Significant price rises to come in Hungarian hospitality industry

Although last year wasn’t kind to the industry either, this year already started with a price hike. For restaurants and hotels alike, a good 8-10% increase is expected, even surpassing inflation.

One would think now that the energy prices have dropped, prices would finally stop going up, but that’s not the case. Costs keep on rising, partly due to salary increases. Still, the same goes for everybody, the only thing that differs is the solution that the restaurants opt for. This means that the price change may vary from restaurant to restaurant.

Business owners react all around the country

In Békéscsaba, the manager of the Slovak Restaurant and Guesthouse, Ildikó Szabóné Szaszák, spoke of the coming troubles and how they plan to solve the issue. According to her grasp on the issue, they will need to raise prices by at least 10%. She said they will try to raise the prices around mid to late January. Their prices will go up in every service, including delivery. This is mainly because of the high gasoline prices, not only the increased wages.

In Pécs, the Megyeri Burgers restaurant is opting for another solution: a modification of opening hours. They tried for the widely used option, since they are already experiencing a slowdown in traffic. They now welcome guests from 5 PM instead of 11 AM on weekdays, closing at 11 PM. Cutting out the lunch rush, they hope for a moderate price hike in the future.

They have already inreased their prices last year, closing shop for the old year with a proper bang. Regarding the issue, the restaurant’s co-owner, Róbert Varga, told Index that “at the end of the year, we were forced to make a 5% price correction. Hopefully, there will be some positive economic changes in the near future that will allow us to leave the prices untouched this year.”

In Győr, at the Klasszis Bistro restaurant, prices are not changing for now. Here, the owner, István Horváth, explained their tactic for the economic drought. He said they tried to reduce costs, wherever they can. In his words, “we try to obtain equipment that consumes less electricity and, through tenders, we attempt to utilise solar energy”. This is an accurate overview of how the restaurants try to cope with the rising prices.

Official response

According to the president of the Hospitality Industry Association, owners all across the country are cautious. Most fear their customer base will desert them if they try to pass the increased costs onto them. In the previous year, the businesses that have opted for the strategy have suffered significantly more, and their turnover decreased.

In the global respect, Hungary is still considered cheap, and has not lost its status on the ‘budget countries’ list. Especially Budapest, which is famous for being the “Paris of Eastern Europe”, with the prices to match. This is why in the coming year, those located in Budapest may experience a larger increase than the national average. President of the Hungarian Hospitality Association, Tamás Flesch, stated that the expected price hike for the next year will be around 10%.

This drastic rise is a multi-component issue, he said. Despite the first look, where we can see the fall in the global energy prices, the domestic hospitality industry’s prices will keep on going up. This has many elements to it. One being the fact that most hotels buy electricity and gas on the market. Another fact worth mentioning is the expected sky-rocketing of the water prices. Add to it all the significant cost increase in terms of wages and you have the whole picture.

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