Hungary is among the European countries that have benefited the most from growth in international travel. Now, with global tourism expected to rise by 7. Yet, our analysis suggests that its tourism industry has significantly more room to grow. Our findings uncovered several opportunities for Budapest to boost its tourism industry. For example, Budapest could do more to promote its value as a tourist destination. Budapest also receives fewer visitors from high potential source markets, like Germany, the United States, and France, than its peers.
Budapest similarly is not yet drawing as many business travelers as do peer cities, partly because it has just one large-scale modern conference venue and does not have hotels with capacity over rooms. Moreover, Budapest offers the lowest number of hotel rooms compared to peers and most of these fall into the economy or mid-scale categories. According to announced capacity, more upscale hotels will be opening over the next few years, affording Budapest an opportunity to draw more premium and luxury travelers, who represent a growing segment of the global tourism market.
Oxford Economics estimates that the number of outbound travelers globally will rise from million in to 1. This trend is likely to impact Budapest, where international visitors represented 83 percent of visitor nights in commercial accommodations in Our conservative scenario assumes that Budapest can match global growth forecasts and increase tourism by 7 percent annually to Budapest would need to put substantial work and investment into its tourism industry to even maintain its market share.
A most concerted effort to increase market share could enable the city to expand the tourism sector by nearly 12 percent per year between and One way that Budapest might pursue the more ambitious scenario is by aiming to increase visitors from selected high-potential markets, such as the US, Germany, and France. It might also tap deeper into source markets where it already excels, like South Korea or China.
And although the potential growth rate of 12 percent may seem high, it is in line with the plus-percent growth rates that over 50 cities globally achieved in seven-year periods between and , including some of the selected peers such as Barcelona and Berlin. According to the two scenarios, growth in the tourism industry might create 23, to 49, new jobs. Together, these results could have spillover effects across Hungary, such as by increasing tourism and generating jobs in surrounding regions Exhibit 3.
