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Gov't support for state tourism-agency drops 20% as result of stability-fund freeze

Hungary's state tourism-agency Magyar Turizmus will receive HUF 5.2 billion in government support in 2011, 20% less than originally expected as a result of the freeze of a HUF 250 billion stability fund established earlier this year to neutralize central-budgetary risks, the business daily Vilaggazdasag reported on Monday, citing Magyar Turizmus CEO Gergely Horvath.

Horvath said that Magyar Turizmus would increase spending on marketing activities by 50% to HUF 4 billion in 2011 despite the reduction in the previously specified amount of government funding, noting that the organization had originally planned to double its marketing spending this year.

Horvath said that Magyar Turizmus would compensate for the HUF 1.3 billion decrease in government support through a reduction in 2011 spending on promotion of foreign tourism from HUF 1.5 billion to just a few hundred million forints.

The Magyar Turizmus CEO added that the organization would finance its planned increase in spending on marketing partially through a projected cut in operating expenses from HUF 2.8 billion in 2010 to HUF 2.4 billion this year and HUF 2 billion next year.

Horvath said that Magyar Turizmus also aims to increase the percentage of the agency's budget derived from market sources from the current mark of 10%.