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Hungary Tourism Report Q2 2012
Business Monitor International, March 2012, Pages: 65
Growth in foreign tourist arrivals (non-residents staying at least one night) was surprisingly strong yearon- year (y-o-y) in the first three quarters of 2011, up by 8.5%. Growth was boosted by a solid performance in Q311, when there was a 9.6% increase in arrivals compared with Q310, after growth rates of 7.3% and 7.7% y-o-y in Q111 and Q211 respectively. The number of same-day visitors rose by a more modest 2.4% y-o-y in the first nine months of 2011.
The hospitality sector is set to record a mixed performance in 2011, with a downturn in domestic tourism and modest growth in foreign tourism. The total number of nights by foreign and domestic tourists spent in all accommodation establishments declined by 1.3% y-o-y in the first 11 months of 2011. Despite international visitor nights rising by 2.3% y-o-y, to about 9.4mn (approximately 51% of the total), nights spent by domestic visitors declined by nearly 5% y-o-y, reflecting the weak state of the Hungarian economy. The number of overnight stays by German tourists – the key source market in the accommodation sector – continued the downward trend of recent years, although the rate of negative growth has eased, falling by2.4% y-o-y over January-November. Nights spent by tourists from the other major source markets, Austria, the UK and Italy, were up by 2.5%, 4.4% and 3% y-o-y respectively. Growth was stronger in terms of overnight stays by tourists from the US (+6%) and Russia (+19%).
Based on solid growth in foreign tourism in Q311, BMI has increased its annual growth estimate for tourist arrivals in 2011 to 9.1%. Our growth forecasts for 2012 and 2013 have been edged down to 4.8% and 5.5% y-o-y respectively, mainly due to a weaker outlook in the the major source region, the eurozone. We now expect a mild recession in the eurozone over 2012, with growth in the coming years likely to be very weak. Our growth projections stand at 1.6% for 2011, -0.5% (revised down) in 2012 and 1.3% in 2013. Growth in Germany is forecast to slow sharply, from 3.0% in 2011 to 0.3% in 2012, picking up to 2.1% in 2013. In Austria, growth is expected to slow to 0.8% in 2012 from 1.8% in 2011, edging up to 1.7% in 2013. BMI’s view of continuing short-term weakness of the Hungarian forint should help to counter weak demand conditions in the major source markets.
Malév Hungarian Airlines Ceases Operations
On February 3 2012, the recently renationalised airline Malév Hungarian Airlines ceased all flight activity to minimise its losses after nearly 66 years of continuous operation. In January, Malév said it did not face an immediate payment liability following an EU decision that Hungarian state aid given to the airline between 2007 and 2010 was contrary to EU regulations. However, in the same month the European Commission ordered the grounding of all Malév flights to repay state aid worth about EUR130mn. On February 2, the Hungarian government placed Malév under extraordinary protection from creditors and appointed a receiver as the government prepared for the possible end of flights by the airline. Suppliers quickly lost trust in Malév and sought payments for their services in advance and the situation soon became untenable.
The closure of Hungary’s national airline resulted in many passengers being stranded in a number of European airports, damaging the country’s reputation. The negative consequences for foreign tourism are unlikely to be severe as numerous competitor airlines, particularly low-cost carriers, are taking advantage of the grounding of Malév’s fleet. Prior to the closure, Malév said that it was in talks with a potential investor or investors to sell the company, while the government has since said the airline could be relaunched if suitable investors can be found. However, the customer base for a rejuvenated Malév would be substantially weakened.
On the same day that Malév suspended its operations, low-cost airline Wizz Air announced it would invest HUF25bn (US$100mn) to expand its operations in Hungary. The airline will add two Airbus A320 aircraft to its Budapest base, a 66% increase in overall capacity. A new Budapest-Bucharest route will start in summer 2012.
Taking advantage of the grounding of Malév, Ryanair, which is one of Europe’s leading low-cost airlines, has based four brand new Boeing 737-800 aircraft at Budapest Airport since February 2012.
Business Monitor International's Hungary Tourism Report provides industry professionals and strategists, corporate analysts, tourism associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Hungary's tourism industry.
Hungary Tourism SWOT
Hungary Political SWOT
Hungary Economic SWOT
Hungary Business Environment SWOT
Industry Forecast Scenario
Table: Arrivals, 2008-2015 (‘000, unless stated)
Table: Hotels Data, 2008-2015 (‘000, unless stated)
Table: Tourism Expenditure And Economic Impact, 2008-2015
Table: Inbound Tourism, 2008-2015 (‘000 unless stated)
Table: Outbound Tourism, 2008-2015 (‘000, unless stated)
Market Overview – Travel
Table: Hungarian Airline Market Key Players, 2010
Car Rental Firms
Global Oil Products Price Outlook
Market Overview – Hospitality
Table: Hungary Accommodation Sector Leading Operators, 2010
Business Environment Outlook
Table: Central And Eastern Europe Travel And Tourism Business Environment Ratings
BMI’s Security Ratings
Table: Europe Security Risk Ratings
Table: Europe State Terrorism Vulnerability To Terrorism Index
Europe Security Overview
Table: Global Assumptions, 2010-2016
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
Table: Developed Market Exchange Rates, 2011-2013
Table: Emerging Market Exchange Rates, 2010-2013
Table: Developed States Real GDP Growth, 2010-2013
Table: Emerging Markets Real GDP Growth 2010-2013
Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%)
Danubius Hotels Group
Malév Hungarian Airlines
How We Generate Our Industry Forecasts
Tourism Ratings – Methodology
Table: Tourism Business Environment Indicators
Table: Weighting of Components
- Accor-Pannonia Hotels
- Danubius Hotels Group
- Hilton Worldwide
- Malév Hungarian Airlines
- Wizz Air
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