The profitability of italian restaurants, before and during the pandemic

Restaurant businesses play a priority role in the economy of a tourist country. Italy, traditionally the destination of many foreign guests, is also renowned for its excellent cuisine, based on the Mediterranean diet. This paper analyzes the trend of two profitability indices of a sample of large Italian restaurants, related to the pre-pandemic period and in the Covid 19 year, 2020. For this purpose, financial statements from the AIDA database were used. Profitability was studied using ROE (return on equity) and ROS (return on sales). The study relates to the entire country and its three macro-regions (North, Center, South, and Islands). The analysis showed a dramatic fall in the year of Covid 19, despite government interventions to support the business that has been subject to forced closures. The main limitation of this study is its purely quantitative nature, limited to a sample of restaurants with annual revenues over €800,000. The results are useful to Italian and foreign entrepreneurs who can relate their situation to the average situation in the sector. In the future, the study must also consider other profitability and asset indices, as well as investigate investments in sustainability, considering the role of restaurants, which must contribute to the development of fair, ethical, and sustainable tourism.