Hospitality Recovery Could Continue, Says Analyst

The recovery of hospitality may continue in the coming months, supported by the strengthening of international tourism, which may also help the growth of gross domestic product (GDP) in the coming quarters, according to the tourism economic analysis of Gergely Suppan, senior analyst at Magyar Bankholding.

The improvement in tourism will also support the balance of services and, through it, the current account balance, the analysis, sent to the state news agency MTI on Thursday, added.

Compared to a base that rose due to a gradual opening a year ago, the volume of tourism turnover rose 14.7% in June this year, after a 34.3% increase in May, while its turnover rose 35.3%. In the second quarter, the volume of restaurant turnover grew by an average of 46%, after an average increase of 80.5% in the first quarter, while turnover expanded by 60%, so that the restaurant sector continued to provide a significant contribution to GDP growth, the analysis said.

The analyst stressed that the gradual lifting of restrictive measures taken early last year against the second and third waves of outbreaks a year ago will slow the pace of growth in the coming months, but that growth could still be maintained.

The almost complete lifting of restrictions on the epidemic is a strong boost to European tourism, but the outlook is dampened by a more cautious attitude to the war and a sharp rise in energy and food prices, which could have a significant negative impact on purchasing power. However, the recovery in visitor arrivals from outside Europe could be much slower.

According to Gergely Suppan, major domestic sporting events could once again attract a greater number of foreign spectators. A number of mass festivals were cancelled last year, so the resulting hospitality turnover was lost last year, but if they go ahead as planned this year, the sector's performance could improve sharply in the third quarter.

However, the hospitality sector has faced a number of challenges in recent times, with increased labor shortages leading to significant wage increases and double-digit price rises seeming inevitable due to soaring energy and food prices, the analyst noted.