Energy Crisis: 1 in 4 Hotels Could Close This Winter

A quarter of hotels may close for the winter in Hungary due to the plummeting energy prices – at least that is what is likely to happen according to the Association of Hungarian Hotels and Restaurants.

Such a development would leave many caterers out of work, Tamás Flesch, honorary president of the association, told ATV.

He said that rural hotels are more at risk, especially those with large wellness areas and those whose energy systems are completely outdated.

The price of the three main cost items for domestic hotels – wages, overheads and food inputs – have increased dramatically in recent months. Energy costs, for example, have risen 3-4 times compared to the previous period, the business news site napi.hu reported earlier.

This means that before the war in Ukraine, energy costs accounted for 4-5% of total revenues in city hotels and 12-13% in spa and wellness hotels. Since then, this has risen to 13-14% for city hotels and 18-19% for spa and wellness hotels.

At the moment, there is a risk that hoteliers could face higher figures in the future, István Kovács, presidential adviser of the Association of Hungarian Hotels and Restaurants, told napi.hu.

According to Kovács, every hotel knows why its guests choose them and if it is wellness or health care, it is risky to try to save money by cutting the services offered here. The same applies to restaurant services. Reducing the quality or range of services is a double-edged sword.