Hungary's tourism sector may grow at an annual rate of more than 10% until 2020, unless the currently favourable economic conditions change for the worse in Europe or new conflicts develop in other regions, according to István Hülvely, chief executive of domestic hotel chain Hunguest Hotels and member of the management in the Hungarian Association of Hotels and Restaurants (MSZÉSZ).

Local demand in the hotel sector started to increase significantly in 2014 and the outlook for this year is also promising with favourable preliminary bookings, also for events and conferences, Hülvely told turizmus.com in an interview. He said foreign inbound tourism has been expanding mostly in Budapest, while the number of domestic visitors is rising primarily in the countryside.

But the average profitability of local hotels and accommodation providers didn't keep up with the recent increase of revenues, he said. Hülvely said growth can be only maintained with a reduction of value added tax levied on accommodation services. He added that the overall quality of services must be improved, but many industry players can't afford developments.

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