In 2020, the spending of foreigners in Hungary fell to just over half compared to the previous year, economic site G7 writes. This means that at least HUF 1 trillion (EUR 2.7 billion) less was left in the country. This deficit had serious ramifications on the economy, as the tourism sector is still struggling for survival.
In the years before 2020, the global and domestic tourist traffic had been constantly expanding, more and more foreign guests were coming to Hungary and using commercial accommodations (i.e. Airbnb). The number of guest nights spent increased by 2.7% in 2019 and by 14% in January; February 2020 was similar to the same period of the previous year. However, in March 2020 as a result of the coronavirus epidemic, the number of nights spent by foreign guests in commercial accommodations showed an unprecedent collapse of 68% compared to the year before.
According to the data of the Central Statistical Office (KSH), in 2019 the expenditures of foreigners in Hungary exceeded HUF 2.3 trillion (EUR 6.3 billion), but last year it barely reached HUF 1.3 trillion (EUR 3.5 billion). In addition, absolutely reliable data cannot be given because the statistical office was unable to make an accurate estimate due to the coronavirus epidemic. As a result, no data was released for the second quarter of 2020 at all, and it was also emphasized for the rest of the year that there was more uncertainty around the numbers than usual.
Total Foreign Spending from 2016-2020. Data via KSH
Unsurprisingly, the change in foreign demand was quite different for different products and services. The only category that was able to expand was learning, but the decline was also lower than average for fuel purchases and durable consumer goods, while the amount spent on food and drink fell roughly in line with the average. This is explained by the fact that shopping tourism has also decreased, but to a much lesser extent than leisure.
For example, 60 percent less people came to the country for a vacation and 75 percent less for sightseeing in 2020 than in 2019, but the number of visitors for shopping only halved.
Decline in the Number of Trips Abroad From 2019 to 2020 According to the Purpose of the Trip. Data via KSH
Furthermore, recreational tourism expenditures have decreased significantly without exception. Spending on accommodation and meals fell by almost two-thirds, spending on transport even more, and foreigners spent only one-fifth on cultural programs than a year earlier.
In light of the above, it is not surprising that the decline in the number of people from more distant countries and their spending was particularly large. In the case of the neighboring states, visitors contributing to shopping tourism and study and work have made some improvements to the statistics. However, there was not a single country from which more people came in 2020 than a year earlier.
Among the main spending countries, the number of arrivals from Germany, Austria, Slovakia, and Romania has roughly halved. However, in the case of more distant European countries which have been hit harder by the first wave of the epidemic, the decline has been 60-70 percent, and even greater for non-European countries.
Featured photo illustration by Csaba Jászai/MTVA