The German hospitality sector has experienced only a marginal improvement in sentiment as the peak travel season begins, according to a report released Thursday by the Ifo Institute in Munich. While the business climate index for the industry edged up for the fifth consecutive month, rising from -16.5 to -15.3 in June, a sense of pessimism continues to dominate.
“Despite overall consumer caution, many segments were actually benefiting from stable demand” noted Caroline Vogel, industry expert at the Ifo Institute. “However, the start of 2025 proved somewhat challenging and the effects are still being felt. The outlook for the summer season also offers little cause for optimism.
A significant 58 percent of accommodation providers surveyed in April cited weak demand as a barrier to growth, a considerable increase from just under 40 percent a year prior. Facing this subdued customer base, a greater proportion of businesses are now considering job cuts in the coming three months. While the issue of labor shortages remains relevant, its prominence appears to be diminishing slightly. Nevertheless, 41 percent of surveyed establishments still reported difficulties in filling qualified positions.
Despite the overall cautious outlook, businesses have revised their assessments of the current business situation and future expectations upward compared to the previous month. The business situation index rose from -9.2 points in May to -7.9 points in June. Business expectations also saw a slight increase, climbing from -23.6 points to -22.4 points.
The hospitality sector encompasses all establishments offering overnight accommodation for a fee, including hotels, guesthouses, inns and similar facilities such as vacation rentals, hostels and campsites.
