High costs, more expensive drinks: restaurants raise their prices

“We end the year with better figures than 2019. And I’ve never had to tell guests so often,” says Saskia Geraeds, owner of the Huize Koningsbosch hotel-restaurant in Castricum, about bookings with her company. Last year was good. Meetings, going out: there was an enormous need, says the entrepreneur in conversation with RTL Z.

Even more expensive

After two “heavy corona years”, consumers have found their way back to the hospitality sector. Turnovers are back on it level since before the pandemic. However, Geraeds raised its prices in November: accommodation, food, drink, became between five and ten percent more expensive. “And I don’t rule out other increases coming this year.”

And it’s not the only one, as evidenced by a group of entrepreneurs at the Rai’s Horecava fair in Amsterdam. The high energy bill, the purchase of more expensive food, the increase in wages for staff, or lack thereof. It’s all about it. Some business owners are also eyeing significant rent hikes, they say.

‘don’t get out of it’

You don’t want to alienate your customers or price yourself out of business, but you’ll still need to recoup those higher costs, says entrepreneur Sander Wind of FortVier in Arnhem. “You hardly get out of those price hikes,” he says. It’s one of the few buttons that can still spin to get good edges.

As well as controlling costs. “We have an A energy label, we do everything electrically. Yet the energy bill has doubled,” he says of those costs. In times of high inflation and tight labor markets, it is also not easy to cut personnel costs. The minimum wage just went up. “We have adjusted our entire wage house upwards.”

No more fries

Jan-Bas van Aalderen of Groningen’s Museumcafe Het Pomphuis has adapted his card to cut costs, he says. Now you can only eat fried snacks with drinks. At other times, there are more energy-efficient snacks, such as cheese and meatballs. “A fryer that doesn’t roar all day anymore? It makes a huge difference in energy costs,” he says.

Prices have recently increased by about ten percent, says the entrepreneur. “Meat dishes have gotten more expensive, a veggie burger hasn’t. We looked at all products separately,” says Van Aalderen.

“Price increases are not good”

Food and drink prices in the catering sector must rise, says the industry association Koninklijke Horeca Nederland (KHN). Companies see their profits evaporate and the margins to be able to invest or to reward themselves as an entrepreneur are under pressure.

“Price increases don’t always go along with the customer,” says Dirk Beljaarts, director of KHN. That’s why many entrepreneurs are hesitant about it. However, according to the director, it will have to be done: “We will have to move, just like supermarkets”.

Stay guests, with a even more expensive beer, the hospitality industry loyalty? “I still don’t see people running away from the supermarket,” Beljaarts says of the price increase there. Guests will keep coming, although they could be a little more careful with their wallets.

The demand decreases

Many consumers are already doing the latter, says Gerarda Westerhuis, retail and leisure sector economist at ABN Amro. The expectation is that the demand for “non-essential services”, such as the restaurant sector, will decline. “Last year there was a lot of recovery demand after the coronavirus, but this is disappearing due to the pressure on our purchasing power,” says Westerhuis. Consumers will eat less often, spend less per meal or look for an alternative to an expensive restaurant.

Of the horeca race under the high costs, the bank knows. According to Westerhuis, whether this even justifies the price increase depends on the type of company. For example, chains with a lot of fat on the bones may have more. But if the margins are “squeezed”.‘ it will be a different story.

“Exciting year”

The entrepreneurs themselves do not see the guest simply walking away. “We’ll probably have to settle for a little less, but we’ll make it through the year,” says Van Aalderen. He says he’s been in the hospitality industry for twenty-five years and margins are always an issue. “Eventually there will be peace again in society.”

Both Wind and Geraeds are on top of the numbers and are turning all the knobs to track earnings. From discount promotions to the realization of your evenings. If you want to stay financially healthy, you have to, says Wind. “It’s going to be an exciting financial year and I think everyone is feeling that.”

The fair also featured a number of clever innovations that could be used to keep costs down. You can see some of them in reporter Maarten Veeger’s report below.