Economic challenges in Hungarian tourism and hospitality

The Hungarian tourism, hospitality, and entertainment sectors are experiencing significant economic strain driven by rising operational costs and tax burdens.

A survey by the Hungarian Tourism Agency (MTÜ) identified high taxes, excessive administration, and energy costs as primary challenges for providers, with micro-enterprises making up 90 percent of respondents. Specific pressures include administrative burdens for private accommodations and high taxes for the catering sector. In response, the Hungarian Apartment Lenders Association has called for a one-year extension of the moratorium on short-term apartment rentals in Budapest.

Broadening the scope of economic difficulty, cultural institutions and music clubs, such as A38, the Budapest Music Center, and Fonó Budai Zeneház, are struggling with increased performer fees, utility costs, and a 27 percent tax on cultural event tickets. The restaurant industry is also facing a slowdown characterized by a 10 to 20 percent decrease in foot traffic and rising costs for labor, energy, and ingredients. Analysts suggest that limited consumer purchasing power relative to the European lower-middle class is further constraining spending.

Recent data highlights a significant decline in the hospitality sector despite high tourism numbers. According to the ‘Lángos-csapda’ study by Raconteur Agency, the number of catering establishments in Hungary fell by 5.8 percent between 2021 and 2024, decreasing from 27,979 to 26,370. This represents the largest decline among 27 EU member states, contrasting with an EU median increase of 3.6 percent. In Budapest, the number of restaurants and buffets dropped by 25 percent between 2013 and 2024.