German Hospitality Sector Shows Mixed Signals Amidst Economic Uncertainty
Preliminary data released Thursday by the Federal Statistical Office (Destatis) paints a complex picture of the German hospitality sector in October 2025, revealing a nuanced recovery marked by considerable volatility and raising questions about the sector’s long-term resilience. While October saw a real increase of 2.2% and a nominal increase of 2.1% compared to September, the figures are tempered by a significant drop of 0.9% in real turnover when compared to October 2024. This divergence underscores the uneven nature of the sector’s rebound from pandemic-era disruptions and suggests persistent headwinds.
The September data, revised downward from initial estimations, further illuminates the challenging environment. A previously reported slight dip transformed into a more substantial real turnover decline of 1.7% (previously -1.3%) relative to August, highlighting potential inaccuracies in the initial reporting and implying greater instability than initially presented. The nominal decline also registered a more significant correction.
The performance of hotels and accommodation services offered a somewhat brighter note, experiencing real growth of 6.3% and a nominal increase of 5.1% compared to September and registering a real uptick of 1.5% and a nominal rise of 4.9% year-on-year. This suggests pent-up demand and potentially the impact of continued international tourism, although the extent to which this offsets broader sector struggles remains to be seen.
However, the restaurant and catering segments presented a less encouraging narrative. While a modest real increase of 0.2% and a nominal rise of 0.7% were observed compared to September, a significant real turnover decline of 2.3% was booked against October 2024. The nominal increase of 1.0%, while positive, is comparatively smaller, potentially reflecting inflationary pressures impacting consumer spending habits and dampening overall demand.
Analysts suggest that the contrasting performance across sub-sectors and the divergence from pre-pandemic levels are indicative of shifting consumer behavior, rising operational costs including labor and energy and the lingering effects of geopolitical instability impacting both domestic and international travel. The continued reliance on government support measures throughout the pandemic, now phasing out, may also be artificially inflating certain metrics.
The data raises critical questions about the government’s long-term strategy for supporting the hospitality sector’s stability and fostering sustainable growth, particularly as inflationary concerns persist and the cost of living crisis continues to exert pressure on household budgets. Further investigations into the causes underpinning these disparate trends are crucial to informing targeted policy interventions and ensuring the sector’s vital contribution to the German economy is safeguarded.