Domestic Guests to Drive Tourism Recovery Amid Labor Shortage Fears

Interview

Rudolf Semsei, vice president of the Hungarian Catering Industry Association.

Labor shortages remain a central problem for the COVID-ravaged tourism industry but, due to travel restrictions abroad and thus a strong interest in domestic holidays, the chances are that the sector can close a successful season this year, experts tell the Budapest Business Journal.

“Thanks to the successful vaccination program, the focus is now on restarting the industry. The Hungarian Tourism Agency (MTÜ) is confident that the sector will recover quickly,” the authority says.

Due to the prominent role of domestic tourism this year, several developments are currently underway, all of which will strengthen the number of offers that are on a par with European quality, the organization adds.

With the number of summer bookings rising, there is every chance that this will be a more successful summer season than last year, with at least 17 million guest nights compared to 13.5 million in 2020, MTÜ says.

This June, the number of guests nights spent or booked is 21% more than last year. Year. Foreign guest nights are also on the rise, albeit from a low bar, with the 2021 figure up 157% compared to 2020, MTÜ says. After Germany, most bookings come from Romania, the Czech Republic, France, and Poland.

According to information gathered by the National Tourist Information Center, 2.1 million guest nights have been booked for July and 1.6 million for August. Accommodation in the Balaton region is the most popular with 35% of the total, followed by the Mátra-Bükk mountain region (8%) to the northeast, Debrecen, Hungary’s second city, and its surroundings (7%), as well as Bük-Sárvár (4%) in the west of the country. Accommodation in the capital makes up 10% of overall guest bookings.

Given that many are making last-minute travel decisions, it is likely that the current figures will change significantly in the coming weeks, analysts say. The opening of the Schengen border will bring a surge in inbound tourism, as surveys show that most Europeans want to travel abroad. Hotels, private and “other” accommodation are the most sought after, while interest has shifted towards quality services.

Key Issue

What is clear is that the labor force will be one of the key issues for the tourism sector this year and in the future. Since the reopening in May, job advertisements abound on all platforms; the demand for workers has spiked.

In Budapest, downtown facilities with no terrace have had the hardest time restarting as, without tourists or office workers and outside seating, there is little traffic, Rudolf Semsei, vice president of the Magyar Vendéglátók Ipartestülete (Hungarian Catering Industry Association or MVI), tells the BBJ.

Restaurants with terraces and in the suburbs have fewer problems in this respect, but they lack a sufficient workforce. Migrating to other employment sectors has become a serious problem; many who worked in the industry prior to the pandemic are wary of returning amid concerns of a fourth wave arriving in the fall, according to Semsei, who is also the owner-managing director at Budapest Party Service and the VakVarjú restaurant.

Similarly, at Lake Balaton and countryside holiday resorts, it is the shortage of labor that is causing a problem.

“People will make a decision [on returning to the sector] after the summer at the latest; by then, we will see whether or not the pandemic returns,” Semsei says. But the peak season is by no means over with summer, he adds. In Budapest, the fall and the period leading to the winter holidays is usually the busiest with corporate events and conferences.

He is confident that, unlike last year, when firms canceled their plans, many companies are determined to hold those events this year.

Growing Interest

“Based on the number of requests for quotes, we see growing interest,” he says. “Compared to international conferences generally booked years in advance, these may be smaller-scale events, but still many with a few hundreds of attendees,” he explains, adding that roughly 50% of the 2019 volume could be reached this year.

Regarding long-term labor supply, the expert is optimistic. “Hotel and hospitality continue to be the most popular faculties at colleges, so I am not worried about that,” Semsei notes. The rise of celebrity chefs and the like have helped make the profession even more popular, as does dual training.

“Our responsibility is to offer proper training and show an attractive career path for the young. Success needs time, though; the time it takes a high-school student to qualify can be five to eight years,” he adds.

The Hungarian Tourism Agency also has taken steps when it comes to the workforce. An emphasis will be placed on vocational training and education, and a “Career in Tourism” campaign will be launched, which will look to boost the prestige of professions in the sector with short films, image videos, and a new website (www.karrieraturimusban.hu). It also hopes to inform students and employees about prospects and career paths.

The revenues generated by the growing guest traffic will bring a real recovery for the sector in the first place, though. To that end, a large-scale traffic stimulus campaign has been launched, MTÜ notes. This is tailored to different parts of the country, conveying messages with specific themes based on each location.

To further boost recovery, measures alleviating some of the burdens from industry players will remain in force, including ironically, dropping the tourism development contribution until the end of the year.

This article was first published in the Budapest Business Journal print issue of July 2, 2021.

ADVERTISEMENT

Reforms to raise productivity would strengthen recovery - OE... Analysis

Reforms to raise productivity would strengthen recovery - OE...

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.