However, despite the increased footfall, the industry confronts hurdles, with concerns raised about staffing shortages and complex administrative procedures, says François Koepp, Secretary General of the Luxembourg Federation of Hotels, Restaurants, and Bars (HORESCA).
Koepp highlights a significant decline in industry margins, plummeting from 8 to 12% to a precarious 3 to 5%. While sales are on the rise, greater costs disproportionately impact overall profitability. Koepp emphasises that the goal is not excessive profits, but ensuring a sustainable financial outcome at the end of the year.
Comparing 2019 turnover with 2023, Koepp notes that margins have hit rock bottom due to escalating costs. Despite a positive increase in earnings and sales compared to 2019, the bottom line remains disappointing as businesses contend with higher salaries, increased costs of goods, and elevated electricity expenses.
Koepp suggests that customers are spending roughly the same amount in restaurants, but higher prices have led to reduced consumption. Despite this, customer demand remains evident, with reservations for New Year’s Eve booked to full capacity in mid-November, an unexpectedly early occurrence.
Restaurant operator Jean-Michel Zang echoes the positive trend in reservations, returning to 2019 levels. However, Zang stresses the difficulty in recruiting qualified staff, a challenge exacerbated by the lingering impacts of Covid-19. The workforce shortage in both kitchen and dining areas poses a formidable obstacle, making the sector’s future staffing landscape uncertain.
A critical issue is the dwindling motivation among workers, leading many to pursue alternative career paths. Contributing factors include extended commutes, traffic congestion, and the high cost of housing in Luxembourg. Additionally, the allure of remote work in alternative professions poses a new hurdle, according to François Koepp.
Koepp acknowledges the need for inventive solutions to rejuvenate the sector’s appeal. Proposing potential adjustments to time models, he suggests exploring a four-day workweek with extended hours, such as ten-hour shifts, as a means to entice and retain staff. Reflecting on the changing work landscape, Koepp emphasises the importance of considering new career structures within larger organisations to foster employee retention.
Recognising the potential impact of administrative simplification on the industry, Koepp expresses hope that promises made by the government will materialise, alleviating some of the bureaucratic burdens faced by the hospitality sector.
Full report by RTL Télé (in Luxembourgish and French)
