Growth in tourism in Hungary tops leading regional competitors, Austria and the Czech Republic
Hungary welcomes more than 35 million tourists annually – 21 million from abroad – and the number is growing rapidly. The year 2016 was another record breaker with foreign tourists adding an estimated eight percent of revenue to the federal budget. The summer’s international sporting events, FINA and Formula 1, 2017 are expected to boost the numbers even higher.
Last year broke another record for tourism: 21.4 million international tourists visited Hungary, 6.2 percent more than in 2015. According to the head of the Hungarian Tourism Agency, Dr. Zoltán Guller, the total revenue from commercial accommodations rose 9.1 percent in 2016, with revenue from room fees climbing 11.1 percent. The number of guest nights rose by 6.7 percent in 2016, and a significantly greater number of tourists arrived from Asia and other countries in the region (Slovakia, Czech Republic, Poland, and Romania) and more from the UK, Austria, and the US.
The Orbán Government sees tourism as a strategic priority for development, and recently, according to Dr. Guller, part of a new promotional campaign. The efforts are bearing fruit. According to the latest UNWTO report, international tourist arrivals in 2016 rose 3.9 percent around the world, 2.1 percent in Europe, and an astonishing 6.6 percent in Hungary – three times higher than the European figure and double the world average. The Hungarian industry’s growth rate exceeded that of the largest tourism competitors in the region, Austria and the Czech Republic.
We have every reason to expect big things again this year. Budapest hotels were nearly fully booked for both the FINA World Championships and Formula 1, and the same is expected in Győr for the European Youth Olympic Festival taking place at the end of August. In the first quarter of the year alone, the number of international guests in commercial accommodations rose by 11 percent and the number of international guest nights grew by 10.3 percent, compared to the January-March 2016 figure.
These numbers sound great, but how does it impact the economy? Revenue from tourism boosts GDP, of course, and currently makes up about 10 to 10.5 percent of output (expected to grow to 16 percent by the end of 2019), and raises employment rates, out of which tourism makes up roughly 12.0 percent. Foreign tourists spent 4.6 percent more in 2016 than in 2015, and their spending was up by 102 percent compared to 2007’s numbers. In the first quarter of 2017, the housing revenue of commercial accommodations grew by 11.5 compared to the same period of last year, while the total income was ten percent higher than in January-March of 2016. Fifty percent of Hungarians now say they have plans to travel, compared to 36 percent just a couple of years ago, so there seems to be plenty of room to grow.
Targeting three outstanding touristic regions – Balaton, Sopron-Fertő, and Tokaj-Felső-Tisza-Nyírség – the government will allocate 117 billion HUF (382.8 million EUR) for developmental projects over the next three years, according to Dr. Guller. In the meantime, the area surrounding Lake Balaton, the largest freshwater lake in Central Europe, has received some 360 billion HUF (1.18 billion EUR) from the EU and domestic development aid. The new sources will allow for improved infrastructure, including bicycling, boating, and public transportation. Further improvements will include higher quality water and 55 newly renovated beaches. The Hungarian Tourism Agency will continue to take local interests into account, said Guller, keen to avoid the mistakes of tourist destinations like Venice and Barcelona. Protecting the environment also remains a priority, thus the plan to replace the limited number of pleasure boats on Lake Balaton with electric vessels.
The Hungarian tourism industry is rolling full steam ahead. The government’s goal is to make Hungary one of the top five tourist destinations in Europe within the next two years, which, with these impressive growth rates, is not at all beyond reach.