Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HU-2020-48/1571 – Updated – measures in Hungary
|Country||Hungary , applies nationwide|
|Time period||Temporary, 26 November 2020 – 08 February 2021|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Nóra Krokovay (KOPINT-Tárki) and Eurofound|
|Measure added||07 December 2020 (updated 08 June 2022)|
Under government decree 485/2020 published on 10 November 2020, business dealing in activities related to the provision of accommodation are offered a reimbursement of 80% of net losses on cancelled bookings due to the COVID-19 pandemic. Only businesses and their bookings registered with the national Tourism Data Supply Centre and made before 8 November 2020 (but pertaining to stays before 11 December) are eligible.
In addition, under the European Commission’s Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (2020/C 91 I/01), businesses are also eligible for aid to cover their expenses as “temporary limited amounts of aid to undertakings that find themselves facing a sudden shortage or even unavailability of liquidity” (Section 3.1) or, “Member States may envisage contributing to the uncovered fixed costs of those undertakings for which the COVID-19 outbreak resulted in the suspension or reduction of their business activity.” (Section 3.12).
The measure applies to the following economic activities:
For this type of subsidy the businesses eligible are:
The overall aid should not exceed €3 million per undertaking.
In a third type of subsidy, temporary aid is granted to those businesses that were not eligible for the other types of subsidy.
Decisions on the above two types of aid can be made until 30 June 2021.
A survey by the MKIK economic research institute found that the proportion of businesses with no financial reserves is especially high in catering (71%) and accommodation services (62%). It is estimated that out of an average of 400,000 people employed in tourism, some 150,000 have already left the sector due to COVID-19.
A government official estimated that 928,000 guest nights in a value of HUF 15 billion (€41.7 million) could be involved in the reimbursement programme. The bookings were made at 11,000 hotels, which is about one-third of all registered in the official system, so this is how many hotels could be getting the compensation. Many hotels, especially in Budapest, chose not to apply for the support, as they do not want to agree to a ban on laying off staff . Tourists spent 115,000 nights at hotels in January 2021, down 86% as compared to the same period in the previous year, with revenues falling by HUF 31 billion (€86 million) or 91% to HUF 3.2 billion, according to central statistical office data.
According to the central statistical office, the tourism sector’s contribution to GDP fell from 6.4% in 2019 to 5.1% in 2020. The number of employees in the accommodation and catering sub-sector fell by 8% from 2019 to 2020. Working with a wider range of data for tourism, data from the World Travel and Tourism Council showed that the total contribution of travel and tourism to GDP fell from 7.8% in 2019 to 3.8% in 2020. International visitor spending fell by 64.1% and domestic tourist spending by 47.1% in the same period.
Employees in standard employment
Sector specific set of companies
||Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
The employers’ organisation Association of Hungarian Hotels and Restaurants (MSZÉSZ) was involved in talks with the government on the measures, but the nature of their involvement is unknown. MSZÉSZ chairman Csaba Baldauf said that the tourism contribution waiver for 2021 was the Association's initiative and it was successful.
An MSZÉSZ official said owners of small and medium-sized hotels are likely to be left without any savings by the end of 2020. The industry agrees that the wage subsidies, case Wage support for job creation/workforce support programme for companies (2021) , extended until January may be more helpful to the sector.
In early 2022 MSZÉSZ chairman Csaba Baldauf said that it was the association's merit at its initiative, the tourism contribution was waivered for 2021, however he expressed concern that the [Employee bonus scheme SZÉP card limit rise] (static.eurofound.europa.eu/covid19db/cases/HU-2020-17_1266) will take away revenue from the already ailing tourism sector.
In January 2022 General Secretary of the National Association of Entrepreneurs and Employers (VOSZ) László Perlusz said that the tourism sector is faced with a big labour shortage after many people left the sector during the COVID-19 lockdowns. About 25% of businesses are thinking about hiring a foreign national, he said. Other options are drawing people from poor regions into the sector or keeping workers on beyond retirement.
|Economic area||Sector (NACE level 2)|
|I - Accommodation And Food Service Activities||I55 Accommodation|
This case is not occupation-specific.
Eurofound (2020), Provisions relating to accommodation services, measure HU-2020-48/1571 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2020-48_1571.html
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