Hungary’s tourism industry is feeling the pain from the economic downturn as households are cutting back spending. Data from the first summer month shows that popular destinations have seen a sharp decline in the number of visitors, while foreign guests are flocking to the country. 

Guest nights at commercial and private tourism accommodations in Hungary fell 0.8% year-on-year to 3.98mn in June. The decline in overnight stays by local guest was compensated for by the rise in foreign visitors. Hungarian guests spent 2.2mn nights during the period, down 10% y/y, while guest nights by foreigners rose 13.6% to 1.78mn.

Germans spent 259,000 guest nights during the month, more than any other nationality. Polish visitors spent 133,000 nights, followed by Czechia  with 119,000 nights.

The capital was the most popular destination in June, accounting for 1.16mn guest nights

Revenue of hotels and resorts rose 17% y/y to HUF54bn (€138mn) in the first summer month.

In the January-July period, Hungarian hotels with at least three starts registered 15.9mn guest nights, up 1.3% y/y. The number spent by domestic travellers fell 8% to 8.1mn and the number spent by foreign visitors grew by 13.2% to 7.87mn.

The two primary tourism regions of the country, Budapest and Lake Balaton, showed starkly contrasting results. Foreign guest numbers at Budapest hotels increased by 800,000 in the January-July period to 5.88mn.

Hungarian guests had spent 8.1mn guest nights in hotels outside the capital, a decline of slightly more than 700,000 in one year. Overnight stays at Lake Balaton hotels by domestic guests fell by roughly 200,000 to 1.77mn.

Hotels in Budapest are bracing for a strong year, boosted by mega events in August. The Hungarian capital will be the venue for the IIAF’s World Athletic Championship later this month. Organisers expect 50,000 visitors and potentially 200,000 guest nights at 4-5 star hotels.

The multicultural Sziget music festival is expected to draw half a million visitors in mid-August from the Benelux countries, France, German, and the UK among the main target markets. The peak season generally ends with the August 20 fireworks on Hungary's national holiday celebrating the country's foundation.

Despite the recession, the government is planning to spend a total HUF8bn-9bn on three days of festivities over the weekend that will culminate in Europe's largest fireworks. The celebrations will be watched by hundreds of thousands of people along the banks of the Danube.