Hungarian tourism in crisis: is there a way out?

The question is not whether there will or is a problem, but how big. The situation is critical and the coming months could present a bigger challenge for tourism operators than the Coronavirus pandemic in 2020.

Hotels and restaurants had to close and tourists were not allowed to visit the country during the Covid-19 outbreak due to restrictions. Now, although hotels and restaurants wish to be open, the cost will be so high that many will not be able to do so. In the coming days and weeks, the management and owners of almost all service providers will be calculating how to deal with the energy surge, as can be read in an article published by Portfolio.hu.

What about the war’s effects on Hungary?

According to experts, even if peace comes in the coming months, high energy prices are likely to be with us for some time to come. The task for operators is not to survive this autumn-winter period, but to prepare for how they will deal with it in the future.

If we compare the current situation with the difficulties caused by the pandemic, we can see that those businesses were able to survive the forced closures where the owner had sufficient capital available or where proper management had created reserves to finance the transition period – Bálint Ripper, manager of PWC Hungary (PWC Magyarország), says the latter is more important.

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What if a place decides to close?

If a place decides to close down to get through the autumn-winter period, it runs the risk of not reopening easily in the spring. With the closure, the workforce is expected to be made redundant. The closures during the pandemic were extremely difficult for workers. However, they quickly adapted to the situation and found jobs in other sectors and with other service providers.

If similar redundancies occur again, it is likely that many people will leave the sector again. These workers’ confidence will be much harder to regain, making it very difficult to reopen the units that have closed.

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Influence on family travel

Families are facing the new overhead regulations for the first time. The extra expenses will surely influence the decisions they make when planning trips at home or abroad, Ripper says. Those who used to prefer foreign travel are now considering it more carefully, as the popular Western European countries and cities are more expensive than Hungary. On top of that, airfares of a few thousand forints are only available in a limited number of destinations. Domestic wine, gastronomy and cultural tourism, or even active and cycling tourism, could now get a big boost from Covid and energy prices.