Despite a nominal revenue increase of 1.4 percent in 2025, Germany's hospitality sector, including hotels and restaurants, experienced a real revenue decline of 2.1 percent due to rising prices, according to preliminary data from the Federal Statistical Office (Destatis). This downturn occurred even as tourism in Germany reached a record high, with accommodation businesses seeing a real revenue decrease of 2.0 percent. The gastronomy sector also struggled, facing a 2.2 percent real revenue drop for the year, with even December's festive season failing to yield real gains. A government initiative to lower VAT on food to 7 percent, effective January 2026, has not translated into lower prices for consumers, with restaurant visits becoming 3.6 percent more expensive year-on-year in January, as many businesses retain the tax savings to offset rising operational costs.