At a press conference in Budapest on Wednesday, Government Commissioner for Tourism Gusztáv Bienerth announced that next year the Government will spend HUF 21 billion – more than ever – on development of the sector, through the budget for tourism and the newly-established budget for tourism development.

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He said that in 2016 the tourism budget was HUF 6 billion; this will be almost doubled, to HUF 11 billion. This will be supplemented by the newly-established budget for tourism development, which will amount to HUF 10 billion. This will be national funding supplementing the EU grant assistance, he added. In the longer term, funds available for development will also be increased by a tourism development contribution of 4 per cent, to be introduced from 2018.

The funds will cover improving the quality of accommodation, domestic and international marketing, and support for events; thus, he said, the entire sector can “take a step forward”. He stressed that the Government’s aim is for tourism to perform better than ever in economic growth and in creating jobs, so that Hungary and Budapest should be Central Europe’s tourist centre: “to conquer Prague and besiege Vienna”.

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He confirmed that by 15 August there will be a review of the sector’s entire legislative environment, which will include elimination of the regulations hindering access to the market.

Mr. Bienerth stated that the SZÉP Card scheme will be retained. By the end of the year a comprehensive tourism development strategy will be created, providing the basis – starting from 2017 – for the Hungarian Tourism Agency (MTÜ) to coordinate the development of several target areas in the country – in addition to the entire sector, the capital and Lake Balaton.

As Mr. Bienerth pointed out, next year tourism’s competitive capacity will also be increased by a reduction in VAT on restaurant services, from 27 per cent to 18 per cent; entrepreneurs will be able to spend the tax savings on development and wages. From January 2018 the VAT rate will be 5 per cent, which is extremely low even by international standards.

In terms of international competitiveness, there are many more opportunities for Hungarian tourism than have been exploited so far; the country must make up for this deficit. As an example, he mentioned that even though United Nations World Tourism Organisation (UNTWO) data shows that Hungary stands six places above the Czech Republic in terms of the number of international tourist arrivals (14.3 million versus 11.1 million), the Czech Republic still precedes Hungary by four places in terms of tourist spending(USD 6 billion versus UDS 5.3 billion). In other words, the Czech Republic is able to generate more revenue from fewer tourists. According to Mr. Bienerth this situation could be reversed within 2 to 3 years.

{Source: Government of Hungary/Ministry of National Development-Media Relations}

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