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Conference tourism gets new impetus

Hungary’s six-month EU presidency has given a much-needed boost to conference tourism, but the Balaton region is still waiting for fair winds.

Unless you’re an expert on biochemistry, the title “high performance liquid phase separations” might not sound like a mind blowing topic for a conference. But this international event attracted nearly 1,000 participants to the Budapest Congress and World Trade Center in June – only a fraction of the more than 17,000 who visited conferences in Hungary in the first three months of the year.

Conference tourism is an important segment of Hungary’s inbound tourism. About 10% of foreigners visiting Hungary arrive for conferences and congresses and they spend twice as much on average compared with a leisure tourist. Conference tourism can serve to extend the summer season and generates notable tax revenues, while business visitors often return to the country as leisure tourists.

The latest statistics show that conference tourism has been doing quite well after years of decline. Four and five-star hotels with conference facilities registered a 15% increase in the number of guests participating in conferences between January and May of 2011 from a year earlier, the Central Statistical Office (KSH) said. Also, organizers and conference venues reported an increase in the number of conferences and seminars in the first half of the year.

One obvious reason for conference tourism getting back on an upward path is Hungary’s half-year turn at the EU presidency in January–June this year, but the market already showed some improvement already last year, after touching bottom in 2009.

According to data from Hungarian Tourism, 2010 saw a nearly 50% increase from the previous year in the number of international conferences, and the number of participants showed 53% growth on a year-on-year basis.

The international conference market grew further over pre-crisis levels in the first quarter of 2011: there were 90 international conferences organized in Hungary in Q1, with a total of more than 17,000 participants. Both figures are higher compared to Q1 2010 as well as to Q1 2008 (66 and 80 events, respectively, with 17,000 and 16,000 participants).

The number of events grew gradually in January-March, and the total length of conferences was 294 days during the period.

Shorter events are getting more popular. While the number of events is on the rise, their duration has decreased a little. In the first three months of last year, the average duration of a conference was 4.8 days, falling back to an average of 3.3 days in the same period of this year.

As for venues, two-thirds of international conferences were held in Budapest in Q1. In the countryside, mainly due to Hungary’s EU presidency in the first half of the year, Gödöllő was the most popular location (nearly 18% of the events took place there), followed by Szeged and Pécs.

Hotels are still the most popular locations for conferences, but their share fell back some 20% from last year, in line with the increasing role of other locations such as scientific institutions and universities.

More than half of the conferences saw visitor numbers between 100 and 300, and 10% of the events were attended by 1,000 people. Only two conferences hosted more than 1,000 participants in the first months of the year.

Statistics show that international conferences mainly attract foreigners: 84% of the visitors arrived from abroad. Of the 90 events organized in Q1, 13 were visited by foreigners only.

Waiting for fair winds

The country’s conference tourism industry has high hopes for the area surrounding Lake Balaton, but locals are not as optimistic.

The latest statistics show that conference tourism on a national level is recovering strongly. Lake Balaton, with its tourism services built to accommodate holidaymakers, is – on paper – one of the areas of the country that could benefit most from the trend. However, regardless of the high hopes Hungary’s central tourism agency has for the region, a blossoming conference industry on the shores of the lake is still far from being a reality.

The promotion agency Magyar Turizmus (MT) Zrt announced in March that the overall number of international conferences in Hungary increased by 50% in 2010. Unfortunately for operators around Balaton, the lakeside area could not substantially capitalize on the trend, as it accounted for only 2.6% of the national total.

Even in Balatonfüred, the best-known conference and congress location in the Balaton region, the number of events is on the decrease. “The crisis has left a strong mark on the sector meaning that conference attendance fees pose a huge burden for companies,” said Ágnes Dobrossy-Vászolyi, events organizer and deputy chair of the town’s tourism association BTE.

In her experience, in the fewer gatherings that are held, demands are typically aimed at cost reduction, for instance through ordering only moderate catering services. “Competition is very intense,” she added, noting that venues are constantly inclined to offer discounts to their guests rather than risk losing them.

Poised for the upswing

MT on the other hand holds great hopes for rural locations – thus Balaton – to counter the dominance of Budapest on the market. Especially so given the advances made in the region in promoting active tourism and the broad range of gastronomy available to visitors. These and their combination into various packages are where Krisztina Benkő, acting head of MT’s regional marketing division, sees the best opportunities for the area. 

Furthermore, she highlighted the prospects in the air marketing fund (LMA), which allowed MT and Hungarian airport operators to make joint marketing efforts that led to talks starting with 20 airlines. Among the destinations featured on the promo agenda is Sármellék, where the FlyBalaton airport has long been considered a major expected boost to tourism in general in the region.

Benkő likewise stressed that numerous developments were launched in the region in recent years, with new hotels making conference rooms a given in their initial designs. With hospitality businesses having realized the potential in organizing conferences, not only the capacity, but the technologies needed for successful events are also readily available, she added.

Unrealistic expectations

Locally, the situation does not look as promising. For instance, legal changes are set to impact one of the biggest conference customers of Balatonföldvár: the medical profession. The city – for reasons not even Dobrossy-Vászolyi could explain – has become the accepted venue for congresses attended by cardiologists, anesthesiologists, respiratory specialist as well as other practitioners of medicine. However, new regulations affecting the pharmaceutical industry are expected to reduce the number of events, leading the BTE official to see the future as “not bright.”

At the same time, the local tourism group is in the closing stages of hammering out a new strategy, something Dobrossy-Vászolyi declined to discuss until it is completed. She also commended MT for its intense promotion efforts made in the field of conference tourism. Although a campaign launched in April highlights Budapest as opposed to other regional cities, the Balaton area could still benefit from the “trickle-down” effects, she noted.