Paris: Around 25 restaurants are closing every day in France as the hospitality sector struggles with high operating costs and low profitability, a leading industry representative said Thursday. Thierry Marx, head of the Union of Hotel Trades and Industries, highlighted the financial challenges facing the sector, which employs approximately 1.6 million people.

According to Anadolu Agency, Marx emphasized that employer contributions are significantly impacting jobs and wages within the hotel and restaurant sector. The Michelin-starred chef pointed out that insolvency proceedings, including restructuring, liquidation, and safeguard procedures, have increased by 6.4% in the second quarter. The sector's average profitability stands at only 2%-3%, which limits businesses' abilities to invest.

Marx provided a stark example of the financial burden, noting that when an employee earns £3,000 gross, it costs the employer £6,000, while the employee receives just over £2,000. He also voiced strong opposition to proposed increases in value-added tax (VAT) intended to finance France's social welfare system, stressing the importance of maintaining the current VAT rates of 10% for sit-down restaurants and 5.5% for fast-food outlets.

Additionally, Marx warned of a trend towards 'degastronomy' in France, as the fast-food market has overtaken the sit-down restaurant sector over the past two years. He expressed concern that independent, chef-led establishments are being replaced by chains. Furthermore, restaurant activity in the Gironde and Landes regions has fallen by 40% due to major wildfires. Marx called for support to help affected businesses recover before the next summer season.