Ukraine’s HoReCa (hotel, restaurant, and cafe) sector is facing significant challenges due to the ongoing war, high staff turnover, and declining consumer purchasing power. Insights from industry analysts indicate that while the sector is undergoing transformation, it is also bracing for potential closures.
During the first half of 2025, overall revenue at Ukrainian dining establishments increased by 5%. However, this growth was driven entirely by rising menu prices rather than an increase in customer numbers, as total foot traffic actually dropped by 9%. Bars and cafes experienced the most severe downturns, whereas sushi establishments managed to maintain steady foot traffic. The largest increases in average check sizes were observed in bars (up 19%) and restaurants (up 17%). Geographically, Lviv led in revenue growth at 7%, followed by Odesa and Kharkiv at 6%, while Kyiv recorded only a 1% increase.
The industry is also grappling with a severe labor shortage, with the pool of available workers roughly halving since the start of the full-scale invasion. While permission for men aged 18 to 22 to leave the country did not trigger a critical crisis, smaller establishments like coffee shops and fast-food outlets have seen staff turnover reach up to 20%, particularly in western regions. High-end restaurants have been largely insulated from these staffing pressures. Additionally, many male workers are migrating toward sectors that offer official reservation protections from mobilization, such as logistics, warehousing, and retail. Meanwhile, skilled Ukrainian hospitality professionals finding employment in Europe and the U.S. are unlikely to return.
To adapt to these operational hurdles, restaurants are streamlining their processes. Measures include shortening menus, substituting complex dishes with semi-prepared items, closing kitchens earlier (such as by 9:00 or 10:00 p.m. in Kyiv), raising wages, creating positive work environments, and hiring inexperienced interns. Businesses are also investing heavily in generators to ensure energy efficiency, relying increasingly on digital marketing platforms like TikTok and Instagram to attract diners, and shifting toward local ingredients to counter rising import costs.
Looking ahead, industry experts project that declining purchasing power could force up to 20% of establishments to close by the end of 2025, with that figure potentially climbing to 50% if the economic crisis deepens. Nevertheless, analysts believe the market is poised for a rapid recovery, anticipating that active growth will resume within weeks of the cessation of hostilities, accompanied by the return of venues such as nightclubs and men’s establishments.
