Can Budapest’s tourism survive the economic crisis of coronavirus?
Due to the coronavirus, Hungarian tourism faces its most serious crisis ever, concerning, in particular, the capital, Budapest. What can be expected by the end of the crisis, and until then, what are the actions the participants of the service sector can take? – Dániel G. Német, the spokesman for the Night Embassy of Budapest, revealed the future perspectives to the Hungarian news portal Velvet.
By the introduction of emergency measures throughout the whole country, the Hungarian capital has become a ghost town. Today, only some trampled plastic beer glasses on the ground can remind us of the former vibrant nightlife of Budapest.
Before dealing with the consequences of coronavirus, let us summarise what trends could be expected before the disease outbreak. Until 2020, there was a continuously increasing tendency in the number of visitors and guest-nights, there was a steady growth in the amount of consumption, and a progressive improvement could be observed in the quality of services. Accordingly, statistics projected a record year in advance. Besides the city centre, nightlife began to emerge in the suburbs as well, for example in Kőbánya and Csepel. In the 7th district, a consensus-based silence regulation was planned to be introduced that would have been discussed by the representative body a few days ago. By the emergence of coronavirus, all these plans have come to nothing…
Read alsoCoronavirus – Hungarian tourism facing its most serious crisis ever!
Primarily, hospitality and accommodation services are concerned, due to their high variable costs and huge amount of human resources.
50-70% of the touristic companies have reserves for one month; no one expected that from one day to the next, the entire tourism industry would cease to exist. The dramatic situation concerns every tourism-related company, along with each and every contracted partner they have, including actors, musicians, program organisers etc.
According to the Government, hundreds of thousands will become unemployed due to the coronavirus economic shock.
According to Dániel G. Német, the Government’s rescue package includes appropriate and reasonable decisions, at international level as well. Still, there are other measures to be introduced in the future, for example, minimising the terrace and municipal rents that several tourist services need to pay to local governments. In this case, annual contracts are signed for the use of public land, so they have to pay for the terrace right now as well; even though, they will probably not be able to reopen soon. However, it should be added that the current crisis has been experienced twice as fast as in 1929.
What will happen to Budapest’s tourism after the restrictions?
According to the representative of the Night Embassy of Budapest, it is complicated to predict in advance; however, for sure, it will be different than it is now. Some restaurants have introduced home delivery service; however, it can not save all of them.
Supposedly, 30-40% of restaurants and bars will be able to recover, but obviously it depends on how long the epidemic will last. Less consuming guests can be expected, as well as the number of service providers and available programmes will significantly decrease as a result of the economic crisis.
In Berlin, for example, it was estimated that the local nightlife would experience such a significant loss, that a direct aid package of € 100 million will be needed to survive the next month.
After the crisis is over, what can be expected in Budapest – price increase or reduction?
According to Dániel G. Német, both of them will be experienced at the same time. Two different quality requirements will be satisfied – one of them is the former standard, while the other belongs to those who can no longer afford such services as before.
Proportionately, there will be less high-quality services and events.
However, all these factors are dependent upon the emergence of foreign tourists in Hungary, and the country’s international PR management – promoting the safety of Hungary when the virus is over. It is also questionable whether low-cost airlines will manage to survive. In case of bankruptcy, we will not be able to travel abroad as easily as before, and fewer visitors can be expected from abroad as well, or at least a much smaller segment can afford to travel.
Source: velvet.hu