Revenues from tourism could grow by more than 10 percent this year, according to a study by BDO Hungary, the local arm of the world’s fifth biggest consultancy firm.
The figure demonstrates a significant growth, as last year tourism’s direct contribution to the Hungarian GDP was HUF 2.9 billion (EUR 8.7 billion) and HUF 4.5 billion including indirect benefits.
Richárd Németh, senior partner for hotels and real estate at BDO Hungary, told MTI that while a slowdown in Western European growth had a negative impact on foreign arrivals, other factors – such as an over five percent GDP growth in Hungary, coupled with an over 10 percent increase in real wages – more than offset that negative influence.
He said another promising factor for tourism was that from next year VAT on tourism services will be reduced to five percent from the current 18 percent, which could help the sector compensate for the increase in costs such as energy prices, renovations or the purchase of goods.
Németh warned, however, that relative to other sectors of the economy salaries in tourism are lagging behind and in order to retain their workforce companies will have to increase wages by as much as 40 percent in the next two years.
He also said that hotels will eventually also have to do the renovations postponed in the past couple of years and these costs can amount to as much as five percent of annual revenues.
The direct contribution of tourism to Hungary’s GDP currently stands at 6.8 percent.