and limited growth.
Many business closures among restaurants and cafes
Incidentally, not only are more hospitality businesses going bankrupt, but there are also more business closures, both voluntary and involuntary. In both the first quarter of 2024 and 2025, a significant number of hospitality businesses closed their doors, particularly restaurants, cafes, and catering companies. There is a growing divide within the sector. On the one hand, there are hospitality businesses successfully responding to changing market conditions and consumer preferences with innovative concepts. On the other hand, there are businesses unwilling or unable to make this transition, often due to the owner's age, limited resources, or financial difficulties. These are often the businesses that either go bankrupt or close their businesses themselves.
Less waste and more turnover thanks to AI technology
In a competitive sector where margins are under pressure, such as in restaurants, artificial intelligence (AI) offers opportunities. For example, AI technology can accurately predict expected crowds based on historical sales data and weather forecasts. Adjusting inventory accordingly reduces waste. Furthermore, using available customer data, restaurants can increase their revenue by offering personalized offers to regular guests, such as discounts, free drinks, or special menus. While this has long been commonplace in the airline and hotel industries, it's still relatively unknown in the restaurant sector. This not only allows for more efficient operations but also increases revenue. AI thus strengthens the strategic position of hospitality entrepreneurs in an increasingly competitive market.
More information: www.ing.nl