Polish HoReCa sector reduces debt, but challenges remain

The Polish HoReCa sector is showing signs of recovery, with overdue debt falling to nearly 1.88 billion PLN by the end of May, largely driven by a significant reduction in liabilities by hotels. These establishments decreased their overdue debt by 19.9%, or over 170 million PLN, bringing their total to 689 million PLN. Catering companies also contributed to the positive trend, lowering their overdue obligations by 6.8%, though their total debt remains above 69 million PLN.

“

Though the direction of change is positive, the scale of arrears remains high and reaches almost 1.88 billion PLN.

However, the situation is not uniform across the sector. Restaurants and other gastronomic businesses saw their overdue liabilities increase by 2.8%, reaching almost 902 million PLN. This divergence highlights the varied financial health within the industry as it heads into the crucial summer season.

“

The financial breath of the industry came at the perfect time this year – before the start of the summer season, which for many entrepreneurs is the key source of annual revenue.

While the summer period promises increased occupancy, it also presents significant challenges. Businesses are grappling with rapidly rising operational and employment costs. Furthermore, consumer spending may be curtailed, as a recent survey indicates 35% of Poles plan to adjust their holiday plans due to rising fuel prices, potentially opting for closer destinations or shorter stays. This could translate to lower revenues for the tourism and HoReCa industries.

“

However, this does not mean the end of challenges. The service industry will continue to have to contend with factors such as rising operating costs, labor shortages, or maintaining profitability outside the peak season.

To navigate these pressures, nearly 30% of businesses plan to raise prices, a move often necessitated by the need to cover escalating costs rather than maximize profits. The upcoming autumn will be a true test of the sector's profitability, as businesses must build financial reserves during the summer to withstand the post-season economic pressures.

“

As many as 35% of respondents plan to revise their holiday plans this year.