The third of Hungarian restaurants to go bankrupt?

30% of Hungarian restaurants will go bankrupt due to Covid, but the situation in the centre of Budapest is even worse.

For weeks now, we can read the news of how Hungarian hotels and accommodations are getting busier and busier for the summer, how people are eager to go on holidays and finally travel a bit. For the reopening, so many people are needed in the catering industry that chefs and kitchen workers at Lake Balaton ask for wages as high as HUF 1million.

Still, when we take a walk

in the centre of the capital, we can see many restaurants, bars and cafés that are currently out of business or permanently closed.

What will happen to the sector and all those people working in it? How many Hungarian guests are needed to save these businesses, and what will happen without foreign tourists?

In a typical, virus-free year,

tourism and the catering sector are two of the most significant sectors of the country’s economy. They represent 10% of its GDP.

In 2019, the third of those working in tourism were employed in catering businesses.
For years before Covid, there have been tensions in the industry as the wages were one of the lowest in the country. The pandemic further worsened the situation as these sectors were the most affected by the lack of tourists.

“Out of around 400 thousand people working in tourism and catering, about 150 thousand decided to leave their profession and find another way of earning a living”,

quotes hellovidek.hu the words of Tamás Flesch, president of the Hungarian Hotel and Restaurant Association. This mass change of career happened in the Autumn of 2020, after which it has all gotten even worse.

Even though in April, terraces reopened, and from July, we do not need an immunity certificate to enter a restaurant, the terrible conditions among restaurants are yet to be resolved. Due to not having worked for so long, owners have many extra costs to pay before opening.

In those regions where tourism and catering counted mostly with local Hungarian guests, businesses have some advantages and can reopen and recover faster. Lake Balaton and Lake Tisza both belong to these areas.
Budapest, on the other hand, which primarily relies on foreign tourists, will face more difficulties in the upcoming months. Despite the country being open and welcoming anyone with open arms, the capital still needs to wait some more for the flow of foreign tourists. According to the Hungarian Chamber of Commerce and Industry, it will be too late for many businesses. 

More than half of the catering businesses in the central districts of Budapest will probably go bankrupt. 

When it comes to complete recovery, the country needs international tourism. However, it will only happen gradually. It is due mainly to the various national measurements and restrictions in effect in different countries.
After the typical summer places with terraces have slowly woken up, Autumn will bring several events and business conferences. It is more or less the time for which more foreigners are expected to arrive and visit the country. However, it depends on the next few months and whether a fourth wave will hit Hungary.

• Can a fourth wave of Covid hit Hungary?
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Read alsoSurvival is the current goal, but what is the catering and hotel industry’s future?

Source: hellovidek.hu, MTI.hu