Hospitality from recovery to crisis: bankruptcies peak in 2025

• ABN AMRO expects 450 restaurant bankruptcies in 2025, double the number in 2023

• Rising costs and intensifying competition are putting pressure on the sector

• Digitalisation, innovative concepts and collaboration are essential

Sector under pressure from rising costs and debt

The Dutch restaurant industry is on track for a record 450 bankruptcies in 2025. [CR1] According to Statistics Netherlands (CBS), 199 restaurants went bankrupt in 2023, and this number had risen to 260 by November 2024. This was revealed in an analysis by ABN AMRO and Hotelschool The Hague, which looks into the reasons and solutions for the financial challenges facing the sector. Although the industry seemed to recover well after the Covid pandemic, the bank found that problems are piling up again. Rising costs are a major concern within the sector. Inflation and higher energy, rent and wage costs are squeezing profit margins hard. Since 2022, producer prices (in Dutch) for food and beverages have risen by 17 and 20 percent respectively, while wages under collective labour agreements are up by 22 percent. These cost increases are not always offset by higher turnover, adding to the pressure on entrepreneurs.

Small businesses are struggling most

Smaller hospitality businesses in particular are feeling the financial pressure. As many as 17.8 percent of businesses with 5 to 50 employees are facing problem debt. In contrast, 93.2 percent of medium-sized companies (50 to 250 employees) report having their debts under control, compared with 92.2 percent of large companies (more than 250 employees). In 2024, the number of smaller businesses with high and problem debt increased by 11.5 percent. For medium-sized and large businesses, the increase was 2.6 percent and 1.0 percent respectively. There are also significant variations within the hospitality sector. Pancake restaurants are holding their own thanks to favourable locations and high productivity. The number of delivery restaurants grew by 51 percent between 2022 and 2023, but due to limited demand growth, it’s becoming increasingly difficult for new players to survive. Business owners in financial distress face not only practical challenges but also cultural stigma. In the Netherlands, bankruptcy is often perceived as a failure, whereas in the US, it is regarded as a learning opportunity. That said, there are solutions available here too. If they seek help in good time, entrepreneurs can restructure their business or wind down in a controlled way.

Innovation and collaboration are key to recovery

Despite the difficulties, there are opportunities for the sector too. Resilience, innovation and encouraging repeat visits are crucial to overcome this cost crisis. Digitalisation and new concepts offer possibilities for entrepreneurs. Stef Driessen, Leisure Sector Banker at ABN AMRO, says: “There are software tools for inventory management to reduce food waste and AI-driven technologies that make staff planning more efficient and could potentially cut wage costs. Additionally, entrepreneurs can respond to demand from younger generations like Millennials and Generation Z. These groups, who consume outside the home more than average, want affordable and convenient dining options. Innovative hospitality concepts, such as discount dining, provide opportunities to appeal to this group without compromising on quality. Business owners who take the right steps will be able not only to survive but also to help build a future-proof sector that meets the wishes of a new generation of consumers.”