Hungary Mostly woe for Hungarian hotels

In 2019 the industry generated 13 pct of national GDP and employed over 400,000 people across the country. A total of 23.47 mln guest nights were recorded in Hungarian hotels over 2019, while average growth y-o-y came in at 9.9 pct.

On March 16th, the government announced restrictions to try to halt the spread of the disease, and as a result hotel guest nights across the country fell by 66 pct, when compared to the same period in 2019. Officially these measures were lifted on June 18th, before the start of the summer holiday season. Guest nights with domestic guests fell by only 8.6 pct on 2019 in July and August but this was accompanied by a fall in foreign travel with international guest nights falling by 78.7 pct. According to preliminary estimates, the number of domestic guest nights in August outperformed 2019 record results by 120,000. Nevertheless, even this record-breaking increase did compensate for the unprecedented decline in international tourist arrivals on a national level.

On September 1st further travel restrictions were introduced. As a consequence, 28 pct of hotels in Budapest decided to shut down and a further 39 pct have postponed their openings, possibly until March 2021. Another 13 pct have decided on partially opening until the restrictions are lifted, meanwhile, 70 pct of countryside hotels are planning to continue operations uninterrupted. Overall 74 pct of Budapest hotels and 30 pct of countryside hotels are limiting their operations due to the restrictions introduced on September 1st.

In Budapest hotels expect a revenue loss of over 70 pct in 2020 compared to 2019, while less than half of the hotels in the countryside expect losses of between 20 pct to 40 pct, while some are even predicting growth. The majority of Budapest hoteliers expect having to wait until 2023-2024, to reach similar results to 2019 results, while in the countryside, many hotels expect to recover by 2021-2022.