Travel Reference
In-Depth Information
has developed stronger links in the field of mar-
keting with the other members of the Visegrád
Group: the Czech Republic, Slovakia and
Poland. Experiences show that both intra-
European and overseas tourists tend to see the
Visegrád countries as one region (e.g. 'East-
Central Europe'), such that, although all partici-
pants joined the EU in 2004, further tourism
cooperation within the region is both a necessity
and an opportunity. The lessons learnt from the
Visegrád project may also help Hungary to
become fully integrated into the enlarged EU's
international tourism activities.
Obviously, in addition to being potential
partners in regional tourism marketing, all Cen-
tral and Eastern European countries are also
Hungary's competitors in the European market.
Throughout the region, one of the greatest chal-
lenges of EU accession is to meet the increased
standards and expectations of European cus-
tomers and to provide the same service quality
that they are accustomed to in any other EU
destination. Although the quality and the range
of the Hungarian tourism supply have impro-
ved significantly in the past decade, the coun-
try's high 25% VAT rates levied on hotel and
catering services may potentially prove a com-
petitive disadvantage (HHA-KPMG, 2004).
Since VAT rates are generally more favourable
elsewhere within the EU (e.g. the Czech Repub-
lic boasts a 5% VAT rate on tourism, as does
France at 5.5% and Spain at 7%, and even
neighbouring Slovakia's 19% is lower), Hungary
as a holiday destination may compare less posi-
tively among price-conscious leisure tourists.
This therefore suggests a future strategy empha-
sizing higher quality, higher yielding tourism
experiences.
Vienna and Prague have long been tradi-
tional competitors of the Hungarian capital,
Budapest, and although they remain so follow-
ing EU enlargement, the integration process has
opened up further cooperation opportunities as
well. With Vienna being the most successful of
the three Central European capital cities, in
international tourism Prague has been more
popular than Budapest over the past decade.
Although, in the short term, EU enlargement
does not seem to threaten Prague's position as
the leading CEE heritage city, Budapest has the
geographical advantage of being closer to
Vienna and Bratislava. Following Hungary's
and Slovakia's EU accession, visits to the three
cities may easily be combined, which, in the
medium term, may put geographically more
separated Prague in a less competitive position.
Cooperation between the national tourist offices
of the Czech Republic, Austria and Hungary is
aimed especially at the US and Japanese mar-
kets, particularly promoting the three capitals to
likely visitors to Europe.
A significant future impact of EU accession
is the introduction of the single European cur-
rency. To join the EMU, the country must meet
the Maastricht convergence criteria in terms of
price stability, long-term interest rate, budget
deficit, government debt and exchange-rate
stability. The past few years' economic policy
has been characterized by considerable budget
and current account deficits, rising inflation and
exchange rate volatility. In the country's 2004
convergence programme, the target date for
adopting the euro was set at 2010. Although
this target seems to be relatively late after the
country's EU accession, the euro is in fact already
penetrating the Hungarian private sector. The
country's service industry, particularly the hos-
pitality sector, is taking its own steps towards
euro integration, with many restaurants and
retailers in tourist destinations accepting pay-
ment in euros. Hungarian tourists, on the other
hand, seem to be relatively unaffected by the
single currency: as the results of a recent survey
suggested, adoption of the euro in member
states does not seem to have influenced signifi-
cantly the travel behaviour of Hungarian tour-
ists, although there is a significant awareness
as well as a favourable perception of the lower
transaction costs brought about by the euro
(Rátz and Hinek, 2005).
The Development of Spa Tourism in
Hungary - a Past and Future Niche
Hungary as a tourist destination has been look-
ing for a long time for a special product that can
make the country appealing to its predomi-
nantly European visitors. Based on its rich
resources, health tourism seemed to be a logical
alternative, since health consciousness, more
healthy living and use of natural healing resources
are becoming more prevalent. Health tourism
