EconomyTravel

Hungary Poised to Become the Tourism Powerhouse of Central and Eastern Europe

Global tourism has been growing every year since 2010; all things being equal, this trend will continue into 2017 as well, and this could signal great things for the Hungarian tourism sector.

In a recent article, Hungarian news site Portfolio examined Hungary’s place in the international tourism market, as well as the opportunities facing the country’s tourism industry in the coming year.

Speaking to Portfolio, Attila Hegedűs, director of hotel and real estate consulting firm BDO Hungary, said that

Of all the factors that impact the tourism industry, the only one that could turn back [the sector’s] advancement in the long term would be an economic crisis. For this reason, tourism is like a rubber ball: it is capable of bouncing back even after a drastic fall, and that is exactly what we are seeing now.

Based on current international economic trends, Europe has at least 5-6 more years of growth before, based on macroeconomic cycles, any sort of recession might occur, that would be large enough to impact tourism.

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In general, if people benefit from larger economic prosperity, then they will be more likely to travel. Moreover, they will be more likely to take more shorter trips in addition to longer, bigger vacations. All this is aided by the fact that in the past 6 years, tourism has become less and less the preserve of a privileged few. This development is due in large part to a number of factors, such as the growth in online travel sites such as Travelocity, Expedia, and Orbitz; the spread of Airbnb and similar space sharing sites; and the rapid expansion of budget airlines such as Ryanair and Wizz Air.

According to the United Nations World Tourism Organization (UNWTO), tourism has expanded drastically since the middle of the 20th century. For example, in the 1950s, approximately 25 million tourists travelled annually in the whole world. By comparison, in 2015 that number was 1.1 billion, and current projections show continued growth. 1.4 billion tourists are expected annually by 2020, and that number is predicted to grow to 1.8 billion by 2030.

Of the 1.4 billion tourists worldwide in 2015, approximately 600 million visited Europe, while the world’s other largest tourism region was Asia and the Pacific. And according to the UNWTO, the dominance of these two regions looks to be stable for the next ten years at least.

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Graphic by Horwath HTL showing important statistics about the world tourism industry.

And, in what is good news for Hungary, according to international tourism consulting firm Horwath HTL in the past the vast majority of tourism was confined to relatively few countries, but that is no longer the case today. As the firm points out in their publication on Tourism Megatrends, “In 1950, while almost all of international arrivals (97 percent) were concentrated in only 15 destination countries, this share had fallen to 56 percent by 2009. Currently there are close to 100 countries receiving over 1 million arrivals a year.”

In Hungary, these factors, along with several special opportunities, mean that 2017 could be a banner year for the country’s tourism.

In the first 10 months of 2016, the number of tourists visiting Hungary totaled over 24 million, a 5.9% increase over the previous year. If this type of growth continues into this year as well, Hungarian tourism will do quite well.

In fact, the country’s tourism industry faces several unique opportunities in the near future, opportunities which, if handled correctly, could greatly boost Hungary’s status on the world tourism stage. These include the Swimming World Cup that will be held in Hungary this coming year; opportunities to entice more regional or European companies to move their headquarters to the country; and, of course, the possibility of Budapest hosting the Summer Olympics in 2024.

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Horwath’s publication also highlighted another, related point that should have a positive impact on the Hungarian tourism industry: increased tourism to regions of the world that were previously ignored by most tourists. As Horwath points out:

“With the growing middle class and their search for value for money and different travel interests, many destinations in the emerging and developing regions (Asia, South America, Eastern Mediterranean, Middle and East Europe, Middle East and Africa) have managed to develop and exploit their tourism potential to attract and retain visitors. These countries will soon have more international arrivals than developed markets (North America, Western Europe, developed areas of Asia and the Pacific).”

In general, there are certain trends, such as demographic changes and terrorism, that can greatly impact tourism. For example, Egypt, Tunisia, Belgium, and Turkey have all seen huge downturns in tourists due to civil unrest, safety concerns, and fears of terrorism.

For example, in 2014, Turkey was the sixth most popular tourist destination in the world, with 40 million tourists visiting every year; that number has dropped due to fears of terrorism, and even more so in 2016 due to concerns over political instability following last summer’s failed military coup. In addition, the terrorist attack in Istanbul at the beginning of this year no doubt only served to heighten such concerns among prospective travelers.

Nor is Turkey alone in suffering economically due to the aftereffects of terror attacks. For example, this past July Brussels had 40% fewer visitors than it had had during the same period in 2015. And, according to an article in the Guardian, the Paris region lost approximately €750 million in tourism revenue due to terror attacks, this despite France’s hosting of the Euro Cup last year.

Via portfolio.hu and horwathhtl.com

Images via Horwath HTL, Flickr, pexels.com, and Wikimedia Commons