Hospitality labor costs are rising rapidly: 38.5% increase by 2023

Hospitality labor costs are rising rapidly: 38.5% increase by 2023

Labor costs in the hospitality industry have seen a significant increase in recent years. According to an analysis by the Federal Statistical Office, as reported by the DEHOGA Federal Association, the costs for an hour worked rose from 18.70 to 25.90 euros between 2019 and 2023, which corresponds to an increase of an impressive 38.5 percent. In comparison, labor costs in other industries rose by an average of almost 15 percent over the same period.

Labor costs consist of gross earnings and additional wage costs. In 2023, companies in the manufacturing and service sectors in Germany paid an average of 41.30 euros for an hour of work. This represents a significant increase compared to previous years.

In relation to the European Union (EU-27), labor costs in Germany were the sixth highest. Compared to Luxembourg, which had the highest labor costs per hour at 53.90 euros, and Bulgaria, which had the lowest at 9.30 euros, German employers paid around 30 percent more in 2023 than the EU average of 31.80 euros. Compared to other countries in the EU, the relative distance from the average remained unchanged.

This data shows a significant increase in labor costs in the hospitality industry, which could pose financial challenges for companies. It will be important to closely monitor the impact of this cost increase and make adjustments as necessary to maintain profitability and competitiveness. A closer look at the reasons behind this increase and potential solutions could be crucial for hospitality companies.