Abstract
Tourism Overview
Final data for 2008 show an increase in foreign visitor
arrivals of just 0.4% year-on-year (y-o-y) to
around 39.3mn (representing
a continuing slowdown in growth of arrivals over the last four years). Of
the
top four source markets, the number of arrivals from Romania were up
some 1% y-o-y, while visitors
from Slovakia and Germany increased 4.3% and
1.4% y-o-y respectively, but arrivals from Austria
declined nearly 2% on
2007. Overall, visitors from the EU were up a reasonable 2.5% y-o-y (with
buoyant growth in arrivals from Poland, up 18% y-o-y, and the Czech Republic,
increasing nearly 17%
y-o-y). Early indications from the hospitality
sector, however, suggest that the tourism sector is in for a
major
downturn in 2009.
Hospitality
Data for 2008 records a disappointing
year in the hospitality sector. The total number of nights spent in all
accommodation establishments last year were down 1.5% compared with 2007 to
around 19.8mn. Tourist
nights by international visitors, which amounted to
about 9.9mn, declined by 2.3% y-o-y. With regard to
the key source market,
Germany, and following relatively large falls in recent years, the number of
nights
by German tourists declined a further sizeable 10.4% y-o-y. The
second largest source market, Austria,
recorded a decline in tourist
nights of a more modest 3.3% on the previous year. Two other major source
markets, Italy and the US, also both recorded negative growth in tourist
nights (down 11.2% and 10.4%
y-o-y respectively). Tourist nights accounted
for by the UK, on the other hand, were up a marginal 0.5%
y-o-y, although
in the last two months of 2008 there were massive falls of about 30% y-o-y in
tourist
nights by UK arrivals. The average occupancy rate of hotel rooms
was 48.5%, with 54.7% occupancy in
four-star hotels and 61% in five-star
hotels. The most recent hospitality sector data for the first two
months
of 2009 suggest a major downturn is in the offing. The number of nights spent
in all
accommodation establishments declined nearly 11% y-o-y, with
tourist nights accounted for by
international visitors falling more
than14% compared with the same period in 2008.
Forecast Scenario
This
quarter, BMI has revised down its forecast for foreign visitor arrivals to
Hungary in 2009, with
negative growth of 8% y-o-y now expected. Recession
in both Romania and Slovakia, and the eurozone
(which accounted for nearly
83% of visitors in 2008), will have a sharp negative impact on foreign
arrivals to Hungary in the short term. Moreover, the economic downturn in
major source markets is also
likely to outweigh any benefits to Hungary
(for the tourism sector) from further weakness in the
Hungarian forint
against the euro. Mild recovery in growth of foreign arrivals is likely to
occur from
2010, however.
Malév Hungarian Airlines
In order to
improve the capitalisation and solvency of the national flag carrier, Malév
Hungarian
Airlines, Russian owners AirBridge will ensure a HUF3bn capital
injection for the airline. This is in the
wake of Malév having to delay
wage payments earlier in the year, which it blamed on deteriorating
economic conditions in Hungary and the global financial crisis
Wizz
Air
Hungarian low-cost airline Wizz Air carried 5.8mn passengers in 2008,
a near 40% increase y-o-y
(following a similar annual rise in the previous
year). According to the privately-held company, it
recorded an operating
profit for the third consecutive year in 2008. Despite an industry downturn,
Wizz
Air aims to achieve robust growth in passenger numbers in 2009.
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