Number of restaurants dwindling, remaining doing well

Many entrepreneurs are attracted to the idea of opening a restaurant in Budapest, but many soon end up closing their doors, according to company data service Opten. Whereas the number of establishments has continually fallen in the past three years, remaining businesses are doing well, however.

Opten said in a report on Wednesday that the number of employees is constantly expanding in the hospitality market in the capital, though businesses are now struggling to find quality labour. Around 40,000 people are working in Budapest’s restaurants and similar entities this year, as opposed to 38,500 last year and 36,755 in 2015. The number of businesses operating in the sector, however, fell by more than five hundred, to 7,008 last year. At the same time, their operating revenues have been increasing.

Opten said that labour shortages that are causing acute problems in many other areas are not exactly reflected in the employee statistics of Budapest restaurants.

In this area, Budapest enjoys a better labour market position compared to the countryside and offers slightly better wages, even if the average wage in the sector is lower than the general average wage.

Fully 44 percent of domestic catering companies are located in Budapest, so the performance of these businesses has a big influence on domestic hospitality results as a whole. Based on real earnings growth, VAT cuts and positive tourism indicators, further growth in demand in the sector is expected, Opten said.

Source: MTI