Government rewrites rules in the hotel sector in Hungary

The government’s newest initiative’s cause was the scandal concerning Booking.com during the summer, during which Hungarian accommodation providers did not receive their money for weeks. As a result, some of them struggled with a possible bankruptcy.

According to turizmus.com, Fidesz, Hungary’s ruling party, which governs with the Christian Democrats with a supermajority, submitted a new bill to the Hungarian parliament rewriting the rules of the accommodation services provider sector. Furthermore, the Hungarian Competition Authority would introduce some stricter regulations concerning the sector.

The new bill follows the remarks of the Budapest Chamber of Commerce and the authorities.

Booking is the market-leader accommodation service provider app and website in Hungary. However, this summer, they did not transfer accommodation fees to the hotel and accommodation owners for months. Therefore, some owners struggled with financial crisis, and many faced a possible bankruptcy. We wrote about that issue in THIS article. Fidesz then promised to change the relevant rules to avoid such scandals in the future. A Fidesz MP said they would never allow multinational companies to bring Hungarian companies or tourists into such a difficult situation.

According to the new bill of the governing party, accommodation service providers would have 45 days to transfer money to the hotels or other service providers. Moreover, service providers will not be able to pass on all currency exchange rate risks to the service providers. Instead, they will have to bear the costs 50-50.

Several other changes come in the hotel sector

Furthermore, accommodation service providers active in at least three counties in Hungary will have to create a personal and Hungarian language customer support service. Such companies will have to give a substantive response to complaints in 30 days.

There will be some more, interesting changes. For example, the bill would forbid unfair contract terms against accommodation providers. For example, they will have the right to turn to Hungarian courts if they have a legal debate e.g. with Booking.com. Moreover, the accommodation service providers will not be able to prescribe unilateral payment obligations, if the bill passes. Furthermore, hotels and other accommodation providers will be responsible for guest comments and opinions shared and displayed by them.

The Hungarian Competition Authority (GVH) conducted an investigation concerning the sector. Their report appeared yesterday. GVH said they aimed to protect the interests of the customers and hotels. Therefore, they would support tightening the relevant rules in the sector, forbid price parity clauses for accommodation service providers and suggest platforms to make ranking criteria of search results for the customers more transparent.

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