Page 6 - bneMag February 2021_20210202

6 I Companies & Markets bne February 2021
The consolidation of the three banks is part of a wider
plan backed by government and Orban to boost the share of Hungarian ownership over 50% in strategic sectors
such as media, retail, energy and banking. Counting OTP as a Hungarian-owned lender, this has already materialised as the state has acquired Budapest Bank and businessmen close to the prime minister bought stakes in MKB Bank.
Market players are of the view that it will be an extremely difficult task to merge banks with such different organisational
Foreign investors eye bargains on distressed Budapest hotel market, but owners won't budge
Tamas Szilagyi in Budapest
Foreign investors are lining up to take advantage of the collapse of tourism in Budapest in the hope of snatching bargain deals on the hotel market, local media wrote on December 14. But so far transactions are hard to come by as owners are not ready to make concessions.
Troubled hotel operators in Budapest are besieged by investors from Europe, China and Arab countries, according to a report by Privatbankar website, citing industry associations and consultants.
There is no pressure on owners to sell their stakes with the state-mandated loan moratorium still in place, said Tamas Flesch, head of the Association of Hungarian Hotels and Restaurants. Flesch is also the co-owner of the Continental Group, a hotel management company, that has sealed two transactions a year ago just before the crisis hit.
Customers are looking for buying opportunities, with
a possible 20-40% price discount, but owners are unwilling to lower prices despite the crisis, said consultant Peter Kraft. Investors are now moving to other European capitals to strike deals, he added.
Hotel development projects continued during the pandemic as there is confidence that life will get back to normal and that tourists will return to Budapest.
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cultures and infrastructure at a time when rivals are investing heavily in digital transition.
On the other hand, the banks’ customer bases complement each other well. MTB has a strong presence in smaller rural areas with a solid SME base and retail clientele
in agriculture, which fits well with MKB's and Budapest Bank's affluent urban clientele. The latter two also
have steady positions in SME lending, private banking and leasing.
The prestigious Gellert hotel in Budapest was acquired by US-Hungarian investment management and property developer Indotek for €80mn in mid-2019.
In the first ten months of 2020 the number of guest nights at commercial accommodations dropped 53.1% y/y to 12.8mn. Overnight stays by foreign guests in the same period fell 74% to 3.57mn.
Hungary's tourism sector closed a record year in 2019 as the number of guests at commercial accommodations reached 12.8mn and that of overnight stays exceeded 31.3mn, a two- fold increase from 2010. Foreigners accounted for half of guest nights at hotels with at least three stars. The data does not include stays booked through short-term rental services
such as Airbnb.
Budapest hotels, which depend heavily on foreign guests were hit by the crisis harder than their peers in the countryside.
After the government lifted lockdown measures in June, domestic tourists flocked to popular destinations in the
“Troubled hotel operators in Budapest are besieged by investors from Europe, China and Arab countries”