The state of Luxembourg’s hospitality sector is far from healthy, warned MP Dan Hardy of the Alternative Democratic Reform Party (ADR) during a recent parliamentary debate. Speaking during a current affairs debate, he argued that the Horeca sector – comprising hotels, restaurants, and cafés – is still struggling in the aftermath of the COVID-19 pandemic and should now receive targeted financial support to stay afloat.
One possible measure, Hardy suggested, would be to provide compensation to businesses still in the process of repaying repayable aid they received during the pandemic.
In response, Economy Minister Lex Delles referenced the findings of the recently published ‘Retail Report’, which he argued paints a more nuanced picture of the sector. While the number of cafés and bars has declined, hotel numbers have remained stable, and the number of fast-food establishments has grown significantly.
According to Delles, the main challenges for the sector today are high energy costs and general inflation.
However, Delles rejected the idea of offering compensation for repaid state aid. He pointed out that €23.5 million in repayable advances were distributed to hospitality businesses during the pandemic, and around €14 million have already been reimbursed.
The minister stressed that the terms were always clear – the money had to be paid back – and therefore it would be inappropriate to offer compensation now.
Delles further argued that compensating those who took the aid could be unfair to businesses that deliberately chose not to apply for it, either out of principle or because they used private funds instead. Offering compensation now, he suggested, would amount to rewarding those who took advantage of the scheme, while disadvantaging those who did not.
He also questioned why such compensation should apply only to the hospitality sector and not to others equally affected by the pandemic, such as construction or industry.
Separately, the ADR submitted a motion calling for a significant VAT reduction on beer and wine. The party argues that such a move would not only benefit the Horeca sector but also provide indirect support to local breweries and winemakers.
A vote on this motion is expected in a future parliamentary session.
