I.) Sectoral overview, the overall situation of tourism in the year 2013

I.1.) International and European trends

Europe still has the greatest share in international tourism, but the continent’s share in the journeys of the source markets outside their own region is declining.

In the first nine months of 2013, the occupancy of the European hotels participating in the survey slighty increased by 2.2% compared to the same period of the previous year. The financial indicators were mixed: the average price calculated in Euro decreased by 1.5% and the RevPAR increased by just 0.6%.

The UNWTO predicts that, in 2013, the growth in the number of international tourist arrivals could be higher than 3-4%, which was estimated in the beginning of the year. In case of Europe, the experts of UNWTO expect an increase of 2-3%.  

According to the forecast concerning the time period until 2030, international tourism continues to grow at a slightly slower rate: the number of international tourist arrivals will increase by an annual average of 3.3%. Trips outside Europe are also becoming more popular among European travellers (whereas 86.7% of guest nights in commercial accommodation in Hungary originates from Europe). The UNWTO predicts that Europe’s share in international turism will be reduced to 40% by 2030.   

In the following 20 years, a significant proportion of international tourist arrivals will come from the countries of Asia and the Pacific region where the number of outbound trips is growing by 5.0% (17 million) every year.

The WTTC forecasts that tourism industry continues to increase by 3.2% in 2013, at a slightly faster rate than the entire world economy. This sector creates 4.4 million new jobs this year. However, according to the forecast of the WTTC, the growth rate of Europe lags behind the developing regions: only 0.8% GDP growth is expected from tourism in 2013.  

The Tourism Economics, invited by the ETC, predicts that the number of international tourist arrivals to Europe will rise by 3.7% in 2013. Especially Western and Northern European destinations can expect weaker results, while a growth of 7.9% is likely to be realised in Central and Eastern Europe in 2013. The research institute expects an increase of 4.4% in the group of Central European and Baltic countries, which are the most direct competitors.

I.2.) Trends in Hungary

Hungary as a tourist destination hasn’t got a unified image yet. According to our experience, there is a great difference in the judgement of Hungary as a tourist destination. Those who have already visited Hungary have a significantly more positive opinion than those who haven’t visited the country yet. This shows how important branding and information before travelling are.

Unlike foreign (potential) tourists, Hungarians are certainly better informed about Hungary as a tourist destination. The general opinion on Hungary is favourable, the personal connection, however, is not strong enough. The prestige of foreign countries is still greater, which comes partly from deficiencies in knowledge and partly from attitudes.

The fact, that many people are aware of Hungary’s touristic potentials but they have less knowledge about services, accommodation or promotions, refers to the need for giving continuous information in addition to shaping attitude.

The results of Hungarian tourism – based on the number of registered guests at domestic commercial accommodation establishments and guest nights – first exceeded the results of the pre-crisis year 2007 in 2011, and additional growth occurred in 2012. Last year, the room revenues at current price levels also exceeded the result of 2007 by 8.4%, and accommodation capacities also increased at a same pace. 

The foreign exchange turnover of tourism

According to the balance of payments data in the first half year of 2013, published by the Hungarian National Bank (MNB), in Euro terms, the foreign tourists who visited Hungary spent 5.7% more (1,746 million Euro) on Hungarian touristic services, whereas the foreign currency expenditures of Hungarians who visited foreign countries decreased by 7.4% (630 million Euro). Therefore, the balance of revenues and expenditures (1,116 million Euro) rose by 14.8% compared to the first half of 2012.

The turnover of commercial accommodation

According to the preliminary data of the Central Statistical Office (KSH), between January and September 2013, the number of guests using commercial accommodation increased by 5.3%, and the guest nights generated by them grew by 4.4% compared to the same period of the previous year.   6.9 million guests spent 18.2 million guest nights at commercial accommodation sites.  

The gross room revenue of commercial accommodation rose at a slightly higher rate as tourist traffic, by 10.2% in the first 9 months of the year. 88.6% of the room revenues was generated in hotels. The price index of accommodation service and catering calculated for the period between January and September is 3.2% higher than a year earlier. Within this, there was a 0.5% price growth in the area of accommodation service.

Between January – September 2013, the room occupancy rate of hotels was 50.7% and in thermal hotels it was 63.6%. Like in case of commercial accommodation, the tourist traffic of hotels, which register 74.5% of the guest nights, developed positively: the number of guests increased by 6.0% and the number of guest nights grew by 5.4% compared to January-September 2012.

On the basis of the STR Global European Hotel Review’s data, 72 hotels participated in the survey of September 2013 in Hungary. Occupancy, average rate and RevPAR rose in the same way in these hotels in the first nine months of 2013 and the indicators showing the growth developed more favourably than the Eastern Europan average.  

Changes in domestic tourism in Hungary

According to the preliminary data of the Central Statistical Office (KSH), in the first 9 months of 2013, the number of domestic guests increased by 4.7% (3.5 million people) and the number of guest nights grew by 3.4% (8.7 million nights) in commercial accommodation compared to the period of January-September last year. The revenue of accommodation prices from domestic guests rose by 9.0% in commercial accommodation and by 10.5% in hotels. The number of domestic guests increased by 6.8% and the number of guest nights by 5.6% in hotels.

In January-September, Széchenyi Card holders paid by these means of payment in the amount of 11,786 million HUF in commercial accommodation units, which was equivalent to 25.2% of the domestic accommodation revenues.  

On the basis of the data of the Ministry of National Economy, the three card-issuing companies made 50,435 contracts with accommodation establishments that accept these cards until 30^th September 2013. The amount of money paid by SZÉP card was 53.1 billion HUF between January and September 2013.

The characteristics and development of inbound tourism

In the first half of 2013, the number of foreign visitors grew by 2.0% compared to the same period of the previous year mainly due to tourism: the number of visitors coming for tourist purposes rose by 5.2%, within which the growth in the number of one-day visitors was 5.2% and in the number of several-day visitors was 6.5%. The number of visitors participating in leisure tourism increased by 7.2% and the number of business tourism participants decreased by 4.2% compared to the data of the first half of 2012.  In the same period, foreign tourists’ expenditure on tourism went up by 9.6%, within which revenues from leisure tourism grew by 7.9%.  

According to the preliminary figures of the Central Statistical Office (KSH), in the first nine months of 2013, more than 3.4 million foreign guests and more than 9.5 million foreign guest nights were registered in commercial accommodation units. The number of foreign guests went up by 5.9%, and the number of foreign guest nights by 5.2% compared to the same period of the previous year.  The revenue of accommodation prices deriving from foreign tourists grew by 10.8% in commercial accommodation and by 10.9% in hotels. In the latter category, the number of foreign guests was 5.4% higher and guest nights were 5.2% higher than in the first nine months of 2012.   

(Source: Hungarian Tourism Ltd. - Magyar Turizmus Zrt. – Marketing plan 2014 – Strategy)

I.3.) Health tourism trends

The most typical trend is increase in the proportion of the elderly population in developed countries, which are our largest source markets.  Seniors, who are increasingly health-concious and more and more experienced in the field of travel, generate a growing solvent demand in the health tourism industry.  According to the WHO’s prediction, tourism and health industry together will become one of the dominant economic sectors of the world.

Based on national traditions and potentiality, health tourism can be considered as the flagship of Hungarian tourism.

In 2013, Hungarian health tourism got new opportunities by the liberalization of health services among the member states of the European Union. As a result, patients can claim the same refund of costs from their health insurance company in any EU country as they would pay at home for the particular treatment.   

The coming into force of the directive didn’t make its influence felt in the short term, however, it is expected that it will generate the fastest demand growth in the field of dentistry and spa services.

Healht tourism is a rising market in Europe and the demand for foreign medical treatments has increased. 18% of the world’s population would seriously consider to take medical and dental treatments in another country if they should pay less for the services than at home. A further 36% of the population is likely to go to another country and have medical treatments as a health tourist.   

Therefore, the majority of people (54%) shows an inclination towards health tourism. According to international public opinion polls, cheaper treatments abroad are particularly attractive to Russians and the Poles.  

Hungary became the number one destination in the field of dental tourism in Europe by 2008. In 2012, foreigners, who came to Hungary to have dental treatments, spent 65-70 billion HUF on treatments, and, additionally, dental tourism generated 13-16 billion HUF in domestic hotels. A further increase in turnover is expected due to the liberalization of services in the EU.  

Changing demand in health tourism

The main trends of modern health tourism are the appreciation of the aspects of health, the growing importance of innovatively renewed treatments, the decisive role of design, the transformation of consumer habits in the way that treatments are used regularly as part of life style.   

Moreover, complexity can be emphasised, which means that a number of factors are used to achieve a healthier life, and, on the one hand, these together can bring result (and there is a demand for all of them), on the other hand, more services together will result in commercially successful operation. The majority of profit comes from treatments. Treatments also become more complex, therefore additional treatments are associated even with a simple massage and these treatments are sold in packages and they are also branded.

This is due to the trend, according to which treatments are taken regularly in the place of residence too: patients are no longer expect treatments to be exotic and pampering, but they are supposed to have real, long-term effects. Thus, the importance and share of treatments and cures that are medically established and evidence-based are increasing.

Although the role of medicinal water has decreased internationally, referring to the fact that traditions have always been significant parts of tourism marketing.  For this very reason, Hungary’s richness in medicinal waters is still an important competitive advantage, however, instead of quantity, the quality of waters and their medically proved impact should be prioritised.  

The development of health tourism should be based on the above listed world trends. On the one hand, it means the more complex and profitable development of spa towns and baths, on the other hand it also requires professional and modern marketing acitivities. In addition, product development, nationally reinterpreted in size and form, would be another important step.

Today, the largest profit is generated definitely in the circle of treatments in the world.  This world trend will clearly be applicable to our country as well, this can lead to the growth of domestic health tourism income. However, we must be aware of the relation between treatments and spa brands. It is a typical tendency that both the day-spas and the spa departments of hotels use more and more increasingly the branded products of worldwide companies. If a significant, successful product development of this kind does not occur in Hungary, an important part of the expected growth will go to the foreign brand owners’ pocket and in spite of the revenue increase of the sector, its domestic profitability will not improve. That is why it is a primary strategic issue whether we succeed in developing such complex products and brands, to which the mud and medicinal water of Hévíz can provide ideal raw material.

(Source: http://www.piacesprofit.hu, http://www.turizmusonline.hu)

II.) The position and competitiveness of tourism in Hévíz

II.1.) Positioning products and services, defining target groups

The business plan of the year 2011 has a detailed information about determining the target groups based on the study “Development strategy and operational programs of Hévíz Tourism Destination” made in 2010. The table chart above summarizes the 3 main products and the related target groups. Since they were defined for medium term, these target groups didn’t change in the year 2014. However, the Nordic and Baltic region was included in the source markets with reference to the new air connections.