NATIONAL TOURISM MARKETING PLAN FOR 2008

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1 1 Hungarian National Tourist Office 1054 Budapest, Hold utca 1. Tel.: (+36-1) Fax: (+36-1) Budapest, November 27, 2007 NATIONAL TOURISM MARKETING PLAN FOR 2008 At its meeting on November 20, 2007, the Board of Directors of the Hungarian National Tourist Office adopted the HNTO s 2008 marketing plan, which also incorporates the observations of trade organizations, travel trade enterprises, local governments, Regional Tourism Committees and development boards BUDGET With the budget expected for 2008 surpassing HUF 5 billion, the Hungarian National Tourist Office can operate on a higher budget than in HUF 3.4 billion in government subsidies and HUF 500 million earmarked subsidies are projected to be available for the implementation of the HNTO s marketing plan. Moreover, the HNTO has budgeted HUF 500 million worth of income from its own activities, which it also wishes to spend on marketing. In sum, HUF 4.4 billion of funds will be available for marketing purposes. (HUF 2995 million are allocated to marketing activities abroad, whilst domestic marketing tasks rely on an allocation of HUF 1405 million.) Driving down the marketing costs of the HNTO through the involvement of sponsors and the providers of tourism services is a tool, which (in addition to increasing revenues) is a form of fund raising that ranks at par with generating revenues. GOALS Boosting the number of guest and guest nights and income from tourism have remained the highest priorities of the national organization of marketing tourism. Contributing to the improvement of the quality of life is another priority in accordance with the principles laid down in the National Tourism Development Strategy. Incoming tourism Strengthening the positive image of the country in tourism; Strengthening our market positions in relation to our competitors; Winning new market segments; Repositioning the Lake Balaton and marketing its services effectively; Promoting the launch of new scheduled flights; Exploiting the opportunities presented by major events attracting international presence; Raising the number of foreign guests so that commercial accommodations register at least 10.2 million guest nights. Domestic tourism Further promoting the prestige of domestic travel; Motivating the use of holiday checks for tourism purposes; Increasing intra-week guest flows at accommodations outside Budapest; Raising the number of domestic guests so as to reach at least 10 million guest nights at commercial accommodations.

2 2 THE STRATEGIC DIRECTIONS OF MARKETING IN 2008 The Hungarian National Tourist Office will introduce new, uniform marketing communication starting in Internationally oriented marketing will stay focussed first of all on top priority tourist products, including Budapest and its surroundings, Lake Balaton, health tourism, MICE and Pécs European Capital of Culture in 2010 although the emphasis and positioning will vary from market to market. To help the launch of several flights to Hungarian airports (in the regions of Budapest, Balaton and Debrecen) in 2008 in cooperation with service providers, local governments, airports and airline companies), the Hungarian National Tourist Office will continue its coordination role of the Air Marketing Fund, an arrangement it had initiated itself. Domestic marketing communication will be centred on The Year of Waters as a main theme in 2008, including the promotion of Hungary s unique health tourism offer during spring and autumn and the opportunities represented by Hungarian live waters in the summer. Close cooperation with the trade and strategic partners will remain a key principle to guide the work of the Hungarian National Tourist Office in The marketing organisation intends to maintain its emphasis on its role of a service partner to the travel trade. Service providers and strategic partners will continue to find countless opportunities for joining the marketing actions of the HNTO in The strategic partners of the HNTO include: Peer ministries and their background institutions, Businesses of Hungarian representations operating in foreign countries, National trade organizations, associations, chambers, Regional Tourism Committees, Tourism organizations of local governments, the Tourinform network, Airline companies and airports, Key hotel companies, Media. The marketing organisation looks upon shaping the mindset of society to strengthen visitorfriendly attitudes. Accordingly, its communication will seek to sharpen the awareness of Hungarian citizens and service providers of the importance of hospitality. Active participation in contests organised for the travel trade, such as Visitor-friendly Hungary and the Hungarian Tourism Quality Award or, indeed, in movements such as For Floral Hungary or Clean Up Hungary are the excellent but yet insufficient tools mobilised for the purpose. In addition to the aforementioned well-known forms, the HNTO is planning to implement new awareness shaping campaigns. Complex campaigns: Its objectives force the HNTO to concentrate its assets and resources on organising integrated campaigns rather than on fragmented actions. To help smooth out guest turnover rates, the marketing office will give high priority to organising actions designed to boost intraweek guest flows at accommodations in Hungary throughout the year. (Nationwide 3=4 actions each month for accommodation booked in the period from Monday to Thursday.)

3 3 PRIORITY TOURISM PRODUCTS The HNTO will focus its communications on a product portfolio that represents the country at the highest level of quality, keeps aligning to demand, matches current trends and is positioned alternatively in different markets. Most of the resources of the HNTO will also be concentrated on marketing these priority products. Priority products abroad: Budapest and surrounding area, where half of the foreign guest nights are realized. This can be communicated to the city break segment in all of our key markets throughout the year. Promotion is always associated with actions (such as BWI) or major programs and events. Lake Balaton including in particular the flights to Fly Balaton airport. Targeting new market segments, positioning Lake Balaton as a year-round destination by presenting wellness, medical, cultural, wine and gastronomy services. Health tourism both as spa and wellness services and as cultural heritage. Wellness may be promoted first of all in the neighbouring countries, whilst spa holidays can be targeted first of all at Germany and Austria. MICE a dominant segment that generates the highest specific spending. The HNTO will expand the coverage of its domestic Year of Waters campaign to markets where spa, wellness and lakeside tourism are also in demand. Pécs 2010, European Capital of Culture Engaging in introductory communication in cooperation with EKF Management Centre, focusing on neighbouring countries and Germany. Domestic products: Year of Waters: health tourism and lakeside holidays Event tourism Holiday checks MARKETING COMMUNICATION TOOLS In 2008, the key tools of the Hungarian National Tourist Office will include complex campaigns (Year of Waters, Budapest, Lake Balaton), e-marketing, commercials, cooperating with the press, service provider and other publications, exhibitions and study tours. The HNTO keeps testing the efficiency of the promotional tools used in marketing communications. The Office uses its communication tools in line with the following power ranking derived from earlier efficiency measurement findings and trends observed in Hungary and internationally (the ranking may differ across products and target groups): E-marketing, Advertisements, commercials, PR, study tours for journalists, Publications, Exhibitions, presentations, road-shows, Travel trade events, study tours. In 2008, the HNTO will yet again supplement its traditional arsenal of printed and electronic media with advertising outdoors. Traditional media (TV, radio, cinema, printed press, outdoor advertisements and publications) and new media (online, mobile communications and guerrilla marketing) complement each other effectively in covering the relevant target groups of integrated marketing campaigns.

4 4 Research and experience have prompted the HNTO to pay special attention to one of the most popular marketing communication tools known as e-marketing and the office is lending a uniform character to all of its websites (the HNTO operates websites in 24 languages in 30 counties globally in addition to the national tourism portal). The Office also supports promoting domestic tourist attractions and services through a revised web-based database of tourism and updated content. The HNTO intends to keep public attention focussed continuously by its year-round billboard campaign, focussed appearances and active presence in a variety of media. The national marketing organisation will also adopt a new, modernised image at travel trade fairs. New attractions will make the presentation of Hungary more spectacular. Nevertheless, the HNTO intends to have travel trade professionals zoom in on its highly efficient road shows and workshops. Organising thematic study tours for journalists will play a key role in HNTO s relations with foreign press circles, whilst the domestic press relations of the HNTO will pivot mostly around press conferences, media discussions and annual cooperation arrangements with the media. Special attention will be given to cooperating with foreign journalists accredited to Hungary. The HNTO seeks to help promote Hungary s tourist offering by a smaller scale of more efficient publications and their web-based versions. The Best of publications of the regions, which will be targeted at foreign audiences, will also carry specific offers by the providers of services. Inside Hungary, booklets and leaflets also featuring offers will be distributed as supplements to daily papers and magazines. The Office will use the electronic media to cooperate with the major channels of outreach to the largest number of potential travellers. The plans also envisage shooting new tourist films. Travel trade events. The HNTO will organise a workshop of incoming tourism to take place during the Travel Exhibition again. Targeted at the MICE segment, the Business Travel Show will be organised for the sixth time with the HNTO providing professional support. The series of events called Foreign representations in the regions will also continue. We have been awarded the right to organise congresses for several foreign trade associations, and bringing them to Hungary will definitely have a beneficial long term effect on incoming tourism in this country. (the annual congress of Deutsche Travel Verband (DRV), the annual meeting of the association of Flemish travel agents (WR), the annual trade conference of ACAV - Asociación Catalana de Agencias de Viajes). FOCAL POINTS OF FOREIGN MARKETING COMMUNICATION The Hungarian National Tourist Office developed a new foreign markets strategy in Its foreign marketing communications will be targeted first of all at end users and will focus on key source markets, priority products and target groups. HNTO s foreign marketing communications will contain uniform elements to represent Hungary s brand in tourism and will also incorporate unique, source specific features. Different marketing tools lend themselves to efficient use in different phases of the travel decision and are convincing for different target groups. The national organisation of marketing tourism will rely on the full arsenal of marketing communication tools to achieve the aforementioned goals. Of the tools it has used so far, the HNTO will give priority to advertising targeted at end-users, which is costly but indispensable, and to cost-efficient e-marketing. The Office will also engage in international campaigns of comprehensive outreach, but will also rely on the creativity and local market know-how of its foreign representations in its use of the shocking, unusual and innovative means of niche and guerrilla marketing.

5 5 Major source markets Most promising source markets: Germany United Kingdom Austria Italy USA North of Europe (Denmark and Sweden) France Czech Republic, Slovakia Poland Romania Russia The 22 foreign representations of the HNTO are responsible for active marketing in international markets with support and coordination from the head office. Priority campaigns and themes: Budapest Winter Invasion (BWI) Campaign: Extended to March 31, 2008, the Budapest Winter Invasion Campaign seeks to boost incoming tourism in Budapest during the winter and spring seasons, to promote Budapest as a city break destination and to increase length of stay. In essence, the campaign offers guests the option to stay 4 nights for the price of 3 in participating Budapest hotels. The second BWI campaign is implemented with over 70 cooperating partners. Further international promotion campaigns of Budapest (spring/early autumn) Campaigns conducted in cooperation among others with the Municipality of Budapest, Budapest Airport, Tourism Office of Budapest, the Museum of Fine Arts and Budapest Spring Festival. International media campaign to promote Lake Balaton Spring campaign conducted with partners in Germany, the Czech Republic, Slovakia, Russia and Poland. Extending the scope of the Year of Waters campaign to foreign countries The scope will be extended to source markets showing demand for health tourism and/or lakeside holidays. Introductory campaign of the Pécs, European Capital of Culture 2010 program Year of the Renaissance, 2008 Cooperation with a working group of the Ministry of Education in international communication. Cooperatation with the organisers of major events of international importance Budapest Spring Festival, Island Festival, Jewish Summer Festival, Formula-1, major exhibitions of the Museum of Fine Arts, Balaton Sound, certain shows of Palace of Arts, Budapest Autumn Festival, International Festival of Wine and Sparkling Wine, Budapest Christmas Fair and events. An increasing number of quality cultural and gastronomic events held outside Budapest claim international attention (e.g. Baja, Békéscsaba, Kapolcs, Szeged, Szolnok, Tokaj, Debrecen, Miskolc). Air Marketing Fund Help launch new flights to Hungarian airport destinations (Budapest, Balaton and Debrecen regions) in cooperation with service providers, local governments, airports and airlines.

6 6 FOCAL POINTS OF DOMESTIC MARKETING COMMUNICATION Annual campaigns with a product theme are easier forms of motivating the domestic public, as exemplified clearly by the campaign years Grand Tour of Flavours 2006 and Green Tourism The Year of Waters will feature as the central theme of domestic marketing communication in As part of this full year complex campaign with regional focus, the HNTO will give priority to promoting Hungary s unique health tourism offer during the spring and the autumn and will focus on presenting the opportunities offered by the country s live waters in the summer. Actions designed to boost intraweek guest flows at accommodation establishments by offering 4 nights for 3 will feature high on the agenda of the campaign. The marketing organisation attaches great importance to promoting events tourism, which is why most of the news distributed by the HNTO will among others be concerned with Open Cellar Days, the Year of the Renaissance, the Week of Hungarian National Parks, the LEADER- Day of Rural Tourism and Surfeit Thursday. In addition to promoting events in Budapest in 2008, the HNTO will continue to help increase the attractiveness of events held in all of the tourist regions of Hungary in the tourism supplement of Itthon otthon van, in its publications, at its exhibitions, at its websites and with other tools. Enlarging the scope of utilisation of the holiday check presents an opportunity to the travel trade, which is why the HNTO intends to emphasise the organisation of campaigns and actions designed to motivate people to cash their checks for travel purposes and at commercial accommodations. Further information: Hungarian National Tourist Office Marketing and Network Directorate Phone: (+36 1) Fax: (+36 1) Internet:

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