Playing the trump card to boost domestic tourism


The introduction of the Széchenyi Relaxation Card and the termination of some of the most popular paper-based holiday and meal vouchers were the most important changes the government made to the cafeteria scheme at the beginning of this year. And while the figures do seem convincing at first sight, there remain some lingering doubts as to whether the change will meet its primary purpose of boosting domestic tourism.

Do you consider Hungary a perfect destination for your summer holiday? If your answer is yes, I have news for you: most Hungarians, especially the well off, would be hesitant to agree with you. Hungary might be beautiful, but the Hungarian tourism industry has an ambiguous reputation, and Hungarians who can afford it more often than not opt for holidays at the relatively nearby seashores of Croatia, Slovenia or Italy, or the holiday hubs of Greece, Egypt or Spain, driven by a better price to value ratio than Hungary has to offer. Which is exactly why the government thought it had to intervene, and encourage holidaymakers to keep (or rather to spend) their money at home, boosting domestic tourism, and growing the Hungarian economy. Although the holiday voucher has been around for quite some time, according to government officials it had wandered off-track, completely losing sight of its original aims, so more drastic changes were required: Enter the Széchenyi Relaxation Card.

Security concerns


Shortly after the delivery of the first batch of SZÉP Cards, IT professionals pointed out significant security gaps in the payment process. While the cards look like traditional credit or debit cards, there is no PIN protection involved, and the bill printed at any POS terminal contains all the information that is needed for an online transaction. “These receipts contain the entire card number (not just the final four digits as in the case of bank cards), the card’s expiry date, the issuer’s name and the actual balance,” reveals a study by Balabit IT Security. Leaving these receipts at the cashier can easily result in abuse of all this sensitive information. The risk is even higher as two copies of the receipts are printed, and one signed copy stays with the vendor.

In response to these concerns, the three issuing banks published a joint release, saying that the security system is identical to the one used for healthcare cards, that have been on the market for eight years without major problems or abuses. According to the banks’ risk analysis, the number of unauthorized uses of SZÉP Cards will be around 100 per 1,000,000 transactions.

The Széchenyi Card (named after István Széchenyi, an 1800s politician known for his efforts to beef up the Hungarian economy, the card’s acronym, “SZÉP Kártya” translates to “NICE Card”) is a completely new item in the cafeteria scheme. It substitutes and merges various, paper-based vouchers into one, more centralized electronic payment system. Each plastic card has three sub-accounts, dedicated to collect funds for accommodation, catering and recreation, respectively. There is a top limit assigned to each sub-account, but other than that, employees are free to determine how they want their cafeteria benefits to be distributed among the three. Payments can be made at a POS terminal, via online transfer, or by phone.

“According to the first figures we see, the popularity of the SZÉP Kártya far exceeds our preliminary expectations,” says István Marosi, head of the tourism department at the National Economy Ministry (NGM). “By the end of June 2012, some 17,000 employers had joined the SZÉP Kártya program, meaning that more than 670,000 cards have already been issued. The money transferred to these accounts exceeds HUF 43 billion, while the number of service providers contracted to accept the card is well above 32,000, and growing. Since this year’s cafeteria benefits have to be spent by the end of next year, we are confident that this sum will appear in the Hungarian economy within a reasonable timeframe,” he explains.

Not so nice for them

Although these numbers seem impressive, the mood around the new scheme is not unequivocally cheerful. “Some 60% of family-owned accommodations and guesthouses miss out on the benefits provided by the SZÉP Kártya,” states a survey undertaken by in June 2012. The website’s experts asked 211 randomly chosen businesses about their methods of accepting the SZÉP Kártya. The conclusion: trends are improving and business owners are becoming more aware of legal requirements, but there is still a long way to go, as complexity remains a major challenge for most. The three sub-accounts require separate contracts from the service providers to be able to accept money transfers, which is multiplied by the three card-issuers (OTP Bank, K&H and MKB), often resulting in confusion. Some 3% of the survey’s respondents will only accept a card issued by one specific bank, and the rate of those who are contracted by all three issuers is 65%. “While these numbers indicate an improvement, from a user’s point of view, this rate is still far from full coverage,” highlights cafeteria expert László Fata. He says that the confusion grows even further when it comes to sub-accounts. At the time of the survey, accommodation units could charge all three sub-accounts for their services (a regulation that was changed in the middle of the summer holiday season, with effect from July 1), although this would have required three contracts with three issuers each, which proved too big a challenge for over 60% of vendors.

A clear-cut success?

On the positive side, however, most providers point out that they feel the benefits of the lowered commission rate, as bank commissions were fixed at 1.5% in contrast with the 5-6% commission charged when dealing with paper-based vouchers. Participants of the survey also confirmed that they were overall happy with the new scheme, despite initial difficulties.

While the popularity of the SZÉP Kártya – partly due to the lack of competition after the termination of holiday vouchers – is undeniable, the first statistics raise questions as to whether it can fulfill its original goal: amplifying domestic tourism. According to Q1 figures of Hungary’s Central Statistics Office (KSH) the number of days Hungarians spent traveling within the country is down by some 12% y/y, although it’s obvious that the change in the cafeteria scheme is just one of the many contributing factors in the area.

Another survey organized by C1 Cafeteria, however, highlights that domestic tourism might not be a top priority of employees when they distribute funds amongst their SZÉP Card sub-accounts. Asking 30,000 card owners revealed that some 56% of the funds are directed to the catering sub-account, and it is anticipated that at least a part of the 28% of the money transferred to the accommodation sub-accounts will also be spent in restaurants.

According to Marosi it is too early to see the impact the new scheme will have on the tourism industry, especially because this year is still a transfer period, with both SZÉP Cards and paper-based vouchers present on the market, as the last set of holiday vouchers are valid until December 2012. The key metric of success for NGM is currently the pace of growth and popularity with employers. “Based on the above, we deem the SZÉP Kártya a clear-cut success,” Marosi concludes.



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