Hospitality industry hit by payroll costs

There has been a 6% rise in company liquidations so far this year, according to business and credit reference agency UC. The hotel and restaurant industry has been particularly badly hit, and in July the sector saw a 19% increase in liquidations in relation to July 2016.

Eva Östling, CEO of Visita, the employer organisation representing enterprises in the Swedish hospitality sector, is not surprised. On 1 July 2016 the government scrapped the subsidy on payroll charges in the sector, raising the rate to 31.42%. Östling believes the industry is now feeling the full impact of the three-fold increase in the charge.

Östling points out that the industry should be enjoying a boom given the summer months and the strong economy, and expresses concern over the impact a recession will have on the sector, when people spend less on eating and drinking out.