Unbearable situation: huge tension among Hungarian caterers

It is no longer the retention of employees but the retention of companies that is at stake in the capital’s hospitality industry, and even nationally. According to their professional representation, it would be necessary to expand the subsidies and extend their disbursement.

According to vg.hu, Budapest’s catering industry has become a disaster area. Domestic tourism, which was booming in the summer, did not bring enough revenue for the businesses operating in Budapest and its surroundings, rather, it lured local guests to Lake Balaton, said László Kovács, President of the Hungarian Catering Industry Association (MVI).

Businesses are frustrated and increasingly tense, job retention subsidies are no longer enough, and business retention is at stake now.

For this, the owners of companies that have used up their savings by now are waiting for help from the capital, local governments, and the government.

One-fifth of the 50,000 domestic restaurants operate in Budapest, where thousands, mostly micro and small enterprises, have found themselves in a tragic situation due to the restrictions.

Unlike the hotel industry, which is mostly run by large companies, the backbone of hospitality is made up of family businesses, which typically run one restaurant each, said the president of the association.

“The real situation cannot even be really assessed. Rural restaurants that do not operate in the popular holiday resorts are also at risk, as even the summer crowds avoided them,” said László Kovács, who revealed that full wage subsidies, tax and contribution waivers, as well as solidarity taxes and at least one-time survival subsidies were needed in order to maintain the sector’s chances of restarting.

Following the example of Vienna, Budapest could rush to the aid of the hospitality sector, the president of MVI emphasised, but their silence is frustrating: neither the capital nor the districts offered any help. The businesses that are run fairly, which have operated abiding by the law and profitably both as employers and taxpayers, could now be assisted justly at the most important moment, according to the professional body. The consensus of the industry is that subsidies and incentives need to be expanded, and new ones need to be introduced and extended for at least three months after the reopening.

“It is only later that it will become clear how many businesses have survived. Nationwide, the dropout rate could be around 30 per cent, although it is difficult to forecast anything at the moment,”

added Balázs Csapody, a restaurant owner at Lake Balaton and the president of the Pannonian Academy of Gastronomy. For companies starting with an empty cash register, in debt, the initial euphoria may not be enough to reach the first milestone, the third month after the reopening. In addition, we cannot know what the financial situation of the potential guests will be, whether fewer people will go to restaurants and spend their money there.

“Individual caterers are sticking with their staff literally till the end; it is more common for financial investors to let their employees go and get out of business if it does not perform at the expected level,”

says Balázs Csapody. The summer was good in the countryside, but the situation also turned dire there months ago. Only people living in cities, mostly in Budapest, like to buy food to take away. Roughly a third of restaurants can do home delivery, but only 20 per cent of those who try it get significant traffic from it, which is not much overall.

As restaurants open more and more offering eat-in options, the relevant legislation has been tightened. At first, the punishment for such violators is that they have to close for six months, but in the case of recidivists, it is a year, and the fine ranges from one hundred thousand forints to one million forints. 

From now on, the operator of a restaurant that opens a second time despite the ban must pay at least one million forints, and the upper limit is five million forints. On Sunday, there was a demonstration for change in Budapest.

Source: vg.hu