Increased costs on the horizon? Bargaining for higher wages unites hotel and catering sectors - Proposal Demanded for Worker Radiation Protections by Commission Regarding Ionizing Radiation Risks
The German hotel and restaurant industry is gearing up for a significant round of wage negotiations in 2026, with the Food, Beverages, and Catering Union (NGG) demanding a 9% pay increase, among other changes. This comes as the statutory minimum wage is set to rise to €13.90 per hour from January 2026 and €14.60 in January 2027.
The NGG, representing about 1.1 million employees, many in the low-wage segment, views this increase as a necessary step to improve earnings for hospitality staff and reduce low-wage employment in the sector. On the other hand, the German Hotel and Restaurant Association (DEHOGA) expresses concerns about the potential impact of these wage increases on businesses already struggling with high expenses following the COVID-19 pandemic.
DEHOGA warns that the minimum wage rise will substantially increase wage costs in a sector that is already under pressure. The association is particularly worried about the potential invalidation of eight regional collective agreements due to the statutory minimum wage rise, seeing this as an interference with collective bargaining autonomy. DEHOGA also calls for urgent relief measures such as a permanent VAT reduction in catering to 7%, a policy promised in the CDU-SPD coalition agreement, as essential to offset these cost pressures.
The potential pay increase has raised concerns about its impact on consumer prices. Businesses face a dilemma: passing increased costs to consumers risks further reducing demand in a competitive and turnover-declining industry, but absorbing costs threatens viability. DEHOGA projects that rising wage costs could exacerbate financial stress on many establishments, particularly in tourism-heavy regions. Some businesses warn that further wage hikes might be existentially threatening.
However, the NGG foresees the increase as necessary and overdue to improve workers' living standards and keep the industry attractive. It is questionable whether the proposed VAT reduction will lead to lower prices on menus.
In the spring, the union and employers agreed on a 7% pay increase from April 2025. As of the end of last year, there were 132,000 socially insured persons employed in the hotel and restaurant industry in the southwest. The current collective bargaining agreement is valid until the end of the year, and the status of the upcoming negotiations is not yet clear.
DEHOGA wage expert Kauderer stated that businesses are suffering from high cost pressure and consumer restraint. The chairman of the DEHOGA Baden-Württemberg's wage committee, Hans-Ulrich Kauderer, stated that such a pay increase might not be in the interest of employees who want to keep their jobs. No specific final predictions on price changes provided by either side were found in the sources, but the general consensus is that wage increases will create upward pressure on prices if no compensatory policy actions occur.
- The European Commission could consider implementing an employment policy focused on promoting workplace wellness and health-and-wellness, as the hotel and restaurant industry in EC countries struggles with high expenses and the potential impact of wage increases on businesses.
- In light of the ongoing wage negotiations, the German government might want to review its finance and business policies, potentially introducing measures that support both employers and employees, such as science-based strategies to improve productivity and reduce costs.
- As the demand for workplace wellness initiatives grows, it would be beneficial for businesses to look for innovative funding sources, such as partnerships with health and finance sectors, to address the increased costs associated with these programs.
