Budapest, 21 February 2013. 

According to the database of KSH (Hungarian Central Statistical Office) in Hungary both the number of guests and guest nights increased by 3.6% and 4.8%, respectively, in 2012, reaching a record high level. “Domestic tourism nights practically remained the same, while foreign tourism nights increased by 8%. Hotels performed beyond average; especially four-star hotels where foreign guest nights exceeded 18%. The number of guest nights (domestic and foreign) increased by a total 2.5%.” – said Norbert Szircsák, researcher and valuation consultant at Colliers International Hungary.


Guest nightsIn Budapest, the number of guests and guest nights reached their peak of the past decade, the former exceeding 3 million guests, the latter being over 7 million nights. However successful it may seem, these numbers were performed beside an extending capacity, while the average room rates remained at 2005 level. Taking inflation into consideration, the overall picture is more unfavorable, but all in all, the signs, in fact, are promising. Provided that the number of guests keeps increasing and the low room rates are going to rise, the profitability of hotels may recover to a normal level. There is space for such extensions knowing that Prague hosts twice as many visitors as Budapest, and Vienna has 60% more tourists annually compared to our capital.

Domestic tourism may be strengthened by the expected relatively high EUR exchange rate, which attracts Hungarian tourists to inland tourism, while makes Hungarian accommodation more favorable for foreign visitors. SZÉP cards showed highly popular as last year’s numbers indicate:  an amount of 70 billion HUF was transferred to these accounts out of which 44 billion HUF has been spent by card owners so far.
The bankruptcy of the Hungarian Airlines (MALÉV) resulted in a rather confusing outcome:  the traffic of the airport did not decrease as much as it was expected; however, the loss of business travelers was only compensated by low fare travelers; which was only favorable for lower-category hotels.

New Openings in BudapestIn 2012 six new hotels (+1 reopening) were opened in Budapest extending the supply with a total number of 550 rooms. This number is somewhat lower than that of the year previous; further, it is highly likely that the new supply cease temporarily in the future despite the ongoing and abandoned developments on the market. There are no expected hotel openings in the capital for 2013, unless the problems around the long-time deferred opening of Hotel Rácz are solved.

Developments, refurbishments, and extensions of hotels are still in progress in the countryside, mostly in the framework of different EU projects. These units are mainly small hotels; however, there are some larger ones such as ETO Park Hotel which opened last year or the Four Points by Sheraton expected to open this year. “The above described tendency may continue in the future, as owing to New Széchenyi Plan touristic developments are to be launched in the amount of 142 billion HUF out of which a total amount of 16.5 billion HUF is granted to developments for business accommodations in the total value of 25 billion HUF.” – said Norbert Szircsák.

The complete hotel market report can be read here.

 

Source: Colliers International