According to Károly Gerendai, a successful entrepreneur of the industry, almost half of Hungarian restaurants could shut their businesses for good due to the pandemic. Other estimates talk about even higher and scarier numbers.
The Hungarian hospitality industry suffers dearly from the restrictions. All sectors have been in a very difficult situation, practically ever since the first wave of the coronavirus, but this particular sector and all those people working in it might suffer more in the long run. (By saying this, I do not give less importance to other sectors barely surviving, simply, this article talks about restaurants.)
Károly Gerendai, a restaurant owner, the creator of Sziget Festival, and the owner of Budapest Park and Akvárium Klub, among other companies, has quite a clear picture of the current situation in the sector, thanks to his far-reaching involvement. He thinks it is important to note that
this year will be the second season when all outside venues of entertainment can either not function at all or will be open under several and strong restrictions.
Many restaurants forced to close try to survive by widening their portfolio a bit and adapting to the situation, thus, most of them started home delivery. According to Gerendai,
40% of restaurants could close down for good and will not be able to revive after the end of the pandemic.
Even Fine Dining restaurants decided to do delivery; Gerendai and his restaurants, for example, offer the experience of going to your doorstep and cooking their menu in your kitchen, he said to atv.
The unpredictability and the uncertainty of the situation cause physical tension as well, on top of the financial difficulties. Whether we talk about a smaller family business or a bigger company,
the livelihood of complete families with kids is at stake.
According to last March’s data issued by KSH, the Hungarian Central Statistical Office, 52 thousand businesses were registered in the hospitality industry, be it restaurants, cafés, bigger bars of the capital, or small buffets at Lake Balaton. A lot of these businesses are smaller, family-owned restaurants or buffets, or the passion of a group of friends to provide a specific type of service. Their livelihood is strictly based on their personal, manual work and on their own savings.
They do not have a big corporate background to help out and stall the dismissal of employees.
They can try to decrease their working hours and their salaries, but after a certain point, they have to send everyone away.
Almost 75% of workers of this particular industry are employed by a small and medium-sized business which lacks the sufficient financial reserve to maintain employees for such a long time.
As many of these places have been closed for months now, apart from not being able to generate revenue at all, or only on a very small level, they are further burdened by the necessity of paying rent for their closed and empty establishments. Even though the government and the municipality help in this respect by abolishing rent fees for these businesses until the end of this year, it means very little. Almost 90% of businesses rent their store or restaurant space from a private entrepreneur, a private company, a mall, or a private individual.
Subsidies allocated by the government or the municipality can help, but for a very limited time. The most important thing is the return of customers to cafés, restaurants, and bars. Especially in this situation, when it has been a whole year since the appearance of the virus and the first restrictions in Hungary, and almost an entire year since the whole hospitality sector of the country was on the verge of total bankruptcy. However, guests may be able to visit such establishments very soon, as
According to the estimate of hellovidek.hu published in January, an even bigger proportion,
up to half of all places in the hospitality industry, could very soon close their businesses forever.