The View 9

HOTEL MARKET

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LAURENT LASSIER Director, Head of Hotel Services

STRONG FUNDAMENTALS, MORE FOCUS ON THE COUNTRYSIDE After countrywide tourism demand remained fairly flat over the first half of 2019, overall guest inflow picked up somewhat later in the year and guest arrivals in Hungary ended up expanding by 2% y/y to 12.8 million, slowing to a third of the growth rate seen in the preceding year. The moderate increase was primarily supported by an improvement in foreign tourist visits, while domestic demand largely stagnated. Similarly to the dynamics seen in previous years, guests coming from abroad preferred spending their nights in Central Hungary, especially Budapest (+4% y/y), while locals increasingly targeted the Transdanubian region (+3% y/y) with a bit less focus on Lake Balaton (+2% y/y) and the capital, where domestic traffic remained flat. The modest 1.1% growth of total guest nights in 2019 is roughly in line with that in Austria and the Czech Republic, each registering annual growth around 2%, while other regional peers with lower tourism demand figures (like Poland or Romania) registered significantly higher growth rates based on ATD-November figures provided by Eurostat. Despite the strong foreign tourist appetite heavily concentrating in the capital city in recent years, regional destinations such as Central Transdanubia, Northern Hungary or the Southern Great Plain also enjoyed a favourable 2019 in terms of tourism demand as they kept registering above-average gains in guest arrivals from the neighbouring countries.