Luxembourg’s hospitality industry is grappling with severe financial pressures, HORESCA federation president Alain Rix told our colleagues from RTL Radio on Wednesday. “After the pandemic, prices have skyrocketed, and there is nothing left in our tills,” he said, noting that profit margins have plummeted from 20% to just 4-5%.
The sector faces a perfect storm of rising operational costs – including electricity, waste disposal, and water – and changing consumer habits. “The customer has changed,” Rix explained, “they have to make savings and don’t spend as much anymore.” Where diners might have visited restaurants two or three times a month, many now cut back to once, skipping extras like wine or coffee. “We no longer have enough to really make a living from it,” he added.
The numbers paint a stark picture: Luxembourg now has 1,261 restaurants and 741 bars, but over 200 bars have closed in recent years. The downturn is “particularly devastating in the countryside”, Rix said, where vanishing village bars and hotels threaten local tourism. “No hotels means no tourists – they go together.”
Staff shortages continue to plague Luxembourg’s hospitality industry, prompting calls for more adaptable working arrangements. The HORESCA federation is advocating for “greater flexibility in working hours throughout the year” to make sector jobs more appealing, a move that would require special labour regulations. Discussions are currently underway with the Minister of Labour.
Current rules exempt HORESCA businesses from paying Sunday work premiums – a provision the industry says is critical to survival. “If we had to cover Sunday supplements, we might as well shut down immediately,” warned Rix.
Despite these challenges, Rix struck a cautiously optimistic note. “There will always be people who enjoy dining out,” he said, emphasising the social value of restaurants. He also noted the rise of restaurant groups, which allow for greater staffing flexibility across locations.
Rix acknowledged another hurdle: remote work. “The increase in teleworking hasn’t helped us,” he said, welcoming recent corporate return-to-office mandates as a potential boost for lunchtime business.
