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Amid a labor shortage, high inflation rate, and ever growing food prices, those working in the hospitality sector expect considerable price increases both in restaurants and hotels. Predictions range from 7 to as high as 40%, which still depends on a number factors, some of them still unknown. 

As we previously reported, Hungary’s reopening is ongoing. By now both restaurants and hotels have been able to reopen, although initially only for immunity certificate holders. Ever since then, further softenings have been announced. Optimism, however, has been accompanied by a very high inflation rate, food price increase that even surpasses inflation, staffing problems, uncertainty, and the lack of foreign tourists.

An explosion to come?

Vice president of the Hungarian Hotel and Restaurant Association (MSZÉSZ) told economic portal Portfolio, that he estimates a 15-20% price increase in domestic hotels due to their increasing costs and increasing food prices.

At the same time, Csaba Baldauf also said that this year’s (re)opening cannot be compared to last year’s tendencies, as most providers have had a strong January, February, and early March before the outbreak; while at the moment, after the six month-long lockdown, the situation is a lot worse.

Hungarian accommodation reservation portal szallas.hu says based on the bookings made so far, they see an average price increase of roughly 7%. This, of course, can and does vary from region to region, settlement to settlement, and type of accommodation, but also from each individual accommodation. Szallas.hu also draws attention to the fact that many of the providers used the forced closure to make renovations, something that prices could further reflect.

They predict an explosion in demand as restrictions are further softened or ended completely. In addition, many of the hotels have yet to publish their summer offerings, likely meaning that they are waiting for further developments to establish their prices. Needless to say, if demand will indeed explode, it could mean further price increases.

Fact

The top 10 domestic destinations at the moment are (according to szallas.hu): Siófok, Balatonfüred, Hajdúszoboszló, Hévíz, Eger, Gyula, Zalakaros, Pécs, Balatonlelle, and Szeged.

Employers to offer better wages

The same tendencies have been found in another survey. Job offers in hospitality sky-rocketed to 3-4 times since the reopening, according to the survey of buying-selling and jobs portal Jófogás.

Actually, one in four employers had to lay off almost all of their staff due to restrictions and lockdown, according to the poll’s findings. And partly due to the stronger competitors (with larger financial reserves, for example), some 42% of respondents cannot fully count on the return of former colleagues.

Meanwhile, hourly wage offers also increased by 20-25%.

15-25% increase in restaurants

As a result, dining out will definitely be an even more expensive luxury too from now on. Opinions on the extent are divided though: one third of respondents foresee a 25% hike, one fifth of them however, say even a 40% price hike wouldn’t be something unimaginable.

Earlier, co-operator of popular Budapest bistros Pingrumba and Dobrumba, Gábor Manek, told azonnali.hu that they had to hike meal prices by 15-20%, while they also have to face employee shortage too.

Hungary's April Inflation Rate Highest in EU
Hungary's April Inflation Rate Highest in EU

The inflation rate, which is at an 8 year high for Hungary, surged above the market expectations.Continue reading

Budapest outlooks are worse

Budapest is perhaps in a much more difficult situation, due to its dependence on foreign tourists. Owner of multiple restaurants, Zoltán Roy Zsiday, said that while their financial situation could afford them to not lay off many during the lockdown, they themselves weren’t able to reopen all their restaurants.

He paints a pessimistic image of the Budapest caterers’ outlook, saying that the summer will be much more “painful” than February and March was. He explains that in summer, most Budapesters will visit the Balaton or go abroad. So until tourism heading to the capital resumes, the upcoming months will certainly be very painful for the caterers. 

Therefore, he is calling for further state support for the hospitality sector.

featured image: holidaymakers in Hévíz; illustration via György Varga/MTI