The corona pandemic poses a great challenge to the world and it is severely affecting the economy of many countries. Germany has forecast a GDP decline of -6.5% in 2020 as an effect of the corona virus on the economy.
Since the outbreak of the coronavirus, Germany reported new cases of infected people every day. In order to stop the spread of new infections, starting from March 2020, the German Government has taken measures to combat the coronavirus.
In addition, governments issued a worldwide travel warning and discouraged non-essential domestic and/or international travel. Numerous catering and tourist facilities had to temporarily close, severely damaging the hospitality industry.
Already in March 2020, when a large part of the hotels and restaurants were still open, almost three quarters of the hospitality companies recorded a drop in their turnover. The losses in tourism revenue in March and April 2020 were equal to €24 billion. Numerous companies in the hospitality industry have applied for emergency funding. Despite this, a quarter of the tourism companies from Lower Saxony stated in a survey that they were expecting a complete economic collapse due to the Corona crisis. To avoid this to happen, companies are postponing planned investments and are seeking for liquidity assistance.
On the other hand, a survey related to German leisure facilities carried out in April 2020 showed that a rapid increase in demand can be expected once the travel restrictions are lifted. In particular, day-trip tourism, the leisure activities, and gastronomy tourism have the potential to regenerate quickly. This trend is also reflected in the Germans’ willingness to book. For instance, in May 2020, around 70% of holiday accommodations on the North and Baltic Seas was already fully booked for July 2020.
In fact, following the relaxation of COVID-19 protection measures, the German hospitality industry recorded significantly higher sales in May, if compared to the previous month. According to the Federal Statistical Office, the revenues of hotels, restaurants, bars and catering providers increased by 45.2% compared to April.
However, we are still far away from the pre-crisis economic results. If compared to May 2019, sales registered a decrease of 63.4%. Even compared to last February, the month before the outbreak of the coronavirus in Germany, sales fell by 64.8%.
Hotels recorded a price decrease of 80% compared to May 2019. As for restaurants, their sales fell by 54.6%. Within the gastronomy sector, revenues of caterers were 54.1% lower than the figure for the same month of the previous year.
According to the statisticians, “this situation was caused by the closures of restaurants – with the exception of pick-up and delivery services – and by the bans on tourists’ overnight stays in hotels and other leisure facilities which lasted for March and April.”
Between May 9 and 18, these regulations have been gradually relaxed in all Federal States.