Hungarian hotels in trouble: many forced to close down
Hungarian hotels are in great trouble as inflation continues to rise. The unaffordable utility prices may force many of them to close. It is impossible to channel all the added costs to the guests — says the Association of Hungarian Hotels and Restaurants (Magyar Szállodák és Éttermek Szövetsége).
Untenable situation
To the inquiry of HVG, the MSZÉSZ stated that many hotels will close temporarily. The new bills have just started arriving and some hotels already struggle with the increased utility prices. Temporary closures can be expected from October or January up until April-May.
Even now, most facilities have resorted to dynamic pricing, meaning that prices can change daily. As the time between the reservation and the arrival date has shortened to about 3-7 days in the case of individuals or smaller companies, it manly pose an issue in the cases of larger conferences or group reservations. Due to this, the contracts usually contain a clause that allows hotels to revise prices above given inflation rates.
The main problem is that the approximate cost of bills in the winter is still unknown. Therefore many opt out of the winter season altogether, only reopening in spring, when expenses should be lower due to the reduced energy and heating costs. The problem is further complicated by inflation as wage increases were necessary. The rising costs combined with the new wages are just too hard to handle for many.
Solutions
A hotel in Somogy has already shut its doors saying:
“In order to be open next year, we have to close down for now.”
The solutions differ in the case of each hospitality establishment, but the Somogy hotel at least informed the employees well in advance. Most of them had the chance to look for other jobs and the hotel’s management even helped to find them a temporary solution. Some employees will be transferred to an Austrian hotel for the ski season and after that, they would be to return the upcoming period.
According to the management, in the heating season, the natural gas alone would cost about 6 million HUF (15,000 EUR). It is also uncertain how the prices will fluctuate in the near future. They aim to bring out the maximum of the situation by keeping the café and the office open preparing for a hopefully better next year.
Read alsoBad news has come: quarter of Hungarian businesses plan lay-offs
Source: HVG.hu
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1 Comment
This will be another Fact of Life.
Budapest, Hungary – post February 2020 – in the “rabble” and “disasters” – the fall-out – that has occurred and continues to occur, in the tourism sector of Hungary, which prior to February 2020, the Gross Domestic Products from Tourism was 9.6 % – a massive component to the bottom line of the Hungarian Government, not forgetting VAT at 27% – the HIGHEST in Europe – hotel accommodation was in an OVER supply position.
That was in HEALTHY times.
Ironically – post February 2020 – closures we Know – by the dozens in hotels and “other” places of accommodation.
We know the “Carnage” in the restaurant scene and throughout the ENTIRE Hospitality Sector. – that has in all areas mentioned in this commentary, saw literally thousands of Hungarians losing their jobs and in WORSE – their investments & Livelihood’s – life savings.
We then witness a Government – adding taking larger TAXES – from business operators – in near past months.
What in ALL these examples ASTOUNDS me – is we HAVE continued to BUILD on – in these CATACYLSMIC times.
New Hotels – new houses and apartments – new restaurants or renovated buildings to restaurants.
Hungary’s economy – tourism and winter nears -“fall-off” foreign investment, in the property sector, de-valuation of the forint, continual up-ward trend of Interest Rates – no European Funding – these are FEW not ALL – of the MAJOR obstacles, that are and will confront Hungary in the immediate Future and going forward.
China – “ravaged” growing through the presence of this Novel Virus, that there economy – is “sizeable” re-tracted.
Russia – its War on the Ukraine – the on-going MASSIVE rightful economic effects – the “growing” questions being raised inside Russia of its Leader – ugly.
Hungary – the direction and on-going RELATIONSHIP direction, by the Fidesz Party under its Leader and present Prime Minister of Hungary – Victor Orban – with China & Russia inclusive of Debt no doubt of Borrowed Funds – Mindboggling.
Hungary – who are our closest FRIENDS ?
Coincidental – China, Russia and Hungary – rightfully under the Hugh Global microscope – that highlights horrendous and mounting pressures they are or will endure.
Hungary :
” When the YOKE is Broken,
the BURDEN will be REMOVED.”
April 2022 – National Elections whether its Fidesz in your DNA or whatever, those who voted in favour of this present Government of Hungary, being led by the DICTATORIAL style of Victor Orban, who increases his POWER by Rule with Decree – HUNGARY is PAYING for its ERROR.