Hungarian hotels in difficulty: many forced to close

Hungarian hotels are in deep trouble as inflation continues to rise. Unaffordable utility prices may force many to close. It is impossible to channel all additional costs to customers — says the Association of Hungarian Hotels and Restaurants (Magyar Szállodák és Éttermek Szövetsége).

Untenable situation

At the investigation of LVH, the MSZÉSZ said that many hotels will temporarily close. The new bills have only just started coming in and some hotels are already struggling with rising utility prices. Temporary closures are to be expected from October or January until April-May.

Even now, most facilities have resorted to dynamic pricing, which means prices can change on a daily basis. As the time between booking and arrival date has been reduced to around 3-7 days in the case of individuals or small businesses, this poses a problem in the case of large conferences or group bookings. For this reason, contracts usually contain a clause that allows hotels to revise prices above given inflation rates.

The main problem is that the approximate cost of bills in winter is still unknown. As a result, many are opting for the winter season and only reopening in the spring, when expenses are expected to be lower due to lower energy and heating costs. The problem is further complicated by inflation because wage increases were needed. Rising costs combined with new salaries are simply too much for many to handle.

Solutions

A hotel at somogy has already closed its doors saying:

“To be open next year, we have to close for now.”

The solutions differ according to the case of each hotel establishment, but the Somogy hotel at least informed the employees well in advance. Most of them had the chance to look for other jobs and the hotel management even helped them to find a temporary solution. Some employees will be transferred to an Austrian hotel for the ski season and after that they will be back for the upcoming period.

According to the management, during the heating season, natural gas alone would cost around 6 million HUF (15,000 EUR). It is also unclear how the prices will fluctuate in the near future. They aim to bring the most out of the situation by keeping the cafe and office open for a hopefully better year.

Read alsoBad news has fallen: a quarter of Hungarian companies plan layoffs

Source: HVG.hu

Laura T. Thrasher