Page 59 - CE Outlook Regions 2022

statistics office KSH. Construction producer prices climbed 10%
y/y in Q1-Q3 2021.

3.3.6 Major Sectors

The pandemic hit Hungary’s booming tourism sector hard, to the
same extent as its V4 peers, Poland or the Czech Republic. The
sector, generating 10% of the GDP, was on track for yet another
record year in 2020. The number of overnight stays at Hungarian
hotels exceeded 31.3mn in 2019, a two-fold increase from 2010.

During the pandemic, the number of guest nights by domestic
travellers fell 39% to 9.6mn and the number spent by foreigners
dropped 77% to 3.7mn Revenue of commercial accommodations
declined 59% to HUF228bn in 2020.

The pandemic has highlighted the rift between Budapest and the
countryside. Domestic tourism has recovered from the crisis, but
it will take years before international travel returns to pre-crisis
levels in Budapest.

Summer bookings in 2020 and 2021 in popular holiday spots
peaked, while Budapest hotels struggled as 90% of their guests
come from abroad.

The lifting of pandemic restrictions at the end of May helped the
sector generate a near record-breaking year in some parts of the
country.

In the first 10 months, hotels recorded 13mn guest nights, down
3.1%. Total gross revenue increased by 4.2% to HUF234bn.

The number of holiday bookings in hotels stands at 50-60%, well
below the 80-90% expected, as guests and companies are
withdrawing reservations due to the deadly fourth wave. Hotel
operators are hoping for a last-minute pick-up in bookings.
Companies are forced to raise prices to cover the multifold
increase in gas and electricity prices, higher labour costs and
food prices coupled with the weaker forint, just as the sector is in
a recovery phase. Budapest hotels are in the midst of a strategy
shift to attract more domestic guests.

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