HoReCa market to rebound in 2021 even under “fourth wave” scenario
The HoReCa market, defined as the hotel catering (Ho), restaurant catering (Re) and catering (Ca) markets, was worth PLN 25.9bn (€5.1bn) in 2020, registering a decline of 30.9%. This was the first decline in the value of this market in more than a dozen years. The market was negatively impacted by the COVID-19 pandemic and the resulting tightening of the operations of catering, hospitality and food service businesses, lower social mobility and a downfall in tourism.
Find comprehensive information about the current state of the Polish HoReCa market in the PMR report:
Value and change of the food service market
As the struggle with the COVID-19 pandemic continues into 2021, and restrictions on catering, hotel and event operations have been extended for much of the first half of the year, it is impossible for the industry to recover. Despite this, the value of the market will grow at a double-digit rate this year, however from a very low base in 2020. Although the opening of catering establishments is welcomed with enthusiasm by respondents (31% plan to eat out more often than before the pandemic), the real recovery of the HoReCa market, according to PMR forecasts, will take place only in the first full year of relative ‘normality’. It will begin in 2022, while the value of the market will approach the pre-pandemic level only a year later.
How will the frequency of eating out change?
A lot of macroeconomic data (e.g. salaries, industrial production) or stock market indicators point to the decreasing influence of the previous, successive waves of the disease on the economy (a kind of adaptation effect to the successive waves). Nevertheless, the occurrence of the fourth wave of the disease in autumn will most likely mean that the catering industry will again operate only in delivery mode, and the hotel industry with significant limitations.
As a result – as evidenced by econometric modelling, which takes into account the negative impact of the above factors – it can be concluded that the impact of the possible next, increased wave of infections in autumn would be rather severe. The final result of the entire HoReCa market generated in 2021 would be lower by as much as nearly PLN 1bn (with dynamics of about 9.9% year on year) than in the baseline scenario, while the worse situation of the economy in general and the catering industry in particular, in subsequent years would result in a loss of PLN 2.6bn by 2026 compared to the baseline scenario.
On an average annual basis, under the fourth wave scenario, the market would grow 1.3 p.p. lower (CAGR) than in the baseline scenario. The most affected segments, similar to 2020, would be hotel catering which is most heavily dependent on tourism variables (average growth of about 22% in the baseline scenario, about 17% in the pessimistic scenario).
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Senior Retail Analyst