Land of the “goulash communism”, which combined communism with some elements of a free market, Hungary was very popular for tourism, for visitors from other communist nations from the 60’s -80’s, and as soon as 1977, opened to Hilton Hotels which entered Budapest thanks to a partnership with the state-owned Danubius Hotels Group. In 1993, Accor made a big move by acquiring a majority share in local hotel company Pannonia, allowing the French group to expand largely in the Hungarian capital. But these golden years are far gone... The Hotel Association of Hungary reported that RevPAR was down by 4% in January of this year as opposed to the year before, ranking Hungary 26 out of 28 European countries (only Greece and Malta fared worse). Concerning city RevPAR, Budapest was at the bottom of the list of 41 European cities at 21.44€ compared to a 43.70€ European average. ADR was not immune to the downturn. It went down by 2.5% to 58.93€ for the same period. Despite the fact that Budapest only represents 38% of nation-wide hotel-room supply (in other words, 17,550 rooms), the percentage is not proportional to its weight in terms of revenue because more than half (52%) of the county’s hotel industry revenue comes from Budapest, in other words €220 million. Vice President of the Hotel Association, Gábor Maráczi, tells HTR Magazine: “There really isn’t a single and simple explanation for this performance. Its causes come from a multitude of places including weak city marketing, poor financial resources, and the worldwide financial crisis.” Mr. Maráczi specifies three causes, “1,300 rooms ente- red the market last year, which was 8% of the previous year’s supply. Also, VAT is extremely high here, as opposed to Prague or Vienna. Furthermore, concerning the MICE market, no major conference was held in...