Editorial: In Praise of the Tourist Dollar

Analysis

Photo by Leka Sergeeva / Shutterstock.com

When it comes to the Hungarian economy, tourism is big business. According to no less a figure than Kam Jandu, the CEO of Budapest Airport, the company that runs Ferenc Liszt International, it accounts for “approximately 13%” of the country’s gross domestic product.

I assume that figure includes both direct and indirect contributions, but even so, it is an impressive amount. Website statista.com says, “Hungary’s revenue from travel and tourism is expected to reach USD 1,555 million in 2023.”

According to the same source, more than 46 million tourist trips were made to Hungary in 2022, of which almost 13 million were overnight. Most tourists came from Slovakia and Romania: 9.2 million and 7.5 million, respectively. International tourists visiting Hungary spent HUF 2.3 trillion in 2022, Statista says, a significant increase compared to the preceding years, which set a low bar as they were severely affected by the COVID-19 pandemic. Accommodation and restaurants accounted for approximately one-third of the spending, followed by shopping and wellness-related expenditure.

No wonder, then, that the airport has plans to bring back Terminal 1, mothballed since the collapse of the Hungarian national flag carrier, Malév, back in February 2012. I didn’t particularly like the old Terminal 1 (in my memory, it was full of dark wood paneling and quite depressing if you were that way inclined), but I have a soft spot for it none-the-less: It was my gateway to Hungary when I came here for the first time on January 5, 1998, back when it was still called Ferihegy.

It had a facelift in 2005 when it was used for low-cost carriers and presumably will be given something rather grander now, as Jandu estimates the reopening involves a cost “of more than EUR 120 million.” He says work could start “immediately” once the planning permissions are granted. There’s an even more grand scheme in mind, mind you: Budapest Airport hopes to open Terminal 3 in 2030, a project “that can be expected to cost more than EUR 1.5 bln.”

The need is clear. By next year the airport expects to be back to pre-pandemic numbers of passengers, and there is a limit to how many can be accommodated in Terminal 2A and 2B. Currently, it handles 15-16 million. Terminal 1 could add 4.5-5 million. But Jandu has big dreams, as you will discover inside.

We also cast our eyes over the hotel scene, and not least the moves to make Budapest more attractive as a destination for the luxury market, and talk to both newcomers and veteran watchers of the sector. One thing is clear; for all that residents may complain about the tourists that throng our streets, Budapest is a place worthy of discovery and which people are increasingly keen to experience. And frankly put, the economy could not afford to go without them.

Robin Marshall

Editor-in-chief

This editorial was first published in the Budapest Business Journal print issue of June 30, 2023.

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