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talent for entertaining Tourism in Hungary 2004 www.hungary.com Talent for entertaining HUNGARY

To the Reader The Hungarian administration of tourism and representatives of the industry welcome your interest in our traditional publication of the most recent statistics of tourism. We have been publishing this document of facts and figures for many years. We aim to help readers understand the main trends of tourism in Hungary, and particularly service providers, who are the most important participants in the sector. It is no news to you that Hungary has been a member state of the European Union for about a year. Membership has already presented several issues and is expected to bring even more challenges in the future. As one of the prime driving forces of the Hungarian economy, tourism has been enjoying full government support. This is particularly relevant this year as a new and independent governmental body, the Hungarian Tourist Authority was set up on January 1, 2005 to act as the administrator of the sector under the auspices of the Minister without Portfolio in Charge of Regional Development and Convergence. This opens new horizons for the sector, particularly as regards the implementation of key concepts, the coordination of regional development projects and the utilization of European funds. In terms of the diversity of natural and cultural assets in Hungary, we can happily say that we are at the forefront. To highlight only three areas: the wealth of Hungarian thermal water resources, the diversity and colourful character of our cultural events and the excellence of Hungarian cuisine and Hungarian wines. Moreover, there are plenty of additional opportunities afforded by Hungary's tourism resources. To expand that supply and to further increase the attractiveness of the country as a tourist destination, we have developed the National Tourism Development Strategy, which sets priorities and directions for development until 2013 in line with the EU planning cycle. We hope that this new publication will provide you with a comprehensive description of our past achievements as well as our future opportunities. We trust that the information in this publication will be of use to you and will refine your image of us and our country. Naturally, all that cannot make up for personal experience so we take this opportunity to invite you to visit Hungary. Budapest, February 15, 2005 István Kolber, dr. Minister without Portfolio in Charge of Regional Development and Convergence 1

Content Welcome by István Kolber, dr., Minister without Portfolio in Charge of Regional Development and Convergence 1 General Information about Hungary 3 Facts and Figures 4 International Tourism in 2004 and Hungary s Position in International Tourism 4 The Economic Importance of Tourism in the World and in Hungary 5 Tourism in Hungary, 2004 7 Summary Data on Hungarian Tourism, 2002-2004 7 Incoming Tourism 8 Domestic Tourism 14 Outgoing Tourism 17 Arrivals and Guest Nights at Commercial Accommodation 18 Number of guests and guest nights at private accommodations in Hungary 25 The Traveling Habits of the Hungarian Population in 2004 26 The Organizational Structure of Tourism in Hungary 32 Parliament 32 Parliamentary Committee on Tourism 32 Minister without Portfolio in Charge of Regional Development and Convergence 33 National Tourism Board 33 Hungarian Tourist Authority 34 Hungarian National Tourist Office 35 The Activities of the Hungarian National Tourist Office in 2004 38 The Focuses of the Marketing Communication 39 Image of Hungary as a Tourist Destination 39 Budapest 40 Lake Balaton 43 Health Tourism 46 MICE 47 Event Tourism 49 Holiday Vouchers of Social Tourism 51 Campaigns 53 Exhibitions, Fairs and Events 56 International Trade Events in Hungary 59 Brochures and CD-ROMs 62 Press and Trade Relations 63 Website 65 Call Center 66 Give-Away 66 Marketing Research 67 Cooperation with the Trade 68 Representations of the HNTO abroad 72 Tourinform offices in Hungary 73 The publication contains data of World Tourism Organization, World Travel&Tourism Council, National Bank of Hungary and Hungarian Central Statistical Office. Exchange rates (2004): 1 EUR = 251.68 HUF 1 USD = 202.63 HUF 2

General Information about Hungary Territory: 93,030 sq km Population: 10,116,742 persons (on January 1, 2004) Population density: 109.0 persons/sq km Capital: Budapest Territory: 525 sq km Population: 1,705,309 persons (on January 1, 2004) Population density: 3,248 persons/sq km Time zone: GMT + 1 hour Daylight saving: + 1 hour from the last weekend of March to the last weekend of October Official language: Hungarian Form of state: Republic Public administration: 19 counties and Budapest Hungary is situated in the Carpathian Basin in East Central Europe. The country spans 268 km from north to south and 528 km from east to west. Two plains, the Great Plain (Alföld) in the east and the Small Plain (Kisalföld) along the north-western border, cover more than 50% of the territory of the country. Visitors may witness the typical wildlife, folklore and traditions of the popular tourist destination, known as 'Magyar Puszta', during equestrian shows held in the Hortobágy National Park in the Great Plain. The two largest rivers are the River Danube (the length of its Hungarian section is 417 km) and the River Tisza (598 km), both flowing from north to south. The hills of Transdanubia are bordered in the north by Lake Balaton, the warmest freshwater lake in Central Europe. The mountains of the country such as the 400-700 m Bakony, Vértes, Velencei, Pilis Hills, the 400-800 m hills along the western border (Soproni, Kőszegi Hills), and the 500-1,000 m Northern Hills (Visegrádi, Börzsöny, Cserhát, Mátra, Bükk, Aggtelek-Rudabánya, Tokaj-Zemplén Hills), each have ranges running diagonally from north-east to south-west. The highest peak, Kékes (1,014 m), crowns the Mátra Hills. The country is divided into nine tourist regions: 1. Lake Balaton, 2. Budapest and the Central Danube Region, 3. Southern Great Plain, 4. Southern Transdanubia, 5. Northern Great Plain, 6. Northern Hungary, 7. Central Transdanubia, 8. Western Transdanubia, 9. Lake Tisza. Geographic Location Topography Tourist Regions Hungary is located in the temperate continental zone. January is the coldest Climate and August is the hottest month (with average monthly temperatures at -1 C and 21.3 C, respectively). Annual precipitation is 570 mm, and the number of sunny hours is 1,785. 3

Facts and Figures International Tourism in 2004 and Hungary's Position in International Tourism 1 International tourism recorded extremely positive results in 2004: figures of the World Tourism Organization (WTO) showed a 10% increase in international tourist arrivals to reach an all-time record 760 million. Growth was particulary strong in Asia and the Pacific region and the Middle East. In Europe, international tourist arrivals were up 4% last year, bringing an additional 15 million tourists to the old continent (Table 1). Growth characterized both leisure oriented travel and business tourism in 2004. International Tourist Arrivals, 2002 2004 Table 1 esedés 2002 2003 2004 2004/2003 2004 (million) (%) market share (%) Europe 397 399 414 4 54.6 Northern Europe 46 47 51 7 6.7 Western Europe 138 136 139 2 18.3 Central and Eastern Europe 66 68 73 8 9.6 Southern/ Mediterranean Europe 148 148 152 3 20.0 Americas 117 113 124 10 16.3 Asia and the Pacific 131 119 153 29 20.2 Africa 30 31 33 7 4.3 Middle East 28 29 35 20 4.6 World Total 703 691 760 10 100.0 Source: World Tourism Organization The dynamic development of world economy, and particularly the economic performance in the United States of America, in Asian countries and in some European source markets with both international and European importance influenced significantly world tourism performance in 2004. While incoming tourism to the United States of America, Mexico, the Caribbean, Central and South America, Asia, the Middle East and the United Kingdom benefited from the strong euro, it put downward pressure on the number of guests visiting Canada, Australia and New Zealand and destinations in Southern Africa. Europe has maintained her leading role in international tourism: the old continent claimed 54.6% of all international tourist arrivals in 2004, including 73 million international tourist arrivals in Central and Eastern Europe, which represents a market share of 17.6%. Fuelled by the 1 Source: WTO Barometer survey, January 2005. For further information visit: www.world-tourism.org 4

exchange rate of the euro and the EU enlargement, the Central and Eastern European countries and Northern Europe were the engines of growth within Europe. Ranked 12th in international tourist arrivals 2, Hungary occupied a prestigious position among the most popular tourist destinations. Besides the number of international arrivals, the receipts from international tourism showed dynamic growth (+10.3%) in 2004, generating EUR 500 billion for the destinations. Europe benefited from more than half of these revenues (52.4%), with the Americas and Asia claiming 21.1% and 20.1%, respectively. Overall income per international tourist arrival amounted to EUR 660, the same came to EUR 630 in Europe, whilst tourists visiting Central and Eastern Europe spent EUR 290 on average per person. Outbound trip features in 2004: increasing number/proportion of people travelling on their own, increasing number/proportion of trips with shorter length of stay, escalating interest in the special products of tourism/niche segments, more frequent use of the Internet, expansion of low-cost flights, late booking becoming increasingly common, added price sensitivity. International air traffic also expanded substantially in 2004. Figures published by the International Civil Aviation Organization (ICAO) put the number of passengers taking regular flights last year at around 1.8 billion; moreover, passenger traffic on international flights was up 15% in 2004. The Economic Importance of Tourism in the World and in Hungary Based on the data derived from the simulated Tourism Satellite Account (TSA) developed by the World Travel & Tourism Council (WTTC), the direct contribution of tourism to global GDP amounted to USD 1,542.1 billion (3.8%) in 2004. The number of people employed directly in tourism was 73.7 million, which corresponds to 2.8% of total employment. Taking also into account the multiplier effect of tourism, the contribution of the sector to global GDP rose to 10.4% and the jobs generated by the sector reached 8.1% of total employment in 2004. Government expenditure on tourism amounted to 265.3 billion USD, whilst 9.4% of all 2 In 2002. As of 2003 WTO publishes the ranking order of the top ten destinations only. The Economic Importance of Tourism, 2004 Table 2 World European Union Central and Hungary (EU-15) Eastern Europe (USD billion) GDP (direct) 1,542.1 531.4 31.9 4.6 GDP (indirect) 4,217.7 1,422.2 126.0 9.8 Government expenditure 265.3 83.5 6.3 0.5 Capital investment 802.3 222.2 (million employees) 33.2 1.7 (thousand employees) Employment (direct) 73.7 8.1 3.2 237.7 Employment (indirect) 214.7 21.5 13.0 385.7 Source: World Travel & Tourism Council 5

capital investments (i.e. USD 802.3 billion) were targeted at tourism (Table 2 and Figure 1). In Hungary, the direct GDP contribution of tourism, the ratio of employment in tourism and of government expenditure on tourism each surpass the corresponding averages of the European Union and Central and Eastern Europe. On the other hand, capital investments into the sector are lower in Hungary than the averages observed globally, in the European Union and in Central and Eastern Europe. Calculations of the WTTC indicate that the contribution of tourism to economic performance reached 4.7% in 2004, and with the multiplier effect taken into account, the GDP share of the sector came to 10.1% in Hungary. A total of 237.7 thousand people, corresponding to 5.2% of total employment, worked in the sector, which - upon factoring in multiplier effect - brought the number of people employed in the national economy through tourism to 385.7 thousand (9.8%). That is to say one in ten jobs has been created directly or indirectly by tourism. Tourism had a 5.2% share in government expenditure. 4000 3500 3000 2500 2000 1500 1000 500 Balance of Tourism, 2002 2004 (EUR million) Figure 2 Figures of the National Bank of Hungary show that tourism receipts amounted to EUR 3,265 million in Q1-Q3 2004, which means a 8,7% decline over the corresponding period in 2003. Tourism expenditure reached EUR 2,302 million (+0.6%) and as a result the balance of tourism (EUR 362 million) in Q1-Q3 2004 fell 25.3% short of the balance reached in the same period a year earlier. The decline of tourism receipts in Q3 and the rate at which tourism expenditure rose were smaller. The positive balance of tourism covered 40.2% of the balance trade's losses in January-September, 2004 (Figure 2). Figure 1 0 2002 2003 2004 Receipts Expenditure Balance Source: National Bank of Hungary 14 The Economic Importance of Tourism, 2004 (%) 12 10 8 6 4 2 0 World European Union (EU-15) Central and Eastern Europe Hungary GDP (direct) GDP (indirect) Government expenditure Capital investment Employment (direct) Employment (indirect) Source: World Travel & Tourism Council 6

Tourism in Hungary, 2004 Summary Data on Hungarian Tourism, 2002 2004 2002 2003 2004 2004/2003 (%) Traffic at frontiers International arrivals (000s) 31,739 31,412 36,635 101.2* Hungarians travelling abroad (000s) 12,966 14,283 17,558 122.9 Arrivals and guest nights at commercial accommodation Domestic Arrivals (000s) 3,163 3,367 3,347 99.4 Guest nights (000s) 8,089 8,571 8,391 97.9 Average length of stay (nights) 2.6 2.5 2.5 98.5 Foreign Arrivals (000s) 3,013 2,948 3,270 110.9 Guest nights (000s) 10,361 10,040 10,508 104.7 Average length of stay (nights) 3.4 3.4 3.2 94.4 Total Arrivals (000s) 6,176 6,315 6,616 104.8 Guest nights (000s) 18,450 18,611 18,899 101.5 Average length of stay (nights) 3.0 2.9 2.9 96.9 From which: Hotels Domestic Arrivals (000s) 1,633 1,717 1,826 106.4 Guest nights (000s) 4,152 4,353 4,532 104.1 Average length of stay (nights) 2.5 2.5 2.5 97.9 Foreign Arrivals (000s) 2,427 2,375 2,745 115.6 Guest nights (000s) 7,529 7,346 8,106 110.4 Average length of stay (nights) 3.1 3.1 3.0 95.5 Total Arrivals (000s) 4,060 4,092 4,571 111.7 Guest nights (000s) 11,681 11,699 12,638 108.0 Average length of stay (nights) 2.9 2.9 2.8 96.7 Arrivals and guest nights at private accommodation Domestic Arrivals (000s) 315 324 362 111.7 Guest nights (000s) 1 522 1 558 1 462 93.8 Average length of stay (nights) 4.8 4.8 4.0 83.3 Foreign Arrivals (000s) 320 324 318 98.0 Guest nights (000s) 1 967 1 835 1 633 89.0 Average length of stay (nights) 6.1 5.7 5.1 89.5 Total Arrivals (000s) 635 649 680 104.8 Guest nights (000s) 3 489 3 393 3 094 91.2 Average length of stay (nights) 5.5 5.2 4.5 86.5 Balance of tourism (EUR million) Receipts 3,925 3,577 3,265 91.3 Expenditure 2,252 2,288 2,302 100.6 Balance 1,673 1,288 962 74.7 * Change over the year before is based on the number of arrivals at frontiers. Until 2004 departures at frontiers were registered as international arrivals. Sources: Hungarian Central Statistical Office, National Bank of Hungary Share of Foreign and Domestic Guest Nights at Commercial Accommodation, 2004 (%) Figure 3 Domestic 44.4 Foreign 55.6 7

Incoming Tourism The Hungarian Central Statistical Office (HCSO) recorded 36.6 million foreign arrivals in Hungary in 2004, representing an increase of 1.2%. Market Share of Main Source Markets, 2004* (%) Figure 4 Europe, as the main source market, generated the vast majority of arrivals (97.4%) (Table 4). Most of the visitors arrived from the neighboring countries: Romania, Slovakia, Austria, Serbia and Montenegro and the Ukraine, as well as from Germany. Three quarters of the arrivals originated in those six countries. From among the main source markets 3 of Hungary (Figure 4), the number of arrivals from the United Kingdom, the United States of America, France, Italy and Austria increased in 2004. Incoming tourism from the United Kingdom showed an outstanding growth (+38.1%) during the period. The number of German tourists to Hungary fell slightly short of the level in 2003. Of the markets with great growth potential 4, the rate of increase in the number of arrivals was especially marked in the case of Poland, Japan and China. The number of Chinese visitors doubled in 2004. The number of tourists from Denmark and the Netherlands also showed a rise whilst the Russian market was subject to minor decline. Table 3 Austria 6.9 France 3.4 United Kingdom 5.6 Germany 32.7 Italy 5.7 USA 4.4 Other 41.3 * Based on the number of guest nights at commercial accommodation. International Tourist Arrivals by Means of Transport, 2002 2004 2002 2003 2004 2004/2003* (000s) (%) Road 28,524 28,256 32,548 100.2 Air 1,302 1,353 2,282 124.7 Water 168 191 256 128.7 Rail 1,746 1,611 1,549 92.0 Total 31,739 31,412 36,635 101.2 * Change over 2003 is based on the number of arrivals at frontiers. Significant increases (over 10%) were recorded for certain other source markets including Luxembourg, Portugal, Spain, Ireland, Canada, Norway, the Czech Republic, Slovakia, Greece, Belgium, Finland and Israel. Altogether 3.3 million foreign arrivals (49.4% of the total arrivals) and 10.5 million foreign guest nights (55.6% of the total guest nights) were registered at commercial accommodation facilities in 2004. The increase of the number of arrivals and guest nights came to 10.9% and 4.7%, respectively. Nearly 318 thousand guests at private accommodation establishments spent more than 1.6 million guest nights in 2004. 5 3 Main source markets: Austria, France, Germany, Italy, United Kingdom and the USA. 4 Source markets with great growth potential: Denmark, the Netherlands, Japan, China, Poland and Russia. 5 Further parts of this chapter contain the analysis of the commercial accommodation establishments. 8

Table 4 Arrivals at Frontiers by Country of Origin, 2002 2004 2002 2003 2004 2004/2003* (000s) (%) Austria 4,735 4,870 5,237 101.2 Belgium 73 85 122 112.1 Bosnia-Herzegovina 131 99 88 74.2 Bulgaria 772 771 990 102.6 Croatia 2,115 1,540 1,280 72.1 Czech Republic 513 659 856 119.7 Denmark 58 67 92 104.6 Estonia 14 13 13 89.4 Finland 67 59 83 110.8 France 233 249 332 109.1 Germany 2,739 2,875 3,136 96.3 Greece 68 74 121 116.1 Ireland 27 31 49 125.2 Italy 418 466 632 108.0 Latvia 18 18 20 92.1 Lithuania 42 36 41 106.9 Luxembourg 3 3 9 187.1 Macedonia 30 20 32 85.5 Moldavia 66 74 125 103.8 the Netherlands 239 240 296 100.1 Norway 37 38 50 120.0 Poland 906 768 1,007 119.6 Portugal 18 17 27 133.4 Romania 5,660 5,976 7,435 102.7 Russia 88 91 100 94.9 Serbia and Montenegro 3,912 3,347 3,618 87.3 Slovakia 4,051 4,425 5,548 117.9 Slovenia 598 612 688 106.2 Spain 81 84 125 126.1 Sweden 123 132 164 95.8 Switzerland 127 158 219 108.5 Turkey 143 118 150 95.1 Ukraine 2,642 2,450 2,564 91.5 United Kingdom 207 208 319 138.1 Europe 30,994 30,712 35,669 100.9 from which: EU-15 9,089 9,461 10,743 101.8 EU-24 15,242 17,549 18,935 107.9 USA 335 304 389 113.3 Canada 61 54 83 121.2 Americas 428 385 515 113.4 China 12 12 25 195.0 Israel 90 104 138 110.0 Japan 87 79 95 112.9 Asia 274 275 380 112.5 Australia and the Pacific 29 22 43 149.8 Africa 15 17 28 99.6 Total 31,739 31,412 36,635 101.2 * Change over 2003 is based on the number of arrivals at frontiers. ** In 2002 Yugoslavia. International Tourist Arrivals by Means of Transport, 2004 (%) Figure 5 Road 88.8 Air 6.2 Water 0.7 Rail 4.2 9

Over three quarters (77.1%) of the guests stayed at hotels last year. Representing 31.4% and 30.8% of the total foreign guest nights, respectively, four and three star hotels recorded outstanding achievements. Hotels and spa hotels registered an all-time record both in terms of arrivals and guest nights in 2004 (Table 5 and Figure 6). Figure 6 Foreign Guest Nights by Type of Accommodation, 2004 (%) The ratio of foreigners within the total number of hotel guests and guest nights was 60.1% and 64.1%, respectively. Incoming Tourism by Type of Accommodation, 2002 2004 Table 5 Number of Arrivals 2002 2003 2004 2004/2003 (000s) (%) Hotels 2,427 2,375 2,745 115.6 5 star 305 332 432 130.4 4 star 866 888 1,114 125.6 3 star 1,025 966 1,025 106.1 2 star 191 155 141 91.2 1 star 40 34 32 93.1 Spa hotels 278 283 318 112.4 Wellness hotels* - - 39 - Guesthouses 232 224 206 92.0 Tourist hostels 29 27 23 86.7 Youth hostels 31 32 35 110.0 Bungalows 54 53 44 83.1 Camping site 241 237 216 91.1 Total 3,013 2,948 3,270 110.9 5 star hotels 10.7 4 star hotels 31.1 3 star hotels 30.6 2 star hotels 3.9 1 star hotels 0.9 Guesthouses 5.9 Tourist hostels 0.7 Youth hostels 1.1 Bungalows 2.3 Camping sites 13.0 Number of Guest Nights 2002 2003 2004 2004/2003 (000s) (%) Hotels 7,529 7,346 8,106 110.4 5 star 809 888 1,122 126.3 4 star 2,684 2,749 3,267 118.8 3 star 3,272 3,105 3,217 103.6 2 star 638 495 409 82.6 1 star 126 108 90 83.4 Spa hotels 1,380 1,365 1,486 108.9 Wellness hotels - - 172 - Guesthouses 731 701 623 88.9 Tourist hostels 96 77 69 89.2 Youth hostels 152 130 112 86.2 Bungalows 296 304 238 78.3 Camping site 1,556 1,483 1,361 91.7 Total 10,361 10,040 10,508 104.7 * Wellness hotels are classified as of 2004. The EU-15 generated 70.4% of the total guest nights (7,402.0 thousand nights) in Hungary in 2004. 10

Arrivals and Guest Nights at Commercial Accommodation by Country of Origin, 2004 Table 6 Commercial Accommodation From which: Hotels Arrivals (000s) 2004/2003 (%) Guest Nights (000s) 2004/2003 (%) Average Length of Stay (nights) Arrivals (000s) 2004/2003 (%) Guest Nights (000s) 2004/2003 (%) Average Length of Stay (nights) Austria 245 99.9 721 100.3 2.9 195 102.6 530 104.3 2.7 Belgium 49 119.0 152 109.9 3.1 40 126.2 110 123.8 2.88 Bulgaria 15 111.6 34 137.5 2.3 12 116.6 30 142.2 2.4 Croatia 37 110.4 73 111.6 2.0 33 116.2 65 123.0 2.0 Czech Republic 59 105.8 153 98.4 2.6 44 111.9 111 103.0 2.5 Denmark 53 103.0 293 100.0 5.5 28 107.9 101 108.2 3.6 Finland 45 110.8 142 112.4 3.2 39 115.3 125 115.8 3.2 France 150 124.8 359 123.8 2.4 131 125.4 316 123.8 2.4 Germany 744 99.5 3,440 94.3 4.6 577 104.9 2,359 98.9 4.1 Greece 35 114.8 85 107.6 2.5 33 114.4 81 106.9 2.4 Ireland 18 143.5 56 137.7 3.1 16 150.5 46 153.4 2.9 Italy 230 123.9 602 125.4 2.6 208 126.8 553 127.9 2.7 Luxembourg 6 133.8 19 127.2 3.5 4 114.4 11 100.7 2.9 the Netherlands 102 99.6 416 95.8 4.1 63 103.3 183 100.1 2.9 Norway 25 111.9 77 114.3 3.1 22 111.4 69 112.7 3.1 Poland 91 104.4 241 97.7 2.7 54 110.1 121 104.5 2.3 Portugal 13 195.7 32 188.6 2.5 12 209.1 30 201.1 2.4 Romania 97 109.6 189 89.9 1.9 78 116.0 145 105.2 1.9 Russia 46 86.7 164 82.8 3.5 42 93.5 147 96.8 3.5 Serbia and Montenegro 42 64.6 98 67.2 2.3 38 64.4 86 65.9 2.3 Slovakia 36 102.7 86 99.2 2.4 22 115.1 49 113.9 2.3 Slovenia 20 94.9 38 92.8 1.9 17 94.4 31 93.3 1.9 Spain 120 128.2 319 127.6 2.6 116 128.5 308 127.4 2.6 Sweden 57 102.4 176 105.3 3.1 51 104.1 155 106.8 3.0 Switzerland 65 118.5 228 111.2 3.5 56 124.7 192 114.8 3.4 Turkey 18 93.6 48 92.4 2.7 17 92.4 45 90.5 2.7 Ukraine 45 83.9 111 86.9 2.5 37 87.5 92 93.4 2.5 United Kingdom 219 154.7 589 152.5 2.7 205 157.6 548 155.4 2.7 Other European countries 101 122.1 260 116.4 2.6 91 124.6 235 115.7 2.6 Europe 2,782 108.5 9,202 103.0 3.3 2,283 113.3 6,874 109.1 3.0 from which: EU-15 2,086 111.0 7,402 104.5 3.5 1,719 116.2 5,457 110.8 3.2 Asia 257 133.4 648 122.1 2.5 250 134.2 624 121.0 2.5 from which: Israel 78 125.9 257 121.3 3.3 77 126.5 253 121.4 3.3 Japan 89 135.0 197 133.5 2.2 86 136.0 189 132.6 2.2 China 11-28 - 2.7 10-25 - 2.6 Other Asian countries 79 122.6 166 96.9 2.1 77 124.3 156 95.2 2.0 Africa 12 215.1 34 163.3 2.7 12 238.6 31 167.0 2.7 Americas 202 116.3 580 111.0 2.9 188 116.9 541 111.2 2.9 from which: USA 160 115.9 462 111.0 2.9 150 116.8 434 111.6 2.9 Canada 17 125.7 52 115.2 3.0 15 128.5 46 115.4 3.1 Other American countries 25 113.0 66 107.9 2.7 23 111.0 61 105.0 2.7 Australia and the Pacific 16 140.0 44 137.2 2.7 13 144.7 36 139.5 2.8 Total International 3,270 110.9 10,508 104.7 3.2 2,745 115.6 8,106 110.4 3.0 Total Domestic 3,347 99.4 8,391 97.9 2.5 1,826 106.4 4,532 104.1 2.5 Total 6,616 104.8 18,899 101.5 2.9 4,571 111.7 12,638 108.0 2.8 11

The dynamic growth of the number of guest nights from the United Kingdom, Italy, France and the United States of America compensated for the decline of the German guest nights (Figure 7). This decline was smaller than in 2003, which is a sign of the recovery of this source market (Table 6). From among the other source markets, overseas countries, Ireland, Norway, Finland, Sweden, Portugal, Bulgaria, Spain, Croatia and Greece as well as Switzerland, Luxembourg, Belgium and Canada reached outstanding results last year. Foreign arrivals and guest nights show significant geographic concentration in Hungary. In 2004, about two thirds (63.8%) of all foreign guests visited Budapest and the Central Danube Region, whilst 13.0% chose the Lake Balaton. The role of Western Transdanubia is also important as it registered 8.6% of the foreign arrivals at commercial accommodation. The number of arrivals rose in Budapest and the Central Danube Region (+22.0%), in Western Transdanubia (+6.3%), in Central Transdanubia (+6.3%), near the Lake Tisza (+2.8%) and in the Southern Great Plain (+1.8%). 55 50 45 40 35 30 25 20 15 10 5 0-5 -10 Figure 7 Main Source Markets by Guest Nights, 2003 2004 (%) Guest nights also speaks in favour of the supremacy of the capital and its surroundings and the Lake Balaton: in 2004 Budapest and the Central Danube Region claimed more than half of the foreign guest nights, followed by the Lake Balaton (one quarter of the guest nights) (Figure 8). An analysis of the main source markets of each tourist region reveals the dominance of German guests (Table 7). The guest nights spent in Budapest by UK, Italian, US, Spanish, French and Israeli tourists are also substantial. Besides Germany, Austria is the clear leader among the top five source markets of the Western Transdanubia Region, whilst the number of Polish guests is relevant near the Lake Tisza, in the Northern Great Plain and in Northern Hungary. Main Source Markets by Tourist Region, 2004 Austria United Kingdom Italy Foreign Total France Germany USA 1 2 3 4 5 1 5 Total Country % Country % Country % Country % Country % (%) Table 7 Budapest and the Central Danube Germany 14.1 United Kingdom 9.7 Italy 9.1 USA 7.7 Spain 5.6 46.2 of which: Budapest Germany 13.8 United Kingdom 10.0 Italy 9.1 USA 8.0 Spain 5.8 46.7 Central Transdanubia Germany 39.1 the Netherlands 14.5 Austria 6.5 Japan 4.6 Italy 4.5 69.2 Lake Balaton Germany 60.3 Austria 10.0 Denmark 8.1 the Netherlands 6.9 Switzerland 2.1 87.4 Lake Tisza Germany 29.0 Poland 18.0 Slovakia 9.3 Austria 4.9 Luxembourg 3.6 64.8 Northern Great Plain Germany 52.2 Poland 11.5 Ukraine 3.9 Romania 3.9 the Netherlands 3.3 74.8 Northern Hungary Germany 27.4 Poland 14.8 the Netherlands 6.1 Czech Republic 5.5 Slovakia 4.7 58.5 Southern Great Plain Germany 37.9 Romania 6.2 the Netherlands 5.5 Italy 5.4 Austria 5.3 60.3 Southern Transdanubia Germany 57.0 Austria 7.3 Czech Republic 4.0 the Netherlands 3.3 Italy 3.2 74.8 Western Transdanubia Germany 46.8 Austria 24.3 Switzerland 5.5 Czech Republic 3.4 Italy 2.6 82.6 Country total Germany 32.7 Austria 6.9 Italy 5.7 United Kingdom 5.6 USA 4.4 55.3 * Based on foreign guest nights spent at commercial accommodation. 12

Incoming tourism dominated in Budapest and the Central Danube Region and the Lake Balaton Region. In the case of the former, four out of five (81.1%) guest nights were associated with foreigners, whilst the foreign share in total guest nights was 58.1% at the Lake Balaton last year. The increase in the number of foreign guest nights was close to 20% in Budapest and the Central Danube Region, 1.8% in Western Transdanubia and 1.9% in the Southern Great Plain. Most of the foreign guest nights spent at commercial accommodation were registered in the period between May and September, including peak months such as July (15.0%) and August (15.9%) (Figure 9). The lowest number of foreign guest nights was realized in January (3.1%). Except for June, July and August, the number of guest nights increased each month in 2004. November (+18.5%) and December (+19.4%) recorded the most dynamic increase of foreign guest nights at commercial accommodation and were followed by February (+17.6%) and March (+15.6%). In 2004, foreign guests stayed 3.2 nights on average at commercial accommodation in Hungary, which was substantially longer than the average length of stay of domestic guests (2.5 nights) (Table 8). Guests from Denmark (5.5 nights), Germany (4.6 nights), the Netherlands (4.1 nights), Russia (3.5 nights), Switzerland (3.5 nights), Luxembourg (3.5 nights) and Israel (3.3 nights) were characterized by above average length of stay. Tourists visiting Hungary from the European Union (EU-15) stayed 3.5 nights on average at commercial accommodation. Foreign Guest Nights by Tourist Region, 2004 (%) Figure 8 Lake Balaton 24.2 Budapest and the Central Danube 51.6 Southern Great Plain 2.4 Southern Transdanubia 2.6 Northern Great Plain 5.0 Northern Hungary 2.1 Central Transdanubia 2.6 Western Transdanubia 8.7 Lake Tisza 0.8 The total amount of accommodation fee generated by foreign guests reached almost HUF 69.5 billion in 2004 (Table 21), which corresponds to an increase of 10.4%. Hotels realized more than ninety percent Figure 9 Monthly Breakdown of Foreign Guest Nights at Commercial Accommodation, 2004 (000s) 1800 1600 1400 1200 1000 800 600 400 200 0 January February March April May June Country total Lake Balaton Budapest July August September October November December 13

Table 8 Average Length of Stay of Foreigners by Type of Accommodation, 2002 2004 2002 2003 2004 2004/2003 (nights) % Hotels 3.1 3.1 3.0 95.5 5 star 2.7 2.7 2.6 97.0 4 star 3.1 3.1 2.9 94.7 3 star 3.2 3.2 3.1 97.7 2 star 3.3 3.2 2.9 90.5 1 star 3.2 3.2 2.8 88.5 Spa hotels 5.0 4.8 4.7 97.3 Wellness hotels - - 4.4 - Guesthouses 3.2 3.1 3.0 96.5 Tourist hostels 3.3 2.9 2.9 102.8 Youth hostels 4.9 4.1 3.2 78.4 Bungalows 5.5 5.7 5.4 93.5 Camping sites 6.5 6.3 6.3 100.7 Total 3.4 3.4 3.2 94.4 (91.3%) of those receipts which meant an increase of 12.2% during the last year. Like the number of arrivals and guest nights, receipts from accommodation fee also shows marked geographic concentration with Budapest and the Central Danube Region claiming 71.5%, the share of the Lake Balaton Region at 12.9% and that of Western Transdanubia at 6.1%. Accommodation fee revenue increased in each of the regions except for three regions (Lake Balaton, Lake Tisza and the Northern Great Plain). The increase was most dynamic in Northern Hungary (+19.5%), in Budapest and the Central Danube Region (+16.4%) and Central Transdanubia (+12.3%). Figure 10 Domestic Guest Nights by Type of Accommodation, 2004 (%) Domestic Tourism Commercial accommodation units registered 3,347 thousand domestic arrivals (-0.6%) and 8,391 thousand domestic guest nights (-2.1%) in 2004. The ratio of domestic arrivals to the total number of arrivals was 50.6%, while domestic guest nights represented 44.4% of the total number of guest nights. In 2004, domestic guests spent over half of the guest nights in hotels (Table 9 and Figure 10). The number of domestic guest nights at hotels (4.5 million) reached an all-time record in 2004. Among hotels, three and four star units fared the best. The number of domestic guest nights increased substantially at four and five star hotels and at spa hotels. On the other hand, one and two star establishments recorded decline (Figure 11). The number of domestic guest nights also fell in other types of accommodation. Private accommodation establishements recorded more than 362 thousand guests and nearly 1.5 million guest nights in 2004. 6 5 star hotels 1.1 4 star hotels 12.8 3 star hotels 26.9 2 star hotels 9.0 1 star hotels 4.3 Guesthouses 16.7 Tourist hostels 9.4 Youth hostels 7.0 Bungalows 8.2 Camping sites 4.7 6 Further parts of this chapter contain the analysis of the commercial accommodation establishments. 14

The geographic concentration of domestic guest nights was less marked than that of foreign guest nights in 2004. Whilst 16.8% of the domestic guests opted for Budapest and the Central Danube Region, 17.9% chose the Lake Balaton. The role of Northern Hungary was also outstanding, as that region received 15.4% of all the domestic arrivals. Two regions, Domestic Tourism by Type of Accommodation, 2002 2004 Table 9 Number of Arrivals 2002 2003 2004 2004/2003 (000s) (%) Hotels 1,633 1,717 1,826 106.4 5 star 37 34 43 124.2 4 star 302 384 505 131.5 3 star 845 839 906 108.0 2 star 353 352 284 80.7 1 star 97 108 89 82.4 Spa hotels 219 250 336 134.6 Wellness hotels - - 116 - Guesthouses 640 663 626 94.4 Tourist hostels 309 343 307 89.6 Youth hostels 210 209 209 100.3 Bungalows 214 260 235 90.6 Camping sites 157 176 143 81.1 Total 3,163 3,367 3,347 99,4 Number of Guest Nights 2002 2003 2004 2004/2003 (000s) (%) Hotels 4,152 4,353 4,532 104.1 5 star 73 65 90 139.0 4 star 649 825 1,075 130.3 3 star 2,107 2,075 2,254 108.6 2 star 1,002 1,002 755 75.4 1 star 321 386 358 92.9 Spa hotels 706 772 1,011 131.0 Wellness hotels - - 241 - Guesthouses 1,422 1,471 1,401 95.3 Tourist hostels 805 876 789 90.1 Youth hostels 626 614 591 96.3 Bungalows 633 783 685 87.5 Camping sites 451 475 393 82.8 Total 8,089 8,571 8,391 97.9 Budapest and the Central Danube Region (+1.9%) and Western Transdanubia (+2.5%) registered increases in the number of arrivals, the other regions showed reduction. In terms of guest nights, the Lake Balaton Region played a leading role: more than one fifth of the domestic guest nights were registered there in 2004. Budapest and the Central Danube Region claimed 15.1% of the Figure 11 Change of Domestic Guest Nights at Hotels and Spa Hotels, 2002 2004 (%) 50 45 40 35 30 25 20 15 10 5 0 Hotels Spa Hotels 2002 2003 2004 15

domestic guest nights; the same ratio was 13.6% in Northern Hungary, 12.7% in Western Transdanubia and 11.7% in the Northern Great Plain Region (Figure 12). Figure 12 Domestic Guest Nights by Tourist Region, 2004 (%) Domestic tourism plays an outstanding role in Northern Hungary, in the Southern Great Plain Region and in Southern Transdanubia: as domestic guests generated more than 70% of the guest nights recorded in the three regions. Commercial accommodation units registered most of the domestic guest nights in July and August (16.9% and 17.9%) (Figure 13). The number of domestic guest nights was the lowest in January (4.3%). Domestic guest nights increased in February (+7.7%), March (+8.1%), April (+0.8%), November (+7.4%) and December (+1.7%). In 2004, domestic guests stayed 2.5 nights on average at commercial accommodation (Table 10). The average length of stay of domestic guests was the longest in the Lake Balaton Region (3.1 nights). Above average length of stay was typical of the Lake Tisza and the Northern Great Plain (2.7 nights, each). Average length of stay remained below the national average in Southern Transdanubia, Northern Hungary and Western Transdanubia (2.2 nights, each). Average length of stay increased in the Northern and Southern Great Plain Regions and in the Lake Tisza Region in 2004. The total amount domestic guests paid for commercial accommodation reached almost HUF 29,8 billion in 2004 (Table 21), which corresponds to an increase of 15.2%. Hotels realized more than seventy percent (70.1%) of those receipts which meant an increase of 20.5% during the year. In 2004, 23% of the accommodation fee revenue was realized in Budapest and the Central Danube Region, 20.6% at the Lake Balaton, 12.3% in Northern Hungary and 12.4% in Western Transdanubia. Each Lake Balaton 21.8 Budapest and the Central Danube 15.1 Southern Great Plain 9.2 Southern Transdanubia 7.9 Northern Great Plain 11.7 Northern Hungary 13.6 Central Transdanubia 5.8 Western Transdanubia 12.7 Lake Tisza 2.3 Figure 13 Monthly Breakdown of Domestic Guest Nights at Commercial Accommodation, 2004 (000s) 1600 1400 1200 1000 800 600 400 200 0 January February March April May June Country total Lake Balaton Budapest July August September October November December 16

Table 10 Average Length of Stay of Domestic Guests by Type of Accommodation, 2002 2004 2002 2003 2004 2004/2003 (nights) % Hotels 2,5 2,5 2,5 97,9 5 star 2,0 1,9 2,1 110,6 4 star 2,1 2,1 2,1 99,1 3 star 2,5 2,5 2,5 100,6 2 star 2,8 2,8 2,7 93,5 1 star 3,3 3,6 4,0 112,6 Spa hotels 3,2 3,1 3,0 96,9 Wellness hotels - - 2,1 - Guesthouses 2,2 2,2 2,2 100,9 Tourist hostels 2,6 2,6 2,6 100,6 Youth hostels 3,0 2,9 2,8 96,0 Bungalows 3,0 3,0 2,9 96,7 Camping sites 2,9 2,7 2,8 102,2 Total 2,6 2,5 2,5 98,5 region recorded an increase of the accommodation fee revenue, with Budapest and the Central Danube Region claiming +38.3%, followed by Northern Hungary (+14.2%) and Western Transdanubia (+14.3%). Outgoing Tourism Data collected by the Hungarian Central Statistical Office show that the number of Hungarians travelling abroad reached 17.6 million in 2004, which represents a marked increase (+22.9%). Outgoing tourism showed dynamic growth at the frontiers with Romania (+129.9%), the Ukraine (+103.1%), Serbia and Montenegro (+44.9%), Slovenia (+42.5%) and Budapest, i.e. Ferihegy Airport (+24.2%). Conversely, there was a simultaneous decrease in the number of Hungarians travelling abroad across the Croatian and Austrian frontier last year. The majority of Hungarians travelling abroad left during the summer months. More than 10% travelled in August, and over 40% of all outgoing trips were recorded in the period between June and September (Figure 14). Hungarians Travelling Abroad by Means of Transport, 2002-2004 Table 11 2002 2003 2004 2004/2003 (000s) (%) Road 11,662 12,903 16,050 124.4 Air 699 772 916 118.6 Water 18 19 23 117.5 Rail 587 588 570 96.9 Total 12,966 14,283 17,558 122.9 Monthly Distribution of Hungarians Travelling Abroad, 2004 (000s) 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Figure 14 January February March April May June July August September October November December 17

Arrivals and Guest Nights at Commercial Accommodation Capacity of Commercial Accommodation Establishments, 2002 2004 Units Rooms Beds number 2004/ number 2004/ number 2004/ 2002 2003 2004 2003 (%) 2002 2003 2004 2003 (%) 2002 2003 2004 2003 (%) Hotels 806 822 824 100.2 45,512 46,252 47,611 102.9 107,899 109,726 112,769 102.8 5 star 12 14 16 114.3 2,840 3,275 3,709 113.3 5,979 6,859 7,834 114.2 4 star 80 89 105 118.0 9,562 10,653 12,112 113.7 20,878 23,552 26,778 113.7 3 star 411 414 428 103.4 21,696 21,449 21,977 102.5 50,999 50,263 51,835 103.1 2 star 222 224 200 89.3 8,513 8,127 7,179 88.3 22,115 21,579 18,962 87.9 1 star 81 81 75 92.6 2,901 2,748 2,634 95.9 7,928 7,473 7,360 98.5 Spa hotels 44 48 56 116.7 5,426 5,819 6,774 116.4 11,690 12,502 14,868 118.9 Wellness hotels - - 15 - - - 1,080 - - - 2,634 - Guesthouses 1,361 1,439 1,128 78.4 16,903 17,839 16,652 93.3 46,744 48,908 45,201 92.4 Tourist hostels 284 315 264 83.8 6,806 8,591 8,410 97.9 29,267 35,859 34,827 97.1 Youth hostels 124 128 133 103.9 5,344 5,519 5,356 97.0 20,881 21,523 21,890 101.7 Bungalows 463 480 369 76.9 7,313 7,264 6,895 94.9 23,984 24,645 22,862 92.8 Camping sites 339 333 283 85.0 106,388 106,616 98,945 92.8 Total 3,377 3,517 3,001 85.3 81,878 85,465 84,924 99.4 335,163 347,277 336,494 96.9 A total of 3,001 commercial accommodation units were operating in Hungary on July 31, 2004 and offered 84,924 rooms and 336,494 beds (Table 12). More than one third of the capacity, i.e. 113 thousand beds was available in hotels, including three-star establishments (representing 46% of total hotel capacity), four-star houses (with 23.7% of total hotel capacity) and two-star operations (16.8%). Camping sites contributed another major component (almost 30%) of available capacity. Table 12 Table 13 The Capacity of Conference Facilities at Commercial Accommodation, July 31, 2004 Number of Conference Rooms Total Floor Area of Conference Rooms (sq m) Hotels 1,220 105,203 5 star 136 10,837 4 star 322 30,288 3 star 555 47,384 2 star 185 14,732 1 star 22 1,962 Spa hotels 134 12,914 Wellness hotels 32 3,084 Guesthouses 216 14,752 Tourist hostels 47 4,328 Youth hostels 20 2,647 Bungalows 33 2,834 Camping sites 16 1,324 Total 1,552 131,088 18

About one fifth (19.8%) of all the commercial accommodation facilities is situated in the Lake Balaton Region, followed by Northern Hungary (13.9%), Western Transdanubia (13.9%) and Budapest and the Central Danube Region, where 12.3% of the units operated in 2004. Regarding hotels, the role of two regions, namely Budapest and the Central Danube Region and the Lake Balaton Region is outstanding. Five-star hotels were available in three regions in 2004: thirteen operated in Budapest, two in Western Transdanubia and one in Northern Hungary. As regards four-star operations, the capital and its surroundings have a clear dominance with 36,2% of all four star hotels. Budapest and the Central Danube Region is followed by the Lake Balaton (18.1%) and Western Transdanubia (14.3%). Budapest and the Central Danube Region and the Lake Balaton Region each offer one fifth of the three star hotels. Figure 15 Number of Arrivals by Tourist Region, 2004 (%) Number of Arrivals by Tourist Region, 2004 Table 14 2002 2003 (000s) 2004 2004/2003 (%) Budapest and the Central Danube 2,227 2,260 2,647 117.1 From which: Budapest 1,935 1,973 2,340 118.6 Central Transdanubia 260 278 275 98.8 Lake Balaton 1,082 1,057 1,024 97.0 Lake Tisza 89 106 95 90.3 Northern Great Plain 482 492 471 95.7 Northern Hungary 586 610 595 97.7 Southern Great Plain 404 441 430 97.3 Southern Transdanubia 383 393 373 94.9 Western Transdanubia 664 679 706 104.0 Total 6,176 6,315 6,616 104.8 Lake Balaton 15.5 Budapest and the Central Danube 40.8 Southern Great Plain 6.5 Southern Transdanubia 5.6 Northern Great Plain 7.1 Northern Hungary 9.0 Central Transdanubia 4.2 Western Transdanubia 10,6 Lake Tisza 1.4 Figure 16 Number of Guest Nights by Tourist Region, 2004 (%) Number of Guest Nights by Tourist Region, 2004 Table 15 2002 2003 (000s) 2004 2004/2003 (%) Budapest and the Central Danube 5,604 5,796 6,695 115.5 From which: Budapest 4,971 5,174 6,039 116.7 Central Transdanubia 729 804 756 94.1 Lake Balaton 4,994 4,716 4,369 92.7 Lake Tisza 284 319 281 88.3 Northern Great Plain 1,612 1,554 1,502 96.6 Northern Hungary 1,411 1,419 1,357 95.6 Southern Great Plain 969 1,049 1,028 98.0 Southern Transdanubia 979 1,004 930 92.6 Western Transdanubia 1,868 1,951 1,981 101.5 Total 18,450 18,611 18,899 101.5 Lake Balaton 23.1 Budapest and the Central Danube 35.4 Southern Great Plain 5.4 Southern Transdanubia 4.9 Northern Great Plain 7.9 Northern Hungary 7.2 Central Transdanubia 4.0 Western Transdanubia 10,5 Lake Tisza 1.5 19

The role of the lake is outstanding in terms of the number of bungalows (32.2% of the total) and camping sites (24.0%). Commercial accommodation units recorded around 6.6 million arrivals and 18.9 million guest nights in 2004: the number of arrivals rose by 4.8%, the number of guest nights by 1.5%. Hotels registered close to 940 thousand (+8%) more guest nights in 2004. Four out of ten guests visited Budapest and the Central Danube Region in 2004, the Lake Balaton registered 15.5% of the arrivals. In terms of the number of guest nights, the role of the Lake Balaton Region is more significant, as that region follows the Budapest and the Central Danube Region (35.4%) with more than one fifth (23.1%) of all the guest nights (Tables 14 and 15, Figures 15 and 16). Concerning the split between domestic and foreign arrivals and guest nights, the share of domestic arrivals came to 50.6%, whilst 55.6% of the guest nights total was associated with foreign guests (Table 16). In 2004, the number of guest nights spent at commercial accommodation reached a peak in August, with 16.7% of all the guest nights (Figure 17). July claimed 15.8%, and the period from June to August recorded 43.2%. May and September had an almost equal share (9.5% and 9.3%, respectively). Significant increases were achieved in the number of guest nights in February (+12.2%) and March (+12.2%), as well as in November (+13.0%) and December (+9.9%) last year. Table 16 Share of Foreign and Domestic Guest Nights by Tourist Region, 2004 (%) foreign domestic Lake Balaton 58.1 41.9 Budapest and the Central Danube 81.1 18.9 of which Budapest 86.2 13.8 Southern Great Plain 25.0 75.0 Southern Transdanubia 28.9 71.1 Northern Great Plain 34.9 65.1 Northern Hungary 15.9 84.1 Central Transdanubia 35.7 64.3 Western Transdanubia 46.3 53.7 Lake Tisza 30.6 69.4 Country total 55.6 44.4 Monthly Breakdown of Guest Nights at Commercial Accommodation, 2004 (000s) Figure 17 3200 3000 2800 2600 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 January February March April May June Country total Lake Balaton Budapest July August September October November December 20

In 2004, around 80% of the guests stayed at hotels bringing the share of hotels in total guest nights to 77.1% (Table 17 and Figure 18). Spa hotels reported a new historical record regarding the number of domestic and foreign guest nights in 2004. One fifth of the hotel guests were accommodated in five-star establishments, one third used four-star houses and 42.2% opted to stay in a three star facility. Guesthouses (10.7%) and camping sites (9.3%) claimed significant shares of the number of guest nights in the category of other commercial accommodation. Figure 18 Guest Nights by Type of Accommodation, 2004 (%) Table 17 Arrivals and Guest Nights by Type of Accommodation, 2000-2004 Arrivals 2002 2003 2004 2004/2003 (000s) (%) Hotels 4,060 4,092 4,571 111.7 5 star 342 366 475 129.8 4 star 1,167 1,272 1,619 127.3 3 star 1,871 1,804 1,930 107.0 2 star 543 507 425 83.9 1 star 137 143 121 85.0 Spa hotels 496 533 655 122.8 Wellness hotels - - 155 - Guesthouses 872 887 832 93.8 Tourist hostels 338 370 330 89.4 Youth hostels 241 241 244 101.6 Bungalows 267 313 280 89.3 Camping sites 398 413 359 86.9 Total 6,176 6,315 6,616 104.8 5 star hotels 6.4 4 star hotels 23.0 3 star hotels 28.9 2 star hotels 6.2 1 star hotels 2.4 Guesthouses 10.7 Tourist hostels 4.5 Youth hostels 3.7 Bungalows 4.9 Camping sites 9.3 Guest nights 2002 2003 2004 2004/2003 (000s) (%) Hotels 11,681 11,699 12,638 108.0 5 star 882 953 1,213 127.2 4 star 3,333 3,575 4,342 121.5 3 star 5,379 5,180 5,471 105.6 2 star 1,641 1,497 1,164 77.8 1 star 447 494 449 90.8 Spa hotels 2,086 2,136 2,497 116.9 Wellness hotels - - 413 - Guesthouses 2,153 2,171 2.024 93.2 Tourist hostels 901 953 858 90.0 Youth hostels 778 743 702 94.5 Bungalows 929 1,087 923 84.9 Guest nights 2,007 1,958 1,754 89.6 Total 18,450 18,611 18,899 101.5 As compared to the average rate of growth at commercial accommodation units, the number of arrivals increased faster in hotels in 2004. This resulted an increase of 11.7% in the number of arrivals and an increase of 8% in the number of guest nights. The continued dynamic increase 21

of the arrivals and guest nights in four and five star hotels in 2004 is a signal of growing demand for higher quality services and accommodation facilites in Hungary. As a result, the share of top category hotels also showed a year on year increase. Three star hotels, on the other hand, registered a smaller increase in the number of arrivals and guest nights, whilst one and two star facilities registered a decline. The number of guest nights rose by close to a quarter at spa hotels (+22.8%) along with an increase of 16.9% in the number of guest nights, which is a historical record in terms of both domestic and foreign guest nights. Spa hotels registered over 655 thousand guests and around 2.5 million guest nights (13.2% of the total guest nights at commercial accommodation) last year. Wellness hotels received 155 thousand guests, who spent about 413 thousand guest nights there in 2004. Table 18 Average Length of Stay at Commercial Accommodation, 2002 2004 2002 2003 2004 2004/2003 (nights) % Hotels 2.9 2.9 2.8 96.7 5 star 2.6 2.6 2.6 98.1 4 star 2.9 2.8 2.7 95.4 3 star 2.9 2.9 2.8 98.7 2 star 3.0 3.0 2.7 92.8 1 star 3.3 3.5 3.7 107.4 Spa hotels 4.2 4.0 3.8 95.3 Wellness hotels - - 2.7 - Guesthouses 2.5 2.4 2.4 99.4 Tourist hostels 2.7 2.6 2.6 100.9 Youth hostels 3.2 3.1 2.9 93.3 Bungalows 3.5 3.5 3.3 94.9 Camping sites 5.0 4.7 4.9 103.1 Total 3.0 2.9 2.9 96.9 Guests stayed 2.9 nights on average at commercial accommodation in 2004, with the average length of stay of foreign guests at 3.2 nights and that of domestic guests at 2.5 nights (Table 18). Camping sites recorded the longest length of stay (4.9 nights) last year. Average length of stay was 3.8 nights in spa hotels, 3.7 nights in one-star hotels, 3.3 nights in bungalows and 2.8 nights in hotels (Figure 19). Average length of stay was longest, and surpassed the national average in the Lake Balaton Region (4.3 nights), the Northern Great Plain Region (3.2 nights) and the Lake Tisza Region (3.0 nights). The shortest stays were registered in Northern Hungary (2.3 nights) and the Southern Great Plain Region (2.4 nights). Average length of stay was 2.5 nights in Budapest and the Central Danube Region and in Southern Transdanubia. Average Length of Stay at Commercial Accommodation, 2004 (nights) 3,4 3,2 3,0 2,8 2,6 2,4 2,2 2,0 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0 Figure 19 January February March April May June July August September October November December 22

Most of the guests stayed at commercial accommodation for leisure (56%), on a business trip (20%) or when attending a conference (12%) and to receive spa or medical services (6%). Hotels show a similar distribution of main purpose of visit (Table 19). Table 19 Main Purpose of Visit, 2002-2004 (%) Main purpose of visit Leisure/ Conference Other Health Other Total Holiday Business tourism 2002 Commercial accommodation 64 13 23 - - 100 Hotels 59 16 25 - - 100 2003 Commercial accommodation 60 12 23 5-100 Hotels 53 15 26 6-100 2004 Commercial accommodation 56 12 20 6 6 100 Hotels 52 15 22 7 4 100 In 2004, room occupancy at commercial accommodation facilities was 38.0%, representing an increase of 5.5%. From among the various types of accommodation, four and five star hotels had the highest occupancy rates (58.2 and 60.5%, respectively). The average rate of occupancy in hotels was 46.4%. Camping sites recorded the lowest occupancy rates at 10.6% in 2004 (Table 20). Two regions recorded exceptionally high room occupancy rates above the national average in 2004: the commercial accommodation units in Budapest and the Central Danube Region with 53.6% (including the occupancy rate for Budapest at 57.1%), and the Lake Balaton Region with 40.0%. % Occupancy Rates of Commercial Accommodation Facilities by Tourist Region, 2004 Table 20 Hotels Guesthouses Tourist and Youth Hostels* Bungalows Camping sites** Total 2004/ 2004/ 2004/ 2004/ 2004/ 2004/ % % % % % 2003 (%) 2003 (%) 2003 (%) 2003 (%) 2003 (%) 2003 (%) Budapest and the Central Danube 57.6 114.6 27.4 105.2 32.2 115.3 17.8 91.0 4.7 106.1 53.6 115.0 From which: Budapest 59.3 115.1 31.9 105.7 34.4 115.1 5.8 47.2 3.3 82.9 57.1 115.3 Central Transdanubia 30.3 106.5 21.9 108.5 18.1 89.6 18.9 96.7 8.8 86.7 25.2 105.3 Lake Balaton 43.1 96.4 24.3 100.7 36.8 109.6 31.5 97.5 16.9 97.9 40.0 97.9 Lake Tisza 32.0 100.2 26.2 100.6 10.7 72.7 26.3 112.7 8.4 99.3 27.6 103.3 Northern Great Plain 44.1 100.1 23.1 103.7 15.2 90.4 23.4 86.0 13.6 101.8 34.7 100.3 Northern Hungary 31.6 99.3 19.7 98.1 18.4 100.1 21.1 91.6 6.5 84.7 24.3 98.8 Southern Great Plain 32.2 99.9 22.9 106.1 11.5 92.4 27.9 106.9 9.5 93.1 25.8 100.6 Southern Transdanubia 31.8 103.1 25.3 99.8 26.1 111.2 24.1 80.3 6.9 92.2 28.2 102.3 Western Transdanubia 42.6 99.9 18.9 85.1 13.0 103.0 31.0 93.7 6.4 99.2 30.5 97.4 Country total 46.4 106.1 22.7 98.9 20.0 101.1 26.0 95.5 10.6 96.7 38.0 105.5 * Combined due to data protection. ** Occupancy rates of tent places. 23

Revenues of Commercial Accommodation Facilities, 2004 (%) Table 21 Accommodation (domestic guests) Accommodation (foreign guests) Accommodation Total Food & Bevarage Other Services (including breakfast) Total Revenues (HUF million) 2004/ 2003 (%) (HUF million) 2004/ 2003 (%) (HUF million) 2004/ 2003 (%) (HUF million) Hotels 21,127 120.5 63,430 112.2 84,558 114.2 42,236 120.3 37,420 116.8 164,213 116.3 5 star 1,748 159.3 21,648 118.8 23,396 121.1 10,827 137.6 6,820 126.7 41,043 126.0 4 star 7,222 139.6 25,898 114.4 33,120 119.1 16,204 123.2 18,053 128.4 67,378 122.4 3 star 9,061 116.9 14,372 103.9 23,433 108.6 12,803 111.2 11,314 104.1 47,550 108.2 2 star 2,422 86.1 1,319 86.6 3,741 86.3 2,210 93.7 1,100 74.2 7,051 86.2 1 star 674 96.6 193 62.2 867 86.0 192 87.5 133 56.8 1,192 81.6 Spa hotels 4,202 138.4 10,017 104.7 14,220 112.8 8,615 125.1 11,386 121.0 34,220 118.4 Wellness hotels 1,392-946 - 2,338-2,100-2,527-6,964 - Guesthouses 4,730 107.9 2,810 93.2 7,539 101.9 8,354 111.7 1,295 120.2 17,188 107.7 Tourist hostels 1,127 100.4 128 102.9 1,255 100.7 260 90.3 74 93.3 1,588 98.5 Youth hostels 874 114.7 338 115.5 1,212 114.9 71 106.4 223 96.5 1,506 111.3 Bungalows 1,439 96.8 781 87.7 2,220 93.4 441 99.2 356 98.9 3,017 94.8 Camping sites 460 85.2 1,999 93.6 2,459 91.9 59 50.6 415 99.6 2,933 91.4 Total 29,757 115.2 69,486 110.4 99,243 111.8 51,420 118.2 39,782 116.4 190,445 114.4 Commercial accommodation facilities had revenues from accommodation fee at more than HUF 99 billion in 2004. Foreign guests generated 70% of these revenues and the remaining one third came from domestic guests. In addition to the accommodation fee revenues, commercial accommodation facilities had food & beverage revenue at HUF 51.4 billion and other revenue at HUF 39.8 billion. This amounted to a total revenue at HUF 190.4 billion in 2004 which represents 14.4% increase at current prices, meanwhile the consumer price index of the sector was 10.3% (Table 21). 280 270 260 250 240 230 220 210 200 190 180 Exchange Rates of HUF to EUR and USD, 2002 2004 EUR/HUF Figure 20 USD/HUF January February March April May June July August September October November December January February March April May June July August September October November December January February March April May June July August September October November December 2004/ 2003 (%) (HUF million) 2004/ 2003 (%) (HUF million) 2004/ 2003 (%) 2002 2003 2004 24

In December 2004, the average room rate in hotels surpassed HUF 11,700 which means an increase of 2.8% over the same period in 2003. During 2004, the highest average room rate was registered in May. Among hotels, the room rate of five-star facilities was between HUF 25,300 and 33,900, four-star hotels registered average room rates between HUF 10,300 and 15,000, meanwhile three-star units charged for a room between HUF 6,100 and 8,100 on average (Table 22). Average Room Rate* and Rate Index of Hotels, 2002 2004 Table 22 5 star 4 star 3 star 2 star 1 star Hotels Total Average Room Rate hotels 2004/2003 (%) (HUF) February 2003 28,399 10,363 6,508 5,634 4,383 10,115 100.4 2004 27,220 11,660 6,712 6,504 3,851 10,975 108.5 May 2003 30,597 13,979 7,271 5,615 4,695 11,379 98.6 2004 31,231 14,811 8,084 6,766 4,692 12,965 113.9 July 2003 25,432 12,865 7,780 6,377 5,603 10,394 107.0 2004 27,774 11,991 7,628 6,685 5,090 10,482 100.8 December 2003 26,297 12,561 7,669 5,868 5,255 11,418 108.0 2004 26,910 11,826 7,870 6,344 4,551 11,743 102.8 * Revenue per occupied room in hotels, independently of type of room. Number of guests and guest nights at private accommodations in Hungary According to data released by the Hungarian Central Statistical Office, private accommodation can provide an extra 245,000 beds in addition to the 315,000 beds available at commercial accommodation facilities. Nationally, domestic guest spent nearly half (47.2%) of the guest nights registered at private accommodation. 2004 was characterised by a clear preponderance of domestic tourism everywhere with the exception of the Balaton region. The share of domestic guest nights in the Southern Great Plain, Northern Hungary and the Lake Tisza regions was exceptionally high, above 80%. Although 30% of the domestic guest nights at private accommodation spent in Hungary were registered in the Balaton region in 2004, the territorial concentration of domestic tourism was less pronounced than that of incoming tourism. Western Transdanubia, the Northern Great Plain and Northern Hungary continue to be favoured by domestic tourists who choose private accommodation. The number of domestic guests at private accommodation showed an increase in all of the regions except for two: Budapest and Central Danube Region and the Lake Tisza. There was an extraordinarily dynamic rise in Central (+46.7%) and Western Transdanubia (+26.6%). Domestic guest nights were up 5.7% in the region of Western Transdanubia and 5% in the Northern Great Plain. Table 23 Capacity of Private Accommodation Facilities by Tourist Region, 2004 Units Beds Budapest and the Central Danube 1,442 7,292 From which: Budapest 740 2,821 Central Transdanubia 1,208 6,465 Lake Balaton 29,205 158,532 Lake Tisza 1,023 6,727 Northern Great Plain 1,962 13,308 Northern Hungary 2,294 14,441 Southern Great Plain 984 5,683 Southern Transdanubia 3,604 16,257 Western Transdanubia 2,167 11,671 Total 43,889 240,376 25

Measured in terms of the number of nights, the role of incoming tourism was outstanding in the Lake Balaton in the past year, where foreign guests took 72.7% share of all the guest nights. The same ratio approached almost 50% in Southern Transdanubia. The exceptionally high territorial concentration of incoming tourism demonstrates that the Lake Balaton can claim more than two-thirds of all foreign guest nights registered at private accommodation. The share of Western and Southern Transdanubia was also significant. The number of foreign guests rose dynamically in Central Transdanubia (+53.6%), in the Budapest and the Central Danube Region (+35.0%) and in Northern Hungary (+11.3%). Among destinations registering an increase in the number of guest nights, we can highlight Central Transdanubia (+8.4%) and the Southern Great Plain (+4.7%) regions. The average length of stay at private accommodation came to 4.5 nights in 2004, a figure that greatly exceeds the average of commercial accommodation establishments. Hungarians spent an average of 4.0 nights and foreigners 5.1 nights at private accommodation. In 2004 holiday checks generated HUF 418 million in income for private accommodation. The number of private accommodation providers accepting checks was 569. Table 24 Number of Guest Nights at Private Accommodation Facilities by Tourist Region, 2004 Foreign Domestic Total Guest nights Budapest and the Central Danube 76,399 116,275 192,674 From which: Budapest 55,190 39,295 94,485 Central Transdanubia 37,529 98,847 136,376 Lake Balaton 1,097,481 412,064 1,509,545 Lake Tisza 18,949 80,968 99,917 Northern Great Plain 101,016 166,513 267,529 Northern Hungary 33,228 161,317 194,545 Southern Great Plain 15,442 105,396 120,838 Southern Transdanubia 124,651 130,103 254,754 Western Transdanubia 127,902 190,144 318,046 Total 1,632,597 1,461,627 3,094,224 The Traveling Habits of the Hungarian Population in 2004 Commissioned by the Hungarian National Tourist Office, M.Á.S.T. Market and Opinion Survey Company in November 2004 carried out a research in the travelling habits of the Hungarian population. The random sample of 3,000 Hungarians over 18 years of age is representative in terms of county, settlement structure, gender and age. Respondents were interviewed personally in their homes. The study examined day trips, overnight trips and main holidays 7 taken between November 1, 2003 and October 31, 2004. During the period surveyed 61% of the respondent households reported a day trip. The frequency of excursions was the highest among the 18-24 and 31-40 year old respondents, families with children and people living in the statistical regions 8 of Central and Southern Transdanubia. Of the households that reported a day trip, 90% visited domestic destinations only, 7% travelled to both domestic and foreign destinations and 3% left for destinations abroad only. 60% of the households surveyed took an overnight trip between November 2003 and October 2004. The frequency of trips was higher among families with children and the residents of the statistical regions of Central Hungary and Southern Transdanubia. Of the households that reported an overnight trip, 67% visited domestic destinations only, 17% travelled to both domestic and foreign destinations and 16% left for destinations abroad only. 7 Day trip: a one-day trip without an overnight stay, when a member of the household spent less than a day in another settlement, and his/her purpose was not work or study. Overnight trip: a trip when a member of the household spent at least one night away from his/her place of residence, his/her purpose was not work or study, and the period spent away from home did not exceed one year. Main holiday: the major travel of the household in the given period which involved at least two members of the household (unless it is a single household). 8 Statistical regions are: Central Hungary, Central Transdanubia, Western Transdanubia, Southern Transdanubia, Northern Hungary, Northern Great Plain and Southern Great Plain. 26

44% of the respondent households, or in other words 73% of the travelling households took a main holiday. The frequency of such trips was higher in the age group of 25-30 year old people, among university and college graduates, families with children and the residents of the statistical region of Central Hungary. When asked why they failed to go on a main holiday, respondents mentioned financial reasons (51%), lack of time (17%) and family (11%) or health (8%) reasons. 64% and 36% of the trips were made to domestic and foreign destinations, respectively. Domestic trips Day trip features: 97% of the respondents took a domestic day trip (including 7% that made both domestic and foreign day trips) (Figure 21), one household made an average of 4 day trips; The most popular destinations were Budapest and the Central Danube Region with Southern Transdanubia and Lake Balaton as runner up (Figure 22); 55% of the day trips was taken during the summer months of June to August; Major motivations were visiting friends and relatives (VFR) (23%), relaxation (13%), and bathing/visiting a spa (11%); 33% of the respondents collected information before and/or during the day trip: the most important sources were brochures (45%), maps (32%), travel books (30%) and the Internet (26%). Past experience (32%) and information received from friends (29%) also played a significant role. Budapest and the Central Danube Southern Transdanubia Lake Balaton Central Transdanubia Southern Great Plain Northern Hungary Northern Great Plain Western Transdanubia Domestic Day Trips by Tourist Region, 2004 (%) Lake Tisza 0 2 4 6 8 10 12 14 16 18 17.7 17.2 2.2 6.8 11.2 11.2 10.1 9.9 Figure 22 13.8 Sources: Hungarian National Tourist Office / M.Á.S.T. Destinations of Domestic Day Trips, 2004 (%) Domestic 90 Foreign 3 Domestic and Foreign 7 Sources: HNTO / M.Á.S.T. Destinations of Domestic Overnight Trips, 2004 (%) Figure 21 Figure 23 Overnight trip features: 83% of the respondents took domestic overnight trips (including 16% that made both domestic and foreign overnight trips) (Figure 23), one household made an average of 3.3 overnight trips; Domestic 67 Foreign 17 Domestic and Foreign 16 Sources: HNTO / M.Á.S.T. 27

The most popular destinations of overnight trips were Budapest and the Central Danube Region, followed by Lake Balaton and Southern Transdanubia (Figure 24); The majority (70%) of overnight trips fell on the summer months of June to August; A domestic overnight trip lasted 3.6 nights on average with 73% of all the journeys lasting between 1-3 nights; Main motivations included relaxation (36%) and visiting friends and relatives (VFR) (27%); Figure 24 Domestic Overnight Trips by Tourist Region, 2004 (%) 0 5 10 15 20 25 30 Budapest and the Central Danube 25.7 Lake Balaton 19.5 Northern Hungary 13.3 Southern Great Plain 9.3 Southern Transdanubia Central Transdanubia Western Transdanubia Northern Great Plain Lake Tisza 2.7 8.3 7.5 7.0 6.7 Sources: Hungarian National Tourist Office / M.Á.S.T. The average cost of a domestic overnight trip came to HUF 25,000, with average daily spending at HUF 4,500; 42% of the respondents collected information before and/or during the trip: the most important sources were brochures (38%), past experience (34%), the Internet (30%), travel books (29%), experience of former visitors of the destination (29%) and maps (26%). Main holiday features: 64% of the main holidays were made to domestic destinations; The most popular destination was Lake Balaton, followed by Northern Hungary and the Budapest and the Central Danube Region (Figure 25); The most popular cities were Budapest, Hajdúszoboszló, Siófok, Balatonfüred, Balatonboglár and Sopron; 82% of the respondents had been to the destination of the main holiday previously, and the ratio of return visits was the highest (86%) in the case of trips to Budapest and the Central Danube Region; One-fifth of the respondents that took a main holiday had decided on the destination a month in advance, shorter periods were reported by 45% of the respondents; 40% of the main holidays fell on August, 29% was registered in July; 31% of the main holidays took less than 4 nights, 16.5% lasted a week. The average length of stay was 6.25 nights. Figure 25 Domestic Main Holidays by Tourist Region, 2004 (%) Lake Balaton 32 Northern Hungary 14 Budapest and the Central Danube 13 Northern Great Plain 10 Southern Great Plain 9 Southern Transdanubia 7 Western Transdanubia 6 Central Transdanubia 6 Lake Tisza 3 Sources: HNTO / M.Á.S.T. Figure 26 Accommodation Used During Domestic Main Holidays, 2004 (%) Private (free of charge) 38 Private (paid) 13 Second home 10 Guesthouse 8 Hotel 8 Camping site 7 Apartment 6 Company resort 6 Youth hostel 2 Tourist hostel 2 Camping out 1 Other 1 Sources: HNTO / M.Á.S.T. 28

The car (74%) was the most frequently used means of transport; In the case of 54% of the main holidays people stayed at unpaid accommodation (with friends/relatives or in second homes) or company resort. Hotels represented 8% (Figure 26); The participants organized 90% of the main holidays themselves; The most important activities during a main holiday included relaxation (88%), bathing/visiting a spa (51%), lakeside recreation (29%), visiting natural attractions (26%) and cities (26%) and visiting friends and relatives (VFR) (24%); 32% of the respondents who made a main holiday, gathered information before and/or during the holiday: the most important sources were brochures (41%), maps (33%), past experience (30%), the experience of former visitors of the destination (30%) and travel books (25%). 22% used the Internet; The average cost of a domestic main holiday was almost HUF 56,000, with average daily spending at HUF 4,500. Outgoing tourism Day trip features: 10% of the respondents took a day trip to a foreign destination (including 7% that left for both domestic and foreign day trips) (Figure 21), one household made an average of 1.27 day trips; The most popular destinations was Austria, followed by Romania and Slovakia (Figure 28); Figure 28 The Most Popular Destinations of Day Trips Abroad, 2004 (%) Austria Romania Slovakia Slovenia Croatia Bosnia-Herzegovina Ukraine Belgium Czech Republic The Netherlands Other 0 5 10 15 20 25 30 3 3 1 1 1 1 2 7 26 25 Sources: Hungarian National Tourist Office. / M.Á.S.T. 30 Costs of Domestic Main Holidays, 2004 (%) Figure 27 Meals 28 Accommodation 23 Travel 15 Entertainment 13 Shopping 9 Other 6 Travel Agency service 4 Transport 2 Sources: HNTO / M.Á.S.T. 15% of the day trips fell on May, and 45% was registered between August and October; Main motivations were shopping (42%), visiting a city (18%) and visiting friends and relatives (VFR) (15%); 47% of the respondents collected information before and/or during the day trip: the most important sources were brochures (34%), past experience (29%) and the experience of former visitors (29%). 18% used the Internet. 29

Overnight trip features: 33% of the respondents took an overnight trip abroad (including 16% that left for both domestic and foreign overnight trips) (Figure 23), one household made an average of 3.3 overnight trips; The most popular destination was Croatia, followed by Romania, Austria and Italy (Figure 29); Two-thirds of overnight trips fell on the summer months of June to August, including 27% in August; An overnight trip lasted 6.6 nights on average. 59% of all the journeys lasted between 1-6 nights; Main motivations were relaxation (27%) and visiting friends and relatives (VFR) (17%), followed by cultural attractions (9%); The average cost of an overnight trip came to HUF 122,000, with average daily spending at HUF 11,000; The Most Popular Destinations of Overnight Trips Abroad, 2004 (%) Croatia Romania Austria Italy Germany Slovakia Greece Spain Ukraine Czech Republic Other Figure 29 0 5 10 15 20 25 3 3 3 6 6 7 9 12 11 15 Sources: Hungarian National Tourist Office / M.Á.S.T. 25 73% of the respondents collected information before and/or during the trip: the most important sources of information included brochures (43%), travel books (36%), the Internet (36%), travel agencies (31%) and maps (29%). Main holiday features: 36% of the main holidays were made to foreign destinations (Figure 30); The most popular destinations was Croatia, followed by Romania, Greece and Italy (Figure 31); Decision making was mostly influenced by favourable natural characteristics (46%), pleasant climate (31%), price (28%), recommendations by relatives and friends (24%), culture (23%) and positive past experience (21%); More than half of the respondents that took a main holiday abroad had decided on the destination more than a month in advance; 34% of the main holidays fell on August, 22% was registered in July; 26% of the main holidays took less than 6 nights. The average length of stay came to 8.04 nights; Destinations of Main Holidays, 2004 (%) Figure 30 Domestic 64 Foreign 36 Sources: HNTO / M.Á.S.T. 30

The car (51%) was the most frequently used means of transport, followed by chartered buses (22%) and air travel (21%); 31% stayed at a hotel, apartments were used by 25% of the trips. 21% of the travellers stayed at non-commercial accommodation facilities (staying with friends and relatives, in second homes or at a company resort); The participants organized 59% of the main holidays themselves, travel agencies participated in organizing 35% of the main holidays abroad; The most important activities during a main holiday were relaxation (79%), visiting cities (54%), bathing/visiting a spa (51%), visiting natural (50%) and cultural attractions (49%); The Most Popular Destinations of Main Holidays Abroad, 2004 (%) Croatia Romania Greece Italy Slovakia Germany Spain Tunesia Austria France Jordan Other 0 5 10 15 20 25 22 12 11 11 4 4 4 4 4 3 3 18 Figure 31 Costs of Main Holidays Abroad, 2004 (%) Figure 32 Meals 31 Accommodation 14 Travel 13 Entertainment 13 Shopping 11 Other 10 Travel Agency service 5 Transport 3 Sources: HNTO / M.Á.S.T. Sources: Hungarian National Tourist Office / M.Á.S.T. 74% of the respondents gathered information before and/or the holiday: the most important sources were brochures (48%), the Internet (42%), travel books (39%), maps (35%), travel agencies (33%) and the experience of former visitors of the destination (31%); The average cost of a main holiday abroad was more than HUF 175,000, with average daily spending at HUF 11,000 (Table 25). Costs of Domestic and Foreign Day Trips, Overnight Trips and Main Holidays, 2004 (HUF) Table 25 Day trips Overnight trips Main holidays domestic foreign domestic foreign domestic foreign Total cost 11,140 23,216 25,070 122,280 55,795 175,139 Per capita spending 5,640 11,178 13,052 64,630 22,499 81,886 Daily per capita spending 5,640 11,178 4,508 10,884 4,459 10,706 Sources: Hungarian National Tourist Office / M.Á.S.T. 31

The Organizational Structure of Tourism in Hungary In many countries of the world tourism is managed by national, regional and local organizations that mutually complement each other. The same is true of Hungary: managing tourism is one of the responsibilities of many organizations ranging from Parliament to local governments. This chapter describes the organizations with national and regional competence, and their responsibilities in line with the structure effective on January 1, 2005. Parliament Parliamentary legislation is of prime importance in terms of both the development of tourism and the operation of businesses in the sector. Parliament legislates the acts that provide the framework for the operation of the sector. In Hungary, acts lay the economic foundations of tourism, for instance as regards tourism tax, or the support allocated in the central budget to tourism purposes. Some other legal institutions of importance in tourism, for instance the system of holiday vouchers (in social tourism), are also determined under law. Parliamentary Committee on Tourism The Parliamentary Committee on Tourism is a body responsible for initiating, proposing, and expressing an opinion about legislation and for controlling the actions of government. The most important responsibilities of the Tourism Committee involve initiating and monitoring tourism related legislation and proposed resolutions and asserting the interests of tourism in the legislative process. The Committee pays attention both to the enforcement and to the social impact of the acts in its competence. Furthermore, the Committee is in charge of supervising and controlling the way state institutions responsible for tourism fulfill their management. Its role is important, it may discuss any tourism related topic and may initiate actions to have the necessary measures taken. Parliamentary Committee on Tourism H-1054 Budapest, Széchenyi rakpart 19. Telephone: +36-1/441-5055 Fax: +36-1/441-5057 E-mail: ifb@parlament.hu Website: www.parlament.hu Chairman: LASZTOVICZA, Jenő Fidesz Vice-chairmen: dr. TOMPAl, Sándor MSZP dr. TÓTH, József MSZP NÓGRÁDI, László Fidesz Members: BÁNKI, Erik Fidesz CSIGE, Tamás MSZP dr. GRUBER, Attila Fidesz HADHÁZY, Sándor Fidesz HERBÁLY, Imre MSZP HERÉNYI, Károly MDF HORVÁTH, László Fidesz dr. KATONA, Béla MSZP KOCSIS, Róbert Fidesz KOVÁCS, Ferenc Fidesz KOVÁCSNÉ dr., HORVÁTH Klára MSZP KRÁNITZ, László MSZP dr. MÉZES, Éva SZDSZ NAGY, Jenő MSZP dr. NAGY, Imre MSZP NÉMETH, Zsolt independent PÁVA, Zoltán MSZP Abbreviations: Fidesz: Fidesz Hungarian Civic Union MDF: Hungarian Democratic Forum MSZP: Hungarian Socialist Party SZDSZ: Alliance of Free Democrats 32

Minister without Portfolio in Charge of Regional Development and Convergence The Minister without Portfolio in Charge of Regional Development and Convergence is responsible for the government's tasks associated with urban and regional development, tourism, construction and housing. Entrusting a single minister with regional and tourism development provides tourism with the benefit of applying the principle of regionalism more efficiently. This arrangement facilitates the operation of the regional institutions of tourism, i.e. regional tourism boards can perform their tasks more efficiently. The minister is also responsible for coordinating the interdepartmental and regional activities that arise from the very nature of tourism (i.e. it overlaps sectors), for determining the conditions of certain tourism activities, for defining the necessary trade requirements and the tourism related activities that require a license (official registration). The minister coordinates the implementation of tourism related tasks the government is obliged to pursue due to Hungary's EU membership. The minister maintains working relations with the trade organizations of tourism, i.e. trade associations. A political state secretary with general competencies assists the minister without portfolio in Parliament and in carrying out professional duties. The Minister without Portfolio in Charge of Regional Development and Convergence exercises owner's rights of the Hungarian National Tourist Office which is responsible for performing the national and regional tourism marketing activities. National Tourism Board The National Tourism Board (Országos Idegenforgalmi Bizottság, OIB) was established by the Minister of Industry and Trade on February 1, 1996. Since January 12, 2005 OIB has been acting as a consulting body of the Minister without Portfolio in Charge of Regional Development and Convergence. The members of the Board represent major trade organizations of the sector and regional tourist committees. The Board participates in preparing the decisions on the principles of the strategy for developing tourism. It submits proposals to modernize the system of governance and the structure of organization of tourism, to develop the strategy for developing international relations in tourism and to award medals for trade distinction. It expresses an opinion about the directions and principles of the tourism appropriation, the objectives and means of tender calls, the marketing strategy of the Hungarian National Tourist Office and the tourist regions, the proposed principles of the development strategy, the economic and legal regulations governing tourism and the conditions created. The Board monitors and evaluates the development of domestic and international tourism, the trends in public demand for tourism, the development of tourism Prime Minister's Office, Minister without Portfolio in Charge of Regional Development and Convergence dr. KOLBER, István H-1014 Budapest, Hattyú utca 14. Telephone: +36-1/441-7106, +36-1/441-7107 Fax: +36-1/441-7102 E-mail: kolber.istvan@meh.hu Website: www.meh.hu Prime Minister's Office, Political State Secretary PÁL, Béla H-1012 Budapest, Vérmező út 4. Telephone: +36-1/487-6021 Fax : +36-1/487-6022 E-mail: bela.pal@meh.hu Website: www.meh.hu The Chairmen of Regional Committees on Tourism Balaton Regional Committee on Tourism: ROSTA, Sándor Budapest and Central Danube Regional Committee on Tourism: RUSZNÁK, Imre Central Transdanubia Regional Committee on Tourism: SZABÓ, Gábor Lake Tisza Regional Committee on Tourism: KEREKES, László Northern Great Plain Regional Committee on Tourism: TÓTH, József Northern Hungary Regional Committee on Tourism: NAGY, Imre Southern Great Plain Regional Committee on Tourism: TOKAJI, Ferenc Southern Transdanubia Regional Committee on Tourism: GONDA, Tibor Western Transdanubia Regional Committee on Tourism: PATYI, Elemér 33

research and the training of tourism professionals, the social policy effects of tourism, the development of the international relations of tourism, other topical issues related to tourism. Furthermore it delegates members, upon request, to the adjudication boards of tenders invited centrally; maintains contacts with the trade organizations and with regional tourist committees. Members of the National Tourism Board Voting Members Chairman of the National Tourism Board President and Vice-president of the Hungarian Tourist Authority Chairman of the Board of the Hungarian National Tourist Office and the representatives of the following trade organizations: Coordination Council of Tourist Regions Federation of Hungarian Event Organizers Association of Hungarian Travel Agents and Tour Operators Hotel Association of Hungary Hungarian Caterers Guild Hungarian Society of Tourism National Federation of Catering and Tourism Employers National Federation of Hungarian Youth Hostels National Federation of Rural and Agricultural Tourism Trade Union of Catering and Tourism National Tourism Board Chairman: dr. WOLFF, Péter Secretary General: dr. FARAGÓ, Hilda H-1012 Budapest, Vérmező út 4. Telephone: +36-1/488-8680 Fax: +36-1/488-8681 E-mail: oib@hungarytourism.hu Members with consultative right Association of Tourist Consultants Hungarian Baths Association Association of Hungarian Tourist Guides Hungarian Chamber of Commerce and Industry Hungarian Ramblers Association Friends of Nature Hungarian National Gastronomy Association National Federation of Local Governments Organization for Tourism Coordination Tourist Association of Counties Permanent invitees Chief Executive Officer, Hungarian National Tourist Office Head of Division, Service Statistics, Hungarian Central Statistical Office Secretary General, National Tourism Board Hungarian Tourist Authority The Hungarian Tourist Authority (HTA) is an administrative body that reports to the government and is supervised by the minister without portfolio in charge of regional development and convergence. Setting up the HTA on January 1, 2005 underlines the importance of tourism in Hungary and brings recognition to the trade as this national body of state administration is an independent legal entity and is the highest level authority assigned to manage tourism on behalf of any government so far. 34

The HTA submits proposals to the minister regarding the development of the short, medium and long term objectives of tourism, elaborates the concept of tourism policy, including the development and marketing concept. The HTA has the right to act on behalf of the shareholder of the Hungarian National Tourist Office. In addition to operating the domestic system of subsidies, the HTA cooperates in the elaboration of the programs designed to support tourism in the European Union. It is drafting the National Tourism Development Strategy in line with the planning period of the European Union. The document, which sets the priorities of developing tourism for the period 2005-2013, has entered the last round of wording and was adopted by the National Tourism Board in January, 2005. The HTA maintains relations with the institutions of the European Union and the work of international tourist organizations. The HTA has a working relationship with educational institutions and non-governmental organizations. Hungarian Tourist Authority President: dr. SOMOGYI, Zoltán Vice-president: dr. KOVÁCS, Miklós H-1012 Budapest, Vérmező út 4. Telephone: +36-1/225-6506 Fax: +36-1/225-6509 Website: www.mth.gov.hu Hungarian National Tourist Office The Hungarian National Tourist Office (HNTO) is the national marketing organization of tourism which has a single shareholder, the Prime Minister's Office. The HNTO was set up as a legal successor of the National Tourist Office (Országos Idegenforgalmi Hivatal, OIH) on March 1, 1994 under the name Hungarian Tourism Service (Magyar Turisztikai Szolgálat). The name was modified to Hungarian National Tourist Office on January 1, 1996. The main objective of the Hungarian National Tourist Office is promoting Hungary's tourism attractions and service and thereby contributing to the increase of receipts realized in Hungary from domestic and international tourism. That helps create jobs in the Hungarian economy, contributes to the balanced development of the GDP of the country and influences favourably the current account of the balance of payments. The objectives are attained by: building and improving the image of Hungary, raising awareness of the country as a tourist destination in Hungary and abroad, providing unbiased assistance to help Hungarian tourism companies to penetrate domestic and foreign markets, supporting regional cooperation in tourism marketing, PR and promotion in Hungary and abroad, providing tourist information to domestic tourists and foreign visitors staying in Hungary, to potential travellers, to decision makers and to Hungarian and foreign tourism professionals. The Hungarian National Tourist Office performs its tasks with reliance on its head office and its domestic network, including Regional Marketing Directorates and Regional Tourist Project Offices, its foreign representations and the Tourinform network, which operates in a franchise system. Hungarian National Tourist Office Chief Executive Officer: dr. GALLA, Gábor H-1012 Budapest, Vérmező út 4. Telephone: +36-1/488-8700 Fax: +36-1/488-8600 E-mail: mtrt@hungarytourism.hu Website: www.hungary.com HNTO Board of Directors Chairman: dr. NIKLAI, Ákos Members: KARÁCSONY, Mihály MESZTER, László SZÉKELY, György dr. VASS, György dr. WOLFF, Péter HNTO Supervisory Board Chairman: RUSZNÁK, Imre Members: MORVAINÉ, Lovas Erzsébet SZÉKELY, Ferenc KARDOS, Endre KOBULEJ, Angéla Domestic Networks The regional marketing directorates (RMD) operating in the seven tourist regions of the country and the two regional tourist project offices (RTPO) play an important role in developing domestic tourism. 35

Regional offices are responsible first of all for strengthening the identity of each region, the convergence of rural Hungary, raising awareness of the countryside and for motivating regional service providers to develop and maintain top quality tourist products. Providing unbiased assistance to service providers to penetrate the market is another priority. To achieve these goals, RMDs and RTPOs maintain relations with the local service providers and regional organizations, participate in product development and in the drafting of brochures, represent the region and regional service providers at domestic and international tourist exhibitions and participate in managing and evaluating tender applications. Budapest and the Central Danube Region Marketing Directorate H-1061 Budapest, Liszt Ferenc tér 11. phone: +36-1/479-0158, fax: +36-1/479-0149 e-mail: rmipest@hungarytourism.hu website: www.budapest-regio.hu Central Transdanubia Regional Marketing Directorate H-8000 Székesfehérvár, Piac tér 12 14. phone: +36-22/370-051, fax: +36-22/370-063 e-mail: rmiagard@hungarytourism.hu website: www.kdregio.hu Lake Balaton Regional Tourist Project Office H-8230 Balatonfüred, Blaha Lujza u. 2. phone: +36-87/342-801, fax: +36-87/342-871 e-mail: rmibalaton@hungarytourism.hu website: www.balaton-tourism.hu Lake Tisza Regional Project Office H-5350 Tiszafüred, Kossuth tér 1. phone: +36-59/351-753, fax: +36-59/351-753 e-mail: rmitiszaro@hungarytourism.hu website: www.tisza-to-info.hu Northern Great Plain Regional Marketing Directorate H-5000 Szolnok, Sóház utca 8. phone: +36-56/516-110, fax: +36-56/516-116 e-mail: rmiszolnok@hungarytourism.hu website: www.eszakalfoldi.hu Northern Hungary Regional Marketing Directorate H-3300 Eger, Dobó tér 9. phone: +36-36/512-440, fax: +36-36/512-446 e-mail: emrmi@hungarytourism.hu website: www.nordtur.hu Southern Great Plain Regional Marketing Directorate H-5700 Gyula, Erkel tér 1. phone: +36-66/521-020, fax: +36-66/521-024 e-mail: darib@hungarytourism.hu website: www.pusztaregion.hu Southern Transdanubia Regional Marketing Directorate H-7621 Pécs, Megye utca 4. phone: +36-72/514-620, fax: +36-72/310-067 e-mail: ddrmi@hungarytourism.hu website: www.deldunantul.hu Western Transdanubia Regional Marketing Directorate H-9400 Sopron, Új utca 4. phone: +36-99/512-594, fax: +36-99/512-598 e-mail: rmisopron@hungarytourism.hu website: www.nyugatdunantuliregio.hu The offices of the Tourinform-network in Hungary are the centres of providing up-to-date tourist information about the tourism supply of the country, the tourist service providers and current events. The Tourinform Network In 2004, the Hungarian National Tourist Office operated three Tourinform offices in Budapest. The Tourinform Office in Sütő utca, the first of its kind in the country, has an average turnover of 1,000 visitors a day, which makes it the busiest information center in Hungary. Terminals 2A and 2B at Ferihegy Airport receive about 250 flights from all over Europe and 36

overseas every day. The two Tourinform offices there function as a gateway for passengers arriving here by air, who are provided with useful information immediately upon leaving the aircraft to help them find their way about and to make their stay in Hungary smoother. Last year, the airport offices provided information to 500 tourists a day on average. As of January 1, 2005, the office in Sütő utca and those at Terminals 2A and 2B at Ferihegy Airport are operated by the Budapest Tourism Office. This arrangement resulted a uniform standard of providing tourists who visit the capital with the necessary information and services. The HNTO is also responsible for the technical supervision of the national network, whilst the offices themselves are operated by local governments. In 2004, five new Tourinform offices were added to the network at various locations across Hungary, bringing the total to 149 offices by the end of the year. In 2004 the Hungarian National Tourist Office was operating 19 foreign representations in 17 countries and maintained information offices to provide professional service to the public in three additional countries. Close to 2.5 million visitors called on Tourinform offices in 2004, the offices of the network received nearly 400 thousand phone calls, and responses were given to almost 50 thousand questions received in writing. Like in previous years, Tourinform help desks were set up at several events in 2004 (e.g. May Day of Museums, Formula1 Hungarian Grand Prix, Budapest Waterfront/Plage). Foreign Network The representations are responsible for raising awareness of Hungary as a tourist destination, improving the image of the country in Hungary's most important and emerging source markets. To achieve these objectives, representations issue and distribute market-specific brochures, participate in exhibitions and fairs and carry out promotion and PR activities. Their websites offer comprehensive information to the general public wishing to travel to Hungary and to tour operators programming trips to Hungary. The representations maintain close relations with the local media and tourism professionals and organize study tours and press conferences. 37

The Activities of the Hungarian National Tourist Office in 2004 Dear Colleagues! General opinion supported by statistical data confirmed that 2004 was a year of recovery for Hungarian tourism. Tourist professionals look to the Hungarian National Tourist Office with the hope of positive changes after years of stagnation and even a slight decline in tourism, and expect to witness the continuation and strengthening of its marketing efforts, which showed definite signs of improvement starting in 2002. Although the tourism in Hungary also suffered from the crises that affected the tourism sector globally, the year 2004 have brought the long awaited revival of the Hungarian tourism. EU accession offered an ideal opportunity to the national tourism marketing organization. We are pleased to conclude that the Hungarian National Tourist Office could seize that opportunity: the campaign featuring Miss Europe 2004 generated increasing interest amongst EU member states. The success of Magyar Magic, another important series of cultural events organized last year in the UK, cannot be separated from that process since presenting the diversity of Hungarian culture contributed to an increasing influx of visitors from the UK. The focus on Europe was coupled with another priority: gaining market share in overseas markets (e.g. the United States, Japan and China), where the slogan 'European Quartet One Melody' was communicated widely in cooperation with the Visegrad Four countries (the Czech Republic, Hungary, Poland and Slovakia). Moreover, we launched a Budapest campaign in North America which resulted a significant increase in the number of American visitors. To boost domestic tourism, we continued the campaign known as 'Itthon otthon van' ('You Are at Home Here') and the series of actions designed to promote Hungary's 'Great Lakes'. We are certain that the health tourism campaign we launched in 2003 and continued in 2004 also contributed to the massive increase in arrivals and guest nights at spa hotels. It is a special pleasure that the market share of German arrivals in spa hotels reached more than 50 percent of the total foreign arrivals. In 2004 Hungary hosted ten meetings of tourism professionals from different countries, as a result of intense lobbying. Furthermore, the Conference Ambassador Program we launched early on in 2004 will be a key factor in turning Hungary into an even more attractive conference destination. To summarize, we are convinced that the sector, including the Hungarian National Tourist Office has every reason to continue optimistically with its intensive marketing efforts in 2005. Budapest, February 15, 2005 Gábor Galla, dr. Chief Executive Officer Hungarian National Tourist Office 38

The Focuses of the Marketing Communication Raising awareness and improving the image of Hungary as a tourist destination, Budapest, Lake Balaton, health tourism and MICE, particularly conference and incentive (C&I) tourism were in the focus of the marketing activities abroad of the Hungarian National Tourist Office. The marketing messages for domestic communication kept health tourism, event tourism and increasing the popularity of holiday vouchers in focus. In addition to the main source markets that play an important role in the marketing activities of the HNTO (i.e. Germany, Austria, Italy, France, the USA and the UK), the Netherlands, Denmark, Russia, Poland, Japan and China have also been given priority as markets representing significant growth potential. The marketing communication abroad presented the tourism supply of Hungary through five regions (Budapest and Surroundings, Lake Balaton, Puszta and Lake Tisza, the Hilly Wine Region of Eger and Tokaj and Pannonia/Transdanubia), while domestic promotion was based on nine tourist regions (see General Information). Image of Hungary as a Tourist Destination The image of Hungary as a tourist destination cannot be separated from the general image of the country. Its improvement is an important longterm priority of the HNTO. The political, economic, social, cultural, natural and technical environment also influence the tourist image of the country. The complexity of this image requires the use of a variety of image building methods, which in the case of the HNTO contains a wide array of marketing communication tools addressing both the general public and the tourism professionals. According to the research findings, the most significant elements of the image of Hungary as a tourist destination include its rich historical heritage and the communist past, almost in all of the source countries. That Hungary once was a part of the Austro-Hungarian Monarchy is a known historical fact in several countries. The hospitality of Hungarians is considered to be a noticeable and uniformly positive component, whilst Hungarian being a difficult language is mentioned by many as a negative aspect. Budapest is the most widely recognized attraction followed by the Danube and the Lake Balaton. Regarding the country's geographic location, the image is predominantly Eastern European as compared to Central European. In addition to hospitality, the landscape and nature are typical elements of the image of Hungary, the beauty of As of 2000 the Hungarian National Tourist Office launched studies of the image and awareness of Hungary as a tourist destination in Hungary's most important and emerging source markets. Primary research covered France and Spain in 2000, Belgium in 2001, Italy in 2002, Poland and the UK in 2003. Researching awareness and image continued in 2004 with market studies in the USA, Germany, Austria and the Netherlands. 39

Hungarian scenery and the natural treasures are uniformly known in almost every source market. Culture, including traditions, folk art, music and architecture are also important components in the image of the country. People who had been in Hungary think the country is rich in traditions and has charming sights, interesting towns, characteristic cuisine and pleasant, hospitable people. Hungarian food and wines, dishes like goulash, or paprika, the most characteristic spice used in Hungarian cuisine, are the most frequently mentioned image creating elements among people knowledgeable about Hungary. Hungary has rich and colorful culture with traditions, historic buildings and customs left behind by several cultures in the past one thousand years. Many see the country as a bridge between East and West. Attracting millions to the country, the hospitality, unique culture, traditions and customs of Hungarians are a perfect match for the countless historical relics and monuments from almost every age. The EU enlargement on May 1, 2004 offered excellent opportunities for the Hungarian National Tourist Office to introduce and promote Hungary in the most important source countries. Popular TV programs, widely read dailies, weekly and monthly papers reached millions with news and information about business opportunities, culture and customs in the ten accession countries. This improved the visibility of Hungary at the time of accession and is likely to become more prominent in the years to come. Budapest Budapest is Hungary's most important, internationally recognized tourist destination. Millions visit the Hungarian capital every year attracted by the unique geographic location, the historical buildings and monuments of the city that embraces the Danube, its World Heritage Sites, its cultural vigor, its spas, the convention and exhibition facilities and the favourable value for money ratio. No wonder Budapest is a focal point in the marketing activities of the HNTO. The capital and its surroundings also feature as a popular stop-over in tours of Central Europe. The richness and variety of cultural entertainment, especially major annual events, such as the Budapest Spring Festival, the Island Festival and the Budapest Opera and Ballet Festival attract multitudes to the capital of Hungary. Cultural programs, as well as gastronomic delights and world famous Hungarian wines, are additional attractions for a lot of foreign visitors during their stay. The internationally acclaimed historical spas that draw on the unique resource of medicinal waters below the city are likely to enjoy even more visibility and popularity in the years to come as a result of a series of reconstruction projects. Based on the results of the image studies, Hungary is associated first of all with picturesque Budapest, its rich historical heritage, monumental architecture and multifaceted culture. Branded as truly cosmopolitan, Budapest owes its unique character to its breathtaking panorama, the Danube and the abundant resource of medicinal waters. The Danube and the bridges spanning it fill the city with a sense of romance. Of the sights of Budapest, foreigners are typically familiar with the Castle District, the Opera, Parliament, Heroes' Square, the Dohány Street Synagogue, Margaret Island and Gellért Bath. Foreign visitors say Budapest 'is a large city of human scale and is a must for a tourist', it has 'so much to see', has 'everything one can imagine', it 'is alive' and is also 'charming'. 40

Spa development has coupled with other important capital investment projects in tourism, mostly hotel construction, to further improve the high standard of services. Measured by the number of beds, Budapest claims roughly one third of the hotel capacity available in the country. Hotels represent the vast majority (78.6%) of commercial accommodation capacity in Budapest, with 29.5% share of four-star and 27.4% share of three-star facilities (Figure 33). The supply of hotel rooms in the city covers every segment of demand and keeps growing. Among other establishments, a new five-star hotel, Four Seasons Gresham Palace Budapest opened last year, raising the number of five-star facilities in the capital to 13. Budapest is the hub of transportation by public road, rail and air in Hungary, which is why the capital is often the first stop for tourists with destinations elsewhere in the country. Ferihegy Airport, Budapest's air terminal, which is now accessible from 96 cities on flights operated by close to fifty airlines, registered 6.5 million passengers in 2005, representing an increase of 1.5 million over a year earlier. The number of passengers taking low cost flights rose dynamically in 2004 to reach one million, i.e. one in six passengers chose to fly by a low cost carrier. Budapest and the surroundings had excellent results in 2004: the arrivals at commercial accommodation establishments in the capital rose by 18.6%, and the number of guest nights surpassed the level of 2003 by 16.7%. Capacity of Commercial Accommodation in Budapest, July 2004 (%) Figure 33 5 star hotels 16.7 4 star hotels 29.5 3 star hotels 27.4 2 star hotels 3.3 1 star hotels 1.7 Guesthouses 5.0 Tourist hostels 4.2 Youth hostels 4.9 Bungalows 0.2 Camping sites 7.0 Figure 34 Guest Nights Generated by Key Source Markets 9 in Budapest, 2003-2004 (%) 0 5 10 15 20 25 30 35 40 45 50 55 60 65 % United Kingdom 589 10 Japan Italy France Spain Israel Germany Finland 197 602 359 319 257 3440 142 The Netherlands USA 416 462 Austria Sweden 721 176 Foreign total 5201.9 The significance of the number of tourists visiting Budapest in Hungarian inbound tourism is indicated by the number of foreign guest nights, nearly the half (49.5%) of which occurred in the capital in 2004. Eight out of ten arrivals at commercial accommodation in 9 Source markets generated at least 100 thousand guest nights in 2004. 10 Number of guest nights, 2004 (000s). 41

Budapest were generated by foreigners, and the number of foreign guest nights in the capital in 2004 was up 19% on 2003. Arrivals from the EU represent close to 60% of the guests nights. The most important source markets for the capital kept growing in 2004. Most of the growth concentrated in the number of UK guest nights (63.8%), with significant increases observed also in the Japanese (+31.2%), Italian (+30.3%), Spanish (+27.0%), French (+27.0%) and German (+20.2%) market segments (Figure 34). In 2004, Budapest's commercial accommodation facilities had room revenues of HUF 53.9 billion (corresponding to 54.3% of total revenues at commercial accommodation facilities), over nine-tenths of that revenue was generated by foreign guests. The Budapest and Central Danube Region is one of the most popular destinations for domestic tourists (Table 26) as well. 11 The information concerning the methodology of the research can be found in chapter The Traveling Habits of the Hungarian Households. Table 26 Main Features of Day Trips, Overnight Trips and Main Holidays to the Budapest and the Central Danube Region, 2004 11 Role of the region in domestic tourism Demographic features of visitors to the region Motivation Day Trips Overnight Trips Main Holidays 33% of the tourists who made a day trip visited the region (the most important destination) 17.7% of all day trips (2,176) visited a destination in the region (the most important destination) age groups 31-40, 41-50 and 18-24 secondary school graduates university, college graduates residents of the statistical regions of Central and Northern Hungary visiting friends and relatives (27%) relaxation (13%) trip to the mountains (12%) visiting cities (11%) 23% of the tourists who made an overnight trip visited the region (the second most important destination) 26% of all overnight trips (1,285) visited a destination in the region (the most important destination) age groups 25-30 and 51-60 university, college graduates people with lower level of income residents of the statistical regions of Southern Transdanubia, Central Hungary, Northern Great Plain and Northern Hungary relaxation (46%) visiting friends and relatives (30%) 13% of all main trips (110) visited a destination in the region (the third most important destination) age groups 18-24 and 51-60 pensioners single member households people with lower level of income residents of the statistical regions of Central Hungary and Northern Great Plain relaxation (38%) visiting friends and relatives (34%) visiting cities (5%) Per capita spending HUF 4,900 HUF 9,800 HUF 13,000 Daily per capita spending HUF 4,900 HUF 3,600 HUF 3,500 Sources: HNTO / M.Á.S.T. 42

Following the Lake Balaton Region and Northern Hungary, Budapest and the Central Danube Region was the third most popular destination of domestic main holidays in 2004. One-third of the tourists made a decision on the destination of the main holiday 1-2 weeks in advance. More than half (58%) of the main holidays to Budapest and the Central Danube Region fell on the summer months of July-August, with a quarter of the trips lasting 3 nights. Most of the main holidays (more than twothirds) were made by car. The majority of visitors to the region stayed at private accommodation or in their second homes. The tourists organized the vast majority (94%) of main trips themselves. The most important activities during the main holiday were relaxation, visiting friends and relatives (VFR), visiting cities and natural attractions, bathing/visiting a spa, gardening, lakeside holiday, shopping and visiting cultural attractions. Tourists were extremely satisfied with their main holiday and awarded scores higher than 4 to each component of the tourist services of the region on a scale of 1-5. Lake Balaton Lake Balaton is the largest warm water lake in Central and Western Europe and the region surrounding the lake, along with its 164 settlements, is one of the most popular destinations for both inbound and domestic tourism. Tourism in the region is relied on the lake and the high quality tourist products offered on the basis of natural and cultural heritage. Aquatic sports, refurbished or newly constructed marinas offering services of international quality and the bicycle path encircling Lake Balaton are important components of the tourism supply besides lakeside holidays. Recent years' developments have added a wide array of elements to the leisure, sports, culture and gastronomic program options of the region. There are 10 wine route societies in the 5 wine regions around Lake Balaton. The Association of Lake Balaton Wine Routes unites these societies and has certified members who offer a variety of programs and wine tasting. Relying on the local natural environment, health tourism has become a flagship product of the region in the wake of recent investments into tourism infrastructure. The supply side includes traditional spas and newcomers: wellness hotels, which cater first of all for keeping you in good health, and family spas with a choice of aquatic delights for the whole family. The natural treasures of the lake and the surrounding area have been protected under the auspices of the Balaton Uplands National Park since 1997. The park has developed new trails and is dotted with demonstration sites to offer tourists direct insight into the natural attractions. The structure of the accommodation facilities in the region has shown significant changes in recent years. The number of commercial 43

accommodation units in the Lake Balaton Region increased substantially between 1998 and 2004: close to one third of the capacity is new. In 2004, visitors to the Lake Balaton could choose from altogether 19 four-star hotels equipped with wellness and conference services, including new four-star facilities that opened last year. Figure 35 Guest Nights Generated by Key Source Markets at Lake Balaton, 2004 (%) In addition to the 93 thousand beds at commercial accommodation facilities, there is an outstanding supply of private accommodation in the region: bed and breakfast operations claim nine out of ten beds in the total private accommodation capacity of 160 thousand beds, while the remaining one tenth of the private capacity is associated with rural tourism. Furthermore, second homes have a substantial role in the tourism of the Lake Balaton Region: foreigners have purchased close to 10,000 second homes around the lake in recent years. Lake Balaton and the surrounding area offer leisure programs to everyone, the shallow southern side is especially attractive for families with small children. At present family holidays at the lakeside make up the supporting pillar of tourism near Lake Balaton. No wonder the HNTO gives priority to addressing 30-50 year-old parents with children and young adults in its marketing communication. Germany 60.3 Austria 10.0 Denmark 8.1 The Netherlands 6.9 Switzerland 2.1 Russia 1.6 Other foreign 11.0 The Lake Balaton Region played an extremely important role in tourism in Hungary: it was the second most popular destination in Hungary both in terms of the number of arrivals and guest nights at commercial accommodation. It registered 15.5% of the arrivals last year; and its share of the total number of guest nights was 23.1%. In 2004, the split between domestic and foreign guest nights spent in the region was 41.9% to 58.1%. Foreign guests stayed on average 6, and domestic guests stayed on average 3 nights at commercial accommodation. The average length of stay came to 4.3 nights, which is over the national average and is the highest among the tourist regions. The most important source markets for the Lake Balaton Region were Germany, Austria, Denmark, the Netherlands, Switzerland and Russia, with tourists from these countries representing close to 90% of total foreign guest nights in 2004 (Figure 35). The Lake Balaton Region is the most popular destination of domestic tourism. Domestic tourism at the lake is positively influenced by special packages, weekend and family activities developed by lakeside hotels. The region is increasingly preferred as a venue for domestic MICE events as well. The Lake Balaton was the most popular destination of domestic main holidays in 2004 (Table 27). A quarter of the travellers made a 44

Main Features of Day Trips, Overnight Trips and Main Holidays to the Lake Balaton Region, 2004 12 Table 27 Role of the region in domestic tourism Day Trips Overnight Trips Main Holidays 19% of the tourists who made a day trip visited the region (the third most important destination) 32% of the tourists who made an overnight trip visited the region (the second most important destination) 33% of all main trips (279) visited a destination in the region (the most important destination) 13.8% of all day trips (1,697) visited a destination in the region (the third most important region) 26% of all overnight trips (939) visited a destination in the region (the second most important region) Demographic features of visitors to the region age groups 31-40, 18-24 and 25-30 active wage earners families with three of four members residents of the statistical region of Central Transdanubia age groups 18-24, 31-40 and 25-30 secondary school, university and college graduates families with four members residents of the statistical regions of Central and Southern Transdanubia, Central Hungary and Central Transdanubia age groups 31-40, 25-30 and 18-24 secondary school, university and college graduates families with three or four members residents of the statistical regions of Southern and Western Transdanubia and the Southern Great Plain relaxation (56%) bathing/visiting a spa (26%) Motivation bathing/visiting a spa (34%) relaxation (17%) visiting friends and relatives (15%) relaxation (50%) bathing/visiting a spa (22%) Per capita spending HUF 5,000 HUF 18,300 HUF 27,000 Daily per capita spending HUF 5,000 HUF 4,600 HUF 4,600 Sources: HNTO / M.Á.S.T. decision on the destination a month in advance. The majority (84%) of the main holidays fell on the summer months of July-August, a quarter of them lasted 6 nights. Most of the main holidays (about eighty percent) were made by car. The majority of travellers to the region stayed at private accommodation or at second homes. The tourists organized the vast majority (almost 90%) of main holidays themselves. The most important activities during the main holiday were relaxation, bathing/visiting a spa, visiting natural attractions and cities, shopping and entertainment. Tourists were extremely satisfied with their main holiday and awarded scores higher than 4.3 to each component of the tourist services of the region on a scale of 1-5. 12 The information concerning the methodology of the research can be found in chapter The Traveling Habits of the Hungarian Households. 45

Health Tourism Due to the even in international comparison unique wealth of thermal and medicinal waters in the country, health tourism is a significant element of Hungary's tourism supply. Traditional spas dating back to hundreds of years ago and recent capital investments into constructing new and restored old spas have strengthened both foreign and domestic demand. Besides cures and medical services, the products/services of wellness tourism are becoming increasingly popular, especially among domestic guests. Unique natural resources and the wide array of related high quality services coupled with the favourable value for money ratio generate a high proportion of return visits. The vast resources of thermal waters in Hungary and spas feature heavily in the image of the country as a tourist destination. The advantages of health tourism over other forms of tourism: the spending (especially on medical/wellness services) and average length of stay are both high; guests purchase a wide variety of services; demand shows no seasonality and is ensured by aging societies; selecting a destination/service providers is based on trust, which generates a high rate of return visits; and it requires trained staff. Based on the results of the image studies on the German market, many German tourists are familiar with the spas of Budapest and the town of Hévíz. A visit to a thermal spa is one of the favourite activities during a stay in Hungary. Tourists from Austria are mostly motivated to come to Hungary to purchase wellness services and treatments or to visit a spa. In their opinion, Hungary's strength in this segment is the rich supply of medicinal waters, the long years tradition of spas and their good reputation. Polish tourists are also attracted by the hot springs although there is a preference among them for family spas. Tourists from the United States of America fancy historic spas just like the Italian visitors. There are altogether 1,289 hot springs in Hungary. Spas with thermal or medicinal waters are operated in 385 settlements. There are 57 spa hotels, 38 settlements with qualified medical baths, 5 therapeutic caves, 13 health resorts, 81 recognized sources of mineral water and 315 springs of medicinal water, 4 deposits of therapeutic mud and 1 mofette. Figure 36 Share of Guest Nights at Spa Holels by Source Country, 2004 (%) Health tourism relies on exploiting these natural resources, which are unique in Europe and globally. Health tourists are fundamentally motivated by improving their health or healing (medical tourism) or by staying healthy and preventing illnesses (wellness tourism). The choice among tourist services based on natural healing factors, such as medicinal waters, therapeutic caves, microclimate, therapeutic mud, tends to be in favour of the medical element which is complemented by 'traditional' tourist services and attractions. The services of medical tourism in Hungary are typically recommended for curing rheumatic and locomotor diseases, as well as for respiratory, circulatory and digestive disorders. The complex services of wellness tourism, which has become increasingly popular and fashionable in recent years, seek to improve physical condition and fitness and to protect spiritual well-being simultaneously. The fact that most of the services are based on natural healing factors speaks in favour of wellness tourism in Hungary. Germany 30.2 Austria 8,1 Switzerland 2,4 United Kingdom 1,6 Italy 1,4 Japan 1,4 United States of America 1,4 France 1,2 Russia 1,2 Other foreign 10,6 Hungary 40,5 46

The significance of capital investments in health tourism (drawing on HUF 30.9 billion of government subsidies) is illustrated clearly by the 2,500 new jobs created by 100 projects representing total capital investment at HUF 89 billion. There were 29 subsidized capital expenditure projects implemented in 2004, and 11 new facilities are scheduled for 2005. The statistics of 2004 easily support the effectiveness of the international and domestic health and wellness tourism campaign launched by HNTO in the fall of 2003: Hungarian medical and spa hotels recorded dynamic growth in arrivals and guest nights. The number of arrivals and guest nights in 2004 surpassed the level reached in the corresponding period in 2003 by 22.2% and 16.9%, respectively. Foreign guests generated 59.2% of the guest nights, and the number of foreign guest nights rose 8.9% during 2004, along with a corresponding increase of 31% in the number of domestic guest nights (Figure 36). The key source markets of spa hotels included Germany (representing 50.8% of foreign guest nights), Austria (13.7%), Switzerland (4.1%), United Kingdom (2.6%), Italy (2.4%) and the USA (2.3%). Based on the number of guest nights, each of the source countries showed signs of growth, except for Switzerland, and the growth rates of the UK and the USA were outstanding. Close to 150 thousand registered guests spent a total of 410 thousand nights in Hungarian wellness hotels in 2004. In terms of the number of arrivals and guest nights the ratio of domestic tourists came to 74.0% and 57.5%, respectively. MICE The Hungarian National Tourist Office gives priority to conferences and incentive tourism (C&I) from among the components of business tourism or in other words MICE (Meeting, Incentive, Conference, Exhibition). Conference tourism in Hungary offers a series of advantages in contrast with other forms of tourism. Spending is higher and length of stay is longer among tourists who travel to attend conferences than among leisure tourists in general. Conference guests are leading representatives of their trade hence business tourism also triggers growth in other sectors; moreover a conference organized in Hungary boosts the visibility and appreciation of the country. Conferences help stretch the high season and offer hotels the advantage of predictability. People on business trips tend to return to the same destination as leisure tourists, which is another advantage of business tourism. Budapest has extremely good facilities to host conferences and to serve as a destination of incentive trips. The favourable location of the country makes Hungary easily accessible. The airport has direct connections to 47

most metropolitan areas in Europe. Thermal waters, historical spas and luxurious wellness services could complement a variety of conferences and congresses in Hungary. Hungarian cultural events and festivals are internationally recognized: for instance the Budapest Spring Festival or wine festivals to name only a few. Hungarian dishes and drinks of international acclaim, the wide selection of excellent Hungarian wines flavor the time spent in Hungary with culinary delight. Highly experienced professional congress organizers (PCOs) and event venues guarantee the delivery of top quality services that stand international comparison. Tourists on a trip to Hungary may choose from among the superb services of 13 five star and 38 four star hotels in Budapest. New congress centers and conference hotels have been built in the countryside in Keszthely, Sopron, Szeged, Siófok, Balatonfüred and Eger, whilst 2005 and 2006 will expand the facilities eligible for conference tourism in Pécs, Balatonalmádi and Debrecen. Table 28 Conferences Themes in Hungary, 2002-2004 (%) 2002 2003 2004 Medical Sciences 28 26 21 Business (& Economics) 28 28 26 Scientific Research 28 22 17 Transportation 4 3 3 IT 7 4 5 Tourism 5 5 4 Other - 12 24 Source: Hungarian National Tourist Office An analysis of the main purpose of visit of hotel guests in 2004 shows that 37% of the guests travelled on business: 15% attended a conference, whilst 22% had some other business related reason to stay. That ratio was even higher in four and five-star hotels, with 38% of the guests of the former and 52% of those staying at the latter type of accommodation travelling on business. The results of conference tourism's performance in Hungary in 2004 show lower volume that coupled, however, with better and more favourable Monthly Distribution of Conferences and Exhibitions, 2002 2004 Figure 37 70 60 50 40 30 20 10 0 January February March April May June 2002 2003 2004 July August September October November December Source: Hungarian National Tourist Office tourism parameters as the decline in the number of events coincided with an increase of the average number of participating nations, the length of stay, the number of other events 13 and the ratio of foreign participants. 13 Other events include meetings held with less than 50 participants or with participants representing less than 3 nationalities. 48

The number of conferences commissioned by Hungarian, UK and Belgian parties rose and Germany, the UK, France, Austria and the USA generated most of the conference related arrivals (Table 28 and Figure 37). Meeting venues in Hungary, particularly in Budapest, are traditionally popular MICE destinations and rely on positive circumstances and good value for money. Data published by ICCA (International Congress and Convention Association) show that Budapest ranked number 9 among the most popular conference towns 14 in the world in 2004. That achievement can also be attributed to Hungary's positive image, high quality accommodation facilities and also to experienced Hungarian program organizers. In Hungary, the distribution of conferences by venue is different from the international pattern. Whilst 48% of all conferences are held in congress centers globally, the same rate in Hungary is a mere 12%. Most conferences (seven out of ten) are organized in a hotel, as compared to the global rate of 36%. 6% of Hungarian conferences are held at universities in contrast with 13% globally. Hungary was placed 22nd on the list of most popular conference meeting destinations 15 on a global list published by the Union of International Associations (UIA) in 2004, which corresponds to a market share of 1.4%. The UIA ranks Budapest as the 11th on a list of towns that host international meetings, i.e. 1.1% of all international meetings were organized in the Hungarian capital. Event Tourism A variety of cultural, sport, gastronomy or other events feature heavily in Hungary's tourism supply. Arts festivals are especially noteworthy as the increasing frequency indicates mounting foreign and domestic interest in Hungarian cultural heritage or in the performances by artists or ensembles invited to a festival to represent the cultural values of another nation there. Different events, one-off or in series, play an important role in forging a typical and positive image of Hungary, as they allow Hungary to enjoy public recognition and have the power to increase the awareness of the destination. As these segments are difficult to be reached by traditional marketing tools, the Hungarian National Tourist Office supports the events with a variety of tools depending on the nature of the event, including TV programs, a monthly tourist supplement, and a page with program recommendations accessible at the HNTO web-site. Taking type and target audience into account from the perspective of the HNTO, events can be classified into the following groups. Events of both national and international importance enrich significantly the tourism supply of a tourist region. In this way these events can contribute to the increase of tourist spending and the length of stay. 14 The meetings of international organizations ICCA uses as a basis for its ranking include events held by rotation in a different country each time (at least three country) with a minimum of 50 participants. 15 UIA defines meetings of international organizations as gatherings where at least 300 people are present, foreign participation reaches a minimum of 40%, the number of participating nations is at least five and the duration of the event is at least three days. 49

As the most prestigious and monumental arts festival in Hungary, BSF is an annually organized event just before the tourist season in spring each year. The BSF takes place for the 25th time in 2005 and is expected to present Hungarian culture through special performances, including shows of famous stars. Budapest Spring Festival (BSF), Budapest Visitors of the festival can choose from close to 200 events, among them classical music concerts, theatre performances, arts exhibitions and open air shows. Although the festival is based in Budapest, several cities in the countryside joined the initiative by organizing spring festivals: Debrecen, Gödöllő, Győr, Kaposvár, Kecskemét, Pécs, Sopron, Szentendre and Szombathely. Dozens of dazzling flower decorated floats move down the streets of Debrecen on August 20, each year, the day commemorating Hungary's statehood. The floral compositions are awarded by a jury of professionals and the public. The awarding ceremony is followed by a show with different ensembles and bands. During the some days lasting Flower Carnival visitors can see performances of foreign and Hungarian dance ensembles, brass bands and marching bands, banner artists and shows by street artists, photograph exhibition, beer festival and a variety of further musical performances. Music has filled Dome square in front of Sacramental Church in Szeged every summer for the past 70 years. Debrecen Flower Carnival and Carnival Week, Debrecen Szeged Open-air Festival, Szeged Spectacular operas, classical and modern ballet, musicals, tempestuous folk dance evenings and other performances charm and enchant around 4,000 spectators each year. Events created for a special segment offer effective channels of addressing a target audience to promote tourist products and to communicate information. This festival in the valley of arts has been organized each year for close to two decades. The objective of the event is to present Hungarian culture in tiny villages dotting the hills north of the Lake Balaton. Visitors can choose from 50 venues and 800 performances, including classical theatre, dance and other open-air performances, religious, folk and cosmopolitan music, jazz, film and fine arts, crafts fairs, folk dancing, children programs and "Green Arts Shows" committed to conserving nature and environment. Nature, architecture and cultural heritage in the region, clean air and quiet countryside coupled with the festival's spirit of protecting and creating value guarantee unforgettable experiences. Organized for the first time in 1993 on a gem of an island embraced by the River Danube, which divides the capital, Island Festival is widely recognized across Europe as a multicultural event for the young, and turns the green Island in Óbuda into the home for 400,000 visitors each summer. The 'inhabitants' of the Island Festival find everything Valley of Arts, Kapolcs, Monostorapáti, Öcs, Pula, Taliándörögd, Vigántpetend Island Festival, Budapest 50

required for the operation of a small town. International stars, the most popular Hungarian musicians and promising talents entertain the fans of different musical trends at 50 locations; but there are also movie shows, theatre performances, dance theatre, concerts of classical music, extreme sport facilities, exhibitions and children programmes. The visitors of the Island come from Budapest (40%), the countryside (40%) and abroad (30%). When joining an international event organized in Hungary, the main goal involves utilizing the emphatic presence of the international press and television coverage to present the country to the specific target audience. Distributing brochures at the event itself serves to provide participants with tourist information and to make their stay in Hungary more pleasant, so as to increase the number of return visits. Organized at Hungaroring in Mogyoród each year since 1986, Formula-1 Marlboro Grand Prix is an event in Hungary that attracts a huge number of foreign visitors in itself. World famous drivers do their best to bring speed and forces under control to amaze a crowd of over two hundred thousand spectators year after year, and eventually the best and the most fortunate will claim victory. Formula-1 Marlboro Grand Prix, Hungaroring, Mogyoród Holiday Vouchers of Social Tourism The national tourism organizations and decision makers, including the HNTO, keep increasing the emphasis on developing domestic tourism each year, as the competitiveness of a destination in international tourism is strongly influenced by a strong internal travel market. These efforts have led to a substantial recent increase in the number of people applying for holiday vouchers and the number of service providers accepting them. Hungary introduced the system of holiday vouchers as part of the social tourism scheme on January 1, 1998 replicating a scheme that had been operated successfully in France for decades. The regulations in effect since January 1, 2003 increased the non-taxable value of holiday vouchers, an instrument of remunerating employees in kind, Act CXVII of 1995 on Income Tax specified holiday vouchers issued by the Hungarian National Holiday Foundation (HNHF) as form of tax exempt in-kind benefit. Holiday vouchers are issued by the National Holiday Service, an entity owned by the HNHF, and can be used as a cash equivalent to pay at accommodation facilities and travel agencies that signed an agreement with the Service. At present, holiday vouchers are accepted by about 2,100 establishments (hotels, boarding houses, bungalows, private accommodation facilities, youth hostels and camping sites) and 400 travel agencies. 51

from HUF 20,000 to the value of the statutory wage minimum, in effect from time to time (HUF 53,000 on January 1, 2004). It granted employers 100% exemption, replacing the former 50%, from the payment of voucher related tax. Social Tourism, 1999 2004 Table 29 1999 2000 2001 2002 2003 2004 Value of Holiday Vouchers (HUF million) 2078.0 2050.8 1803.1 2313.0 4850.0 7465.0 Number of Reciepients 130,342 119,973 90,275 115,000 174,000 291,831 Source: HCSO/HNHF The value of holiday vouchers purchased by employers in 2004 reached HUF 7.4 billion, which is almost 1.5 times higher than its was a year earlier. In 2004, employers supported close to 300 thousand employees go on holiday, whilst the Hungarian National Holiday Foundation ensured holiday vouchers for further 13 thousand socially handicapped employees, pensioners and their families (Table 29). Figure 38 Use of Holiday Voucher by Type of Accommodation, 2004 (%) The number of facilities/service providers accepting holiday vouchers grew to reach 2,700 last year and since March 1, 2004, holiday vouchers may be used to pay for accommodation and related services (food, medical treatment, sports) as well as for transportation (water - Balatoni Hajózási Rt., bus - Volánbusz Rt., rail - Magyar Államvasutak Rt. and the Győr- Sopron-Ebenfurt Vasút Rt.) for journeys to and from the vacation venue. Data of the Hungarian Central Statistical Office reveal that the value of holiday vouchers accepted at commercial and private accommodation facilities approached HUF 5.0 billion during the last year. In 2004, holiday vouchers generated around 17% of the revenues of commercial accommodation in domestic tourism. Most of the vouchers (32.4%) were used in three star hotels, making them the most popular service providers. Of the holiday vouchers revenue at commercial and private accommodation, 16.9% was registered at camping sites, 14.2% at guesthouses, 8.3% at bungalows and 7.7% at private accommodation facilities (Figure 38). Hotels 51.5 Camping sites 16.9 Guesthouses 14.2 Bungalows 8.2 Private accommodation 7.7 Youth hostels 1.0 Tourist hostels 0.5 Sources: HCSO/HNHF As of January 1, 2005, the per-capita value of tax-exempt entitlement to holiday vouchers rises to HUF 57,000. In this way employers can save about HUF 360 thousand by issuing holiday vouchers to each person in a family of four. The value of holiday vouchers sold to institutions/employers in 2005 is likely to surpass HUF 10 billion. The Hungarian National Holiday Foundation will spend further HUF 1.2 billion - four times the amount in 2004 - on subsidizing the holidays of the socially handicapped which will help close to 100 thousand people go on a holiday. The objective of using holiday vouchers will widen in 2005 as the vouchers will also be accepted by art festivals. 52

Campaigns In the framework of the domestic campaign, HNTO published its tourism supplement under the title 'Itthon otthon van' ('Here You are at Home') once a month in 2004. Each issue featured a specific theme (e.g. cultural tourism) and was published in 140,000 copies supplemented to popular dailies (Magyar Nemzet, Magyar Hírlap and Napi Gazdaság) and a Sunday paper (Vasárnapi Hírek). Tourinform offices and local municipalities distributed 20,000 additional copies. Domestic The HNTO uses regular electronic media appearances as an efficient tool in its domestic PR. In 2004, two non-commercial television channels, MTV 1 and MTV 2, broadcasted a review of current events entitled 'Itthon otthon van' as part of their morning and evening programs Napkelte and Napnyugta every day. As of June 2004, the up-to-date information about current events and programs is also accessible at HNTO website. In April 2004 a three-month campaign at the web sites Index, Euro.hu, Origo and Travelport accompanied the renewed HNTO websites (www.itthon.hu, www.hungary.com) launched in March 2004. The online campaign contained advertising like sponsorship, PR articles, banners and super banners. Like in 2003, with the objective of promoting family holidays, five regional marketing directorates - the Lake Balaton and the Lake Tisza Regional Tourist Project Offices, the Regional Marketing Directorates in Southern, Central and Western Transdanubia - organized the 'Great Lakes' road show in 11 TESCO hypermarkets of the country in May and June, 2004. In the campaign of the Hungarian National Tourist Office promoting lakeside family holiday, the following lakes of significant importance in domestic tourism participated: Lake Balaton, Lake Fertő, the Orfű Lakes, Lake Tisza and Lake Velence. Press articles accompanied the road show to promote Hungary's largest lake, Lake Balaton. Advertisements on cultural and sports events around the lake were placed in five nationwide newspapers - 168 Óra, Színes Mai Lap, Családi Lap, Nők Lapja Évszakok and Hölgyvilág - between May and September, 2004. As part of the campaign, PR articles were published coupled with the Lake Balaton spot broadcasted on 580 occasions on 43 local television channels. 72 towns, 154 villages and 5 Budapest districts with a total of 236 applications participated in the environmental program 'Tiszta Magyarországért' ('Clean Up Hungary') announced by the Hungarian National Tourist Office jointly with two ministries: the Ministry of Environment and Water and the Ministry of Economy and Transport. The main objective of the initiative was to help the organizations motivate the public (with support from schools, non-governmental organizations and municipalities) to clean up their environment. Regional juries with members from the representatives of the program initiator The total population of participating cities and villages was 3 367 394 persons, including 118 510 people actively participating in the program. The volume of garbage removed from 457 sq km reached 21,461 tons. 53

and other environmental organizations awarded certificates and cash prizes to seven towns, one Budapest district and fourteen villages. The Hungarian chapter of 'Entente Florale', a competition with the objective of planting flowers, landscaping and decorating the environment, was organized for the 11th time in 2004 jointly by the Ministry of Interior, the Ministry of Agriculture and Regional Development, the Ministry of Economy and Transport, the Ministry of Environment and Water, the Ministry of Education, the Ministry of Cultural Heritage, the Municipality of Budapest and the Hungarian National Tourist Office. A total of 351 cities and villages participated in the contest. Two awarded cities, gold medal holder Kaposvár and silver medallist Balatonszárszó represented Hungary in the 'Entente Florale' international competition in 2004. Thanks to the very active involvement, Hungary will host the award ceremony of the international competition in 2005. The event will be held in the city of Győr. The health tourism spot Hungary Keeps the World Healthy was shown on 100 occasions on the international television channels Eurosport and Eurosport-News during the Budapest Figure Skating European Championship in February, 2004. The spot, which claimed international success, also won special recognition from prize of the jury (Prix Director VZP (BAD)) at the 37th International TOURFILM Festival held in Karlovy Vary. The health tourism campaign also included quarterly publications of advertisements and PR articles in CNN Traveller Magazine. International 21 European television channels showed the Hungary spot at the beginning of each broadcast of the Indoors Athletic World Championship held in Budapest in March, 2004. Hungary's accession to the European Union played an important role in marketing communication in 2004. The one month campaign called 'With Miss Europe to the European Union' was launched on April 15 to highlight the accession on May 1, 2004 with the participation of Ms. Zsuzsanna Laky, winner of the 'Miss Europe' contest in 2003. The campaign included 303 billboards at 15 airports in eight European countries. HNTO cooperated with the Budapest Tourism Office in further advertising like outdoor poster and supplements entitled 'Hungary and the European Union', which were published in Newsweek, International Herald Tribune, Financial Times, Stern and Handelsblatt. As part of the campaign, the Hungarian National Tourist Office in cooperation with the Ministry of Foreign Affairs participated in several presentations in Austria, Belgium, the Czech Republic, Sweden, France, Ireland, Poland, Germany, Romania, Spain and Switzerland. These events culminated in the EU accession festival in Brussels on May 1st, 2004 and the monumental 'Day of Welcomes', which the Irish presidency of the European Union by rotation hosted. During 2004 Hungary's presence at tourist exhibitions and fairs included an EU corner where 54

visitors received up-to-date information about the European Union and Hungary's accession. In cooperation with the low cost airline SkyEurope, the campaign included furthermore an airplane decorated with the photograph of Miss Europe. 303 billboards at the busiest airports of Belgium, Denmark, the United Kingdom, France, the Netherlands, Ireland, Germany and Italy. The Budapest spot featuring Tony Curtis, the world famous film star of Hungarian descent, was shown on more than 1,400 occasions between May 24 and June 5, 2004 on ten of the most popular television channels in the United States: CNN, CNBC, Bravo, History, A&E, MSNBC, Travel Channel, Fox News, Food Network and Discovery. The spot highlights the architectural heritage and the vivid cultural scene of Budapest, a city with an abundance of historical treasures. Furthermore the spot introduces the gastronomic delights of the country. The spot highlights the following slogan: Budapest: a city to visit, a city to live. The spot reached 3.5 million people/potential tourists representing the group of 50+ year old US citizens who represent an important segment regarding leisure tourism. Tony Curtis's visit to Hungary to shoot the film enjoyed vivid interest by the international media and the actor's stay in Hungary was covered by the domestic media as well as the international printed and electronic press and several TV and radio channels: there were about 280 news in the media covering the shooting and the spot in the United States alone. The television campaign was accompanied by four advertisements which the New York representation of HNTO placed in the trade magazine Travel World. Visitors to the web site of the representation at www.gotohungary.com may access the spot and pictures as well as the interviews with Tony Curtis. As part of the campaign, tourism professionals in North America received a newsletter and direct mail was used to reach the potential visitors/general public, both including the slogan: Hungary is 'The Next Hot Destination'. In 2004, Hungarian National Tourist Office cooperated with the organizers of the Island Festival to promote the event, which included advertisements and commercial spots placed in German, Czech and Polish newspapers/press and the international music television channels MTV and VH1. A 7 minute commercial spot about Hungary's tourist attraction was completed in September, 2004. Entitled 'Hungary - Smiles', the spot won 'Special Recognition for Creative Tourist Presentation' at the 7th International TOURFILM Festival organized in Split in October, 2004. During 2004 the spot has been shown at several exhibitions and fairs, professional meetings, press conferences and presentations. 55

Exhibitions, Fairs and Events In 2004, the Hungarian National Tourist Office presented Hungary's tourism supply at more than 25 domestic tourist exhibitions and events throughout the country. Domestic The 13th 'Welcome to Hungary' workshop took place in the Budapest Congress Centre on March 17, 2004 with the participation of 69 Hungarian exhibitors and 202 foreign tour operators. Professionals could attend a conference with presentations where up-to-date information was provided about the following themes which play an outstanding role in the marketing activities of the HNTO: Budapest, Lake Balaton, C&I and health tourism. The Hungarian National Tourist Office presented the country's tourism attractions in the framework of a new concept at the Travel Exhibition ('Utazás') organized between 18th and 21st March, 2004. It meant that the tourism supply of the country was not presented at several but on one central stand. The stand was located in the centrally placed Exhibition Hall 'B', where exhibitors could receive visitors on a 3,000 sq m floor space. The exhibition stand incorporated a corner called 'Technology 2004' to present HNTO innovations, including inter alia a new online database (ON-TIR) with the latest tourist information. Furthermore a desk was designated to receiving visitors interested in the Hungarian chapter of 'Entente Florale'. Based on the experience of the successful series of presentations introducing the tourism supply of tourist regions in Budapest (initiated in 2003 by the Hungarian National Tourist Office and the Association of Hungarian Travel Agents and Tour Operators), in 2004 the HNTO launched a new initiative under the title 'Region of the Month - in the Region'. Its main objective was to present the tourist attractions and services of the nine tourist regions of the country. Participants received information on the tourism supply of Northern Hungary in April, of Lake Balaton in May, of Central and Southern Transdanubia in June, of the Northern Great Plain and Lake Tisza in July, of Central and Western Transdanubia in September, of the Southern Great Plain in October and of Budapest and the Central Danube Region in December. The events designated first of all to travel agencies programming domestic trips and to representatives of the domestic press were highly successful. The feedback from close to 300 trade participants in the events revealed that places of interest in the tourist regions, smaller attractions and sites that tour operators find difficult to access, less known accommodation facilities, restaurants and other services of high quality represent new and marketable products that could be merged into a program package, and thereby serve to enrich the tourism supply of the regions. Similarly to the 'Region of the Month - in the Region' initiative, domestic travel agencies, tour operators and tourism journalists participated in the 'Tourist Product of the Month' events during 2004. The events were held at various locations depending on the theme and included presentations. HNTO and recognized professionals/experts provided the latest information regarding the different tourism products. 72,348 visitors from 30 countries attended the Travel Exhibition. The number of trade visitors topped 3,150. Vajdahunyad castle: fortresses, castles, mansions and fortifications; Kogart Gallery: world heritage sites, national parks, narrow gauge railways; Hajógyári Island: aquatic, bicycle and equestrian tourism; Hotel Hilton (Buda Castle District): religious tourism, historical cities; the Wine Cellars of Budafok: wine and gastronomy tourism. 56

The HNTO announced the contest 'Tourism Thesis of the Year' for the third time in 2003. A total of 30 competing thesis were received from six universities and colleges. A jury including experts nominated by four organizations called upon by HNTO (State Secretariat in charge of tourism in the Ministry of Economy and Transport, the National Tourism Authority, the National Tourism Board and the HNTO) evaluated the submissions. The Awards Ceremony was held on June 15, 2004, when the prizes were presented by Mr Béla Pál, Political State Secretary in charge of tourism. The thesis were awarded in two categories: 'Thorough, Scientific Research Work' and 'Novel Topic' and it also awarded five special recognition prizes. The Hungarian National Tourist Office and Turizmus Ltd. organized the Business Travel Show for the second time on October 27-28, 2004. Held in the Budapest Congress Centre, the event offered several programs to tourism service providers and corporate customers. In the two day event more than one hundred exhibitors participated, including luxury hotels, wellness and castle hotels, meeting venues, catering facilities/restaurants, professional congress organizers (PCO) and event managements, exhibition organization and implementation companies, travel agencies and airlines. Representing the large and medium sized companies in Hungary, business travellers, executive directors, HR directors and training managers of congress participated in the event as corporate customers. On the invitation of the HNTO, about 100 delegates of international incentive houses and corporate tour operators visited conference and incentive venues in Budapest. The total number of hosted buyers increased significantly, reaching over 1,300 persons in 2004. The 'Spa' Health Tourism Trade Show, Conference and Fair was organized in the cooperation of the HNTO and Geomédia Co. for the third time on November 12-14. The very successful exhibition intended to be the most comprehensive presentation of health tourism services in Hungary. 180 tourism companies presented their medical and wellness services on about 1,000 sq km of floor space. More than two hundred trade visitors from 12 countries attended the three day exhibition. The 4th Culture and Tourism International Conference and Trade Fair, the Wellness Sport Active Exhibition and the Golf Business Forum were other highlights of domestic trade events with Hungarian National Tourist Office's active participation in preparations and management in 2004. In 2004 the Hungarian National Tourist Office participated in a total of 159 exhibitions abroad which meant an exhibition area of about close to 7,500 sq m. During 2004 the uniform image of exhibition stand was modernized which meant developments regarding both the form and the content of the attractions. Unique and colorful attractions at several points of the stand included body and china painting from Herend, grinding paprika and food and wine tasting from wooden casks. Presented for the International 57

first time at the BIT fair in Milan, the 'Danube Promenade', including the statuette of the 'Little Princess', which has become one of Budapest's symbols, was a great success. The 'guest of honor' series launched in autumn 2003 in Germany, the most important source market of Hungary continued in 2004. Hungary was granted guest of honor status at several exhibitions including those in Mannheim, Stuttgart, Karlsruhe, Hannover, München and Darmstadt. The events were coupled with Hungarian receptions and press conferences. The Experidance Ensemble, the Rajkó Gypsy Ensemble and the BM Duna Art Ensemble took the stage on several occasions. In 2004 the Hungarian National Tourist Office participated in almost 200 exhibitions (100 with fixed and 100 with mobile stand) and 500 events, welcoming 8 million visitors. During the exhibitions 1.4 million brochures were distributed. HNTO gives special attention to the Chinese market. Among the marketing activities focusing on the Chinese market, exhibitions played an outstanding role in 2004. Hungary's tourism supply was presented at three important fairs in China in 2004: the World Travel Fair in Shanghai in cooperation with the Visegrád Four Countries in February, the Beijing BITE in July and the Shanghai CITM in November. Hungarian presence at one of the most significant international tourist exhibitions, the Berlin ITB held in March 2004 was emphasized by an illustrious press conference, a traditional Hungarian reception and a stage show. The Hungarian stand featured wine tasting, body and china painting from Herend, 'Little Princess' pantomime and grinding paprika. The fourth European Meeting Industry Fair (EMIF) was held in Brussels on March 17-18, 2004 with 500 exhibitors present from 40 countries. The Hungarian National Tourist Office built an independent stand to present Hungary's C&I services. This top priority Belgian MICE event attracted 5,200 visitors in 2004 including Belgian tourist professionals and an increasing number of stakeholders of the European Union. In the framework of hosted buyer programs, the EU-enlargement focused special attention on the accession countries. IMEX, the Worldwide Exhibition for Incentive Travel, Meetings and Events was held for the second time in Frankfurt on May 12-14 in 2004. It attracted around 2,500 exhibitors and 12 thousand trade visitors representing 130 countries. The event, which is the most prestigious gathering of the C&I professionals, has increased its floor space by 30%. Several conferences, meetings and receptions were held to add a touch of color to the program of the exhibition. One tenth of the trade visitors attending hosted buyer programs of 40 countries displayed an outstanding interest in the tourism services of the new member states that joined the EU in 2004. Hungary enjoyed guest of honor status at the 'Festival of Nations' held in Baden-Baden (Germany) in June, 2004. Besides the more than 170 twin city relations, the town has been affiliated to Hungary by another tie through the accession to the European Union on May 1, 2004. The Hungarian week was organized at the most appropriate moment to celebrate the 15th anniversary of opening the borders. That is why Mr Gyula Horn and Mr Hans Dietrich Genscher, ex-ministers of foreign 58

affairs were invited as guests of honor. Visitors to the festival could select from an array of excellent programs including shows by Jazz Quartet and the Danube Folk Dance Ensemble, as well as concerts of classical and light music and an exhibition of Herend china, each providing an excellent opportunity to present Hungarian culture. The town of Eger also introduced itself at the event. A sweep-pole well and a Hungarian restaurant enriched the Hungarian stand in the Kurpark of Baden-Baden. As part of Hungary's presence in the festival, a Hungarian folk dance ensemble entertained the spectators, Hungarian exhibitions opened and Hungarian shop-windows, flags and banners decorated the city. The HNTO brought three exhibitions to the festival focusing on Hungarian spas, the Pan European Picnic and the World Heritage Sites. Furthermore the HNTO operated a tourist information stand. Barcelona hosted EIBTM, one of the most important MICE event for the first time in 2004. More than 100 countries participated with a total of 2,000 exhibitors in this international event. The Hungarian National Tourist Office had a stand of 103.5 sq m to promote Hungary's C&I tourism supply with 15 participating Hungarian service providers, including ten professional congress organizers (PCO) and five hotels. One of the most prestigious exhibitions of the tourism sector, the London WTM was held in November 2004. The Hungarian stand covered 200 sq m and presented spectacular attractions, such as body and china painting from Herend, wine tasting, an exhibition of the puppet museum (including puppet making) in Abádszalók. The four-day exhibition, where 193 countries were present, the global tourism supply was presented on over 39.4 thousand sq m, and attracted 46,435 visitors. The Magyar Magic event in the United Kingdom was an especially important opportunity for presenting Hungary in one of Hungary s most important source markets in 2004. The venue was launched in late 2003 and lasted one year. The main organizer of the event was the Hungarian Cultural Institute, but several organizations cooperated in the programs, including the HNTO. Hungarian culture was presented e.g. through exhibitions, literary evenings, classical and light music and movies hosted in several cities in the UK. The initiative called 'The Year of Hungarian Culture' was organized in the Netherlands in 2004 and will go to Russia in 2005. International Trade Events in Hungary Thanks to the active presence of Hungarian National Tourist Office in the North American market, one of the most prestigious overseas trade organizations, the American Tourism Society (ATS) held its spring meeting in Budapest with about fifty US experts participating between 9 and 14 March, 2004. In March, 2004 Budapest hosted the meeting of the Visegrád Four countries (the Czech Republic, Hungary, Poland and Slovakia) where the representatives of participating countries agreed and signed the common marketing activities of the initiative 'European Quartet - One Melody' for 2004. 59

Collette Vacations, a top ten tour operator in North America, held its annual sales meeting in Budapest in April, 2004. One of the highlights of the program organized by HNTO was the marketing action in cooperation with the Hungarian Post Office that provided the American participants to send 7,500 postcards to their American partners. Carlson Wagonlit Travel, whose sales revenue exceeds USD 1 billion, which makes it one of the largest travel companies in North America, held its annual meeting in Budapest on May 21-23, 2004. The meeting attracted 90 participants including the owners and top management of leading travel agencies. Hungary hosted 40 leading professionals of the meeting industry from Central Europe at the meeting of the Central European Chapter of the International Congress & Convention Association (ICCA). The two day meeting organized on June 12-14, 2004 was extremely successful. The 18th Summer School of the European Federation of Conference Towns was held in Hungary between August 27 and September 1, 2004. Attendees to the meeting included young business tourism professionals from 49 towns representing 21 countries. The joint Seminar on Marketing Evaluation Methodologies organised by the European Travel Commission in collaboration with the World Tourism Organization, and hosted by the Hungarian National Tourist Office 2004 was an excellent opportunity for the travel trade to share their experience about the theme marketing evaluation methodologies. The event took place in one of Budapest's recently opened high category hotels at the end of September. More than fourty tourism professionals representing ten countries attended the two day seminar. Hungary had the opportunity to welcome travel trade representatives both from the public and the private sector, like NTOs, DMOs, tourism administrations, statistical offices, hotels, tour operators, attraction managers, other service providers, and consultants. Participants had the occasion to see several places of curiosity in Budapest as part of the leisure activities organized by the HNTO. Thanks to the active lobby activity of the HNTO New York representation, the Society of Polish American Travel Agents (SPATA) held its Annual Meeting in Budapest on October 3-9, 2004. The attendance of the Annual Meeting included one hundred members of the society set up in 1959 to unite American tourism professionals of Polish decent. Acquiring the right to organize the 3rd European Tourism Forum in Budapest on October 15-16, 2004 was a great diplomatic achievement on behalf of Hungary's tourism professionals. The HNTO cooperated with the Ministry of Economy and Transport to play an active role in preparing the event. The establishment of the European Tourism Forum dates back to a call issued by the European Commission in 2002. The Forum has been organized annually ever since and seeks, first of all, to promote cooperation between the parties engaged in tourism in Europe and to institutionalize the dialogue between the European Commission, the organizations 60

responsible for managing tourism and the trade organizations of the sector in the European Union. Tourism officials of the European Commission, the member states and representatives of European trade organizations of the sector addressed the challenges facing tourism and its present trends at the Budapest meeting. Representatives of 37 countries were invited to the Forum, where, employers and employees of more than one hundred European trade organizations and the bodies of trade unions were in attendance. Hungary was represented by the Parliamentary Committee on Tourism, regional tourist committees, the trade organizations, government departments, and delegates of the Hungarian Tourism Authority and Hungarian National Tourist Office. Detailed information about the forum is available at its website (www.etf2004budapest.hu) and on the CD of the proceedings. On the invitation of the Hungarian National Tourist Office, the European Travel Commission (ETC), the organization of 33 European national tourism organizations, held its autumn Annual Meeting and Board of Directors Meeting in Budapest on October 18-19, 2004. Participants of the Budapest Meeting discussed issues relating to the Internet portal of Europe (accessible at www.visiteurope.com) and other relevant issues of the member countries. Tourism professionals were invited by the HNTO to familiarize themselves with the tourism attractions and services of Budapest. Donau Werbung held its annual meeting in Budapest with 120 participants on November 18, 2004. Apart from the eight members of the organization uniting countries along the Danube (Germany, Austria, the Slovak Republic, Hungary, Croatia, Serbia and Montenegro, Romania and Bulgaria), the most important shipping companies of the Danube were also represented at the meeting. After the Donau Werbung meeting, the Eighth Danube Shipping Conference was also held in Budapest with 60 delegates between November 18 and 21. The HNTO played an active role in organizing the conference, as it submitted proposals to the organization regarding the nature and venues of accompanying programs, whilst the technical/professional content was determined by the organization itself. The HNTO was also representative of the organization, for assisting miscellaneous organization jobs, for recruiting Hungarian service providers for the exhibitions held simultaneously and for inviting guests of honor. Organized by HNTO, the Central European Chapter of the Association of International Tour Guides held its meeting in Budapest between November 19 and 21, 2004 with more than 100 professionals. The HNTO launched its 'Conference Ambassador Program' in 2004. At present, there are 4,418 international organizations with one or more registered Hungarian members. With the objective of complementing the fortunate rise in the number of domestic conferences, the program helps to attract international meetings to Hungary through mobilizing the 'conference ambassadors', i.e. researchers, physicians, engineers and other professionals representing Hungary in the international organizations of their field. This initiative utilizes the benefits involved in the ability of a pro- 61

fessional who is motivated by the prestige and the relationship equity of each visit of a foreign colleague to Hungary to argue for holding a meeting in Hungary. The Hungarian National Tourist Office promotes this activity through employing a wide array of marketing communication tools, its expertise and its domestic and international professional relations. In 2004, Hungarian chapters of 51 international organizations/associations submitted applications to participate in the Program, which includes two rounds. The jury of tourist professionals selected 19 applications as ones that are eligible for support. In the first round, Hungary managed to acquire the right to organize five international conferences, which will generate 4-5 thousand conference guests. The second round of ambassador program had already secured the title to organize an IT conference for 300 participants. Brochures and CD-ROMs In 2004, the Hungarian National Tourist Office distributed more than 9.6 million copies including 6.4 million brochures targeted at domestic tourists and 3.2 million publications for international dissemination. In the framework of a new brochure and image concept developed by the HNTO in 2003, more than 60 different printed brochures were published in around 20 languages about the following topics e.g.: Hungary, Budapest and Lake Balaton folders, Maps of Hungary - Budapest - the Lake Balaton, maps of camping sites, bicycle lanes and maps for children, Spa and wellness services, National parks, Hungarian Incentive Recipes, World Heritage Sites in Hungary, the 'Shalom' brochure of the nationwide Jewish cultural heritage, accommodation facilities and youth hostels, 2004 event calendar. In addition to the aforementioned brochures, image publications presenting the tourist regions were also completed in 2004 about the Lake Balaton, Budapest and its Surroundings, the Hilly Wine Region of Eger and Tokaj, Pannonia (Transdanubia), the Puszta and Lake Tisza. These are complemented by several regional brochures of the tourist regions to present individual tourism products and services. In 2004 the HNTO started to make available borchures also in electronic form on its website, hence some of the brochures are already accessible for browsing and in printer friendly versions at www.hungary.com. The quarterly tourism review of the HNTO, the 'Turizmus Bulletin' is the only journal of research character published in Hungary for tourism professionals. The publication is also accessible in electronic form at the HNTO website. Launched in 1997 and currently issued in Brochures can be ordered or downloaded at www.hungary.com. 62

1800 copies, the periodical is issued for both academics and practitioners: tourist businesses, government departments, non-profit tourist organizations on national, regional and local levels, trade associations, tourism consultants, professionals involved in tourism research and education and the next generation, i.e. students. The 'Turizmus Bulletin' regularly publishes findings of primary and secondary domestic and international researches commissioned by the HNTO, studies of current issues in tourism as well as statistics analyzing tourism performance in Hungary. A CD-ROM presenting Hungary's nine World Heritage Sites were compiled in Hungarian, English, German, French and Chinese languages in 2004, along with an English, German and Chinese speaking CD containing images and general information of Hungary and its tourism attractions. During the year, more than 10,000 copies of the CD-ROM were distributed. The Hungarian and English speaking CD entitled 'Tourism in Hungary, 2003' describes the most important features of tourism in Hungary. Furthermore, it gives a comprehensive overview of the structure of Hungarian tourism administration and the activities of the Hungarian National Tourist Office in 2003. The CD also contains two commercial spots created by the HNTO about health tourism in Hungary and Hungary in general. A CD-ROM entitled 'Hungary, the MICEst country' was published for the EIBTM exhibition held in Barcelona in November 2004. The CD describes the Hungarian MICE market in three languages: Hungarian, English and German. It is an efficient tool for professionals as it includes a comprehensive database with search options that helps find partners simply and rapidly. The hit lists offered upon querying the database of 299 service providers can be narrowed down by selecting a variety of parameters: conference hotels, meeting venues, PCOs/DMCs and incentive programs. The CD-ROM, which contains the descriptions of 128 hotels, 65 other conference venues, 79 PCOs/DMCs and 27 incentive programs is complemented with games, screensavers and pictures/photos of famous Hungarian personalities. Press and Trade Relations During the year 2004, the domestic communication of HNTO focused on promoting Hungary's 'Great Lakes', Lake Balaton in particular, health tourism, event tourism and the holiday voucher. Domestic In 2004, HNTO cooperated with 18 domestic dailies/magazines and six trade magazines. In the framework of it, PR articles were published with scheduled topics in the following travel magazines: Turizmus Panoráma, 2Heti Turizmus, GSZT, TTG and Vendéglátás. The agreement with the magazine 'Balatoni Futár' sought to address potential visitors interested in Lake Balaton directly. 63

In 2004, in order to promote domestic tourism the Hungarian National Tourist Office also cooperated with the editors of 'Főtér', a leading TV program. The program is broadcasted once a week and announced a prize called the 'Settlement of the Year' offered by Hungarian Television (MTV). The HNTO made a commitment to promote tourism to the awarded city more intensively. The prize went to the town of Kőszeg in 2004. In addition to the Hungarian public, foreign residents staying in Hungary for longer periods form a major target group for marketing communications. In order to access this segment effectively, in 2004 the HNTO continued to cooperate with foreign language magazines published in Hungary (The Budapest Sun, Budapest Business Journal, The Budapest Times, Budapester Zeitung, Russijskij Kurier, Le Journal Francophone, Monthly Hungary Journal) as well as with program magazines (Servus/Hello Budapest, Budapest Centrum, HoteleProgram, Magyarországi Program Magazin). Similar contacts have been maintained with accredited foreign journalists in Hungary who play an important role in international communication. HNTO also placed heavy emphasis on informing the representatives of the media and tourism professionals. As part of that, 13 electronic newsletters with up-to-date information about current topics were disseminated to more than 4,000 addresses in 2004. Efficient communication with the domestic press is furthermore supported by the 'Press Corner' section at the HNTO website. Here visitors can download the latest news, up-to-date information about marketing activities and events, press releases, photographs, background material for journalists and complete articles. During the year the Hungarian National Tourist Office organized over 25 press conferences and published 30 press releases to cover the most important events and marketing activities. Daily news for the trade and the press were emailed to about 900 corporate and 4,000 trade contacts. The HNTO launched its exclusive press forum ('Sajtóuzsonna') in 2004. The purpose of these press meetings is to offer first hand information to the stakeholders of tourism, the Hungarian press and electronic media professionals about the marketing activities of the Hungarian National Tourist Office. In 2004, the Hungarian National Tourist Office received close to 1,500 professionals from 36 countries representing the most prestigious international media: i.e.g The Washington Times, Le Figaro, Schweizer Touristik, Stern, Boston Globe, Bell' Europa, Meeting & Incentive Travel, Elle. In addition to individual press contacts, 190 journalists participated in thematic study tours focusing on a core product or a specific topic: i.e. International Personal, telephone and e-mail contact with the public surpassed 7.7 million, meanwhile trade contacts registrered by the HNTO's representatives was over 13.2 million. 64

Lake Balaton, Budapest, health tourism, C&I tourism, golf tourism, ecotourism, newly opened 4-star and 5-star hotels. On the occasion of major events which are also of international importance, the HNTO organized study tours for journalists. These events included i.e. the Winemaker of the Year election, the Island Festival, the International Festival of Wine and Sparkling Wine, the Budapest Autumn Festival and other trade events like R3 (meeting of PCOs/DMCs), the Welcome to Hungary workshop, the 'Utazás' travel exhibition, the Business Travel Show and the 3rd Health Tourism Trade Show, Conference and Fair. Following last years' practice, the HNTO operated an international press center during the Budapest Spring Festival also in 2004. During the festival 50 journalists were invited to concerts and performances and to participate in programs with the objective to provide them up-to-date information about Hungary's tourism products and services. As a result of the media activities targeting at the general public, the newsworth of PR articles and the official tariff reached 15.5 billion HUF. In the framework of the trade media activities HNTO could reach more than 90 million persons. In 2004, 3,200 tour operators and almost 45,000 travel agencies was programming Hungary as a destination. Almost 1,000 travel agency professionals participated in a study tour to Hungary last year. More than 300 persons visited Hungary on behalf of 60 television channels last year, including the German ZDF, RTL, ARD, WDR, VOX, the French TV5, TF1, France 2, the Italian RAI 1, RAI 3, the Japanese NHK, the Chinese Taiwan TV and CCTV. Furthermore, the HNTO received representatives of well-known and recognized guide books, e.g. the American Hideaways Guide, the Frommers Travel Book and the Flammarion on several occasions. Website In 2004, the HNTO website has undergone significant developments. The new portal launched in March 2004 includes an online database (ON-TIR) of 25,000 tourism items and 3,700 accommodation facilities with online booking. In addition to the address used earlier (www.hungarytourism.hu), the site is accessible at two new domain names (www.hungary.com and www.itthon.hu). During 2004 the website had close to one million visitors. The online tourist information system (ON-TIR) integrates HNTO's internal marketing information system and the website constructed for the general public/potential visitors, tourism professionals and the Tourinform network. The portal offers useful and up-to-date information to tourists in three languages (Hungarian, English and German), while travel trade pages can be accessed in Hungarian and English. The public pages targeted to the general public/potential visitors contain an illustrated section with general information, furthermore practical information about transportation, programs and events, accommodation facilities and other tourist services as well as about the country's tourist regions and products. The Travel Trade Pages contain general information on the Hungarian National Tourist Office and its activities: market studies/researches, infor- 65

mation on exhibitions, fairs and MICE tourism, as well as the current marketing and action plan of the HNTO. Journalists are assisted by a section of news and background material accessible in the Press Corner and a wide set of easy-to-order images/photos in the Photo Gallery. Most of the foreign representations of the HNTO operate market specific websites which provide country specific information in the native language of the most important source markets. The central website of the HNTO and the homepages of the tourist regions registered one million visitors, repectively, meanwhile 2.7 million persons visited the websites of the HNTO's representatives. In order to promote the widest possible availability of tourist information on the domestic market and to commemorate the World Tourism Day, the HNTO launched a new service on September 27, 2004 in cooperation with T-Mobile, the leading mobile phone operator in Hungary. The HNTO and T-Mobile cooperated in allowing mobile phones with WAP function to access the current programs/events by showing dates, venues, a brief description and images, furthermore to access the latest news. Mobile phone users were also informed about the holiday vouchers and its purchasing opportunities. Of the close to 4 million subscribers to T-Mobile's services, customers with compatible phones may locate the nearest accommodation facility, restaurant, spa, camping site, attraction or Tourinform office quickly and easily with the help of the GSM system. Call Center HNTO's toll-free Call Center service was accessible from seven countries in 2004: the United States of America, Austria, France, Ireland, the United Kingdom, Germany and Switzerland. In 2004, the service answered 40 thousand calls: mostly about program and leisure options, accommodation, brochures, transportation, travel agencies programing Hungary, attractions (e.g. museums, monuments), restaurants/catering and Tourinform offices. 80% of the calls were conducted in Hungarian, whilst German and English language calls represented 8%, each. The Call Center also received written requests in German (47%) and in English (38%). The 24 hours Call Center service is accessible at +80036000000 from abroad or at 06-1/ 4388080 from Hungary. At the number 06-80/ 630800, which is available toll-free inside Hungary, people receive tourist assistance from an answering machine. Give-Away The give-away items purchased and distributed in 2004 kept the following 'Hungaricum' products in focus: paprika, paprika shaped knobs for key-rings, 'puli' dog figures and wines from Tokaj and from other major wine regions. They were distributed as gifts at important events and exhibitions in order to promote Hungary. The inventory of give-away items to be distributed to trade visitors at exhibitions or during study tours/visits to Hungary in 2004 included over 2,500 gift wrapped boxes of paprika, scarves and ties with paprika pattern, about 2,000 'Puli' dog figures, over 10,000 ball point pens, CD-s with classical music, T-shirts, 500 conference bags and nearly 2,500 books. 66

Marketing Research The series of image studies launched in 2000 continued in 2004 by conducting market studies in Austria, the Netherlands and Germany. The objective of these studies is to survey the image and awareness of Hungary as a tourist destination, furthermore the travelling habits of people/potential visitors from the main and from the emerging source markets. Altogether with the primary researches conducted in the Austrian, Dutch and German markets, the available primary research results elicited specific information from close to three quarter of Hungary s source markets staying at commercial accommodation facilities. The project of regular surveys, launched by the Hungarian Central Statistical Office in collaboration with the HNTO in 2003 to study the travelling habits, especially the motivations and the spending of Hungarians and foreign tourists visiting Hungary continued in 2004. The results will be published in 2005. In autumn 2004, the HNTO commissioned a research with the objective of surveying the travelling habits of Hungarian households (see chapter Travelling Habits of Hungarian Households). In the framework of product specific studies, HNTO compared and analyzed the prices of tourist services in one of Hungary's most important destinations, the Lake Balaton, and in corresponding major European seaside destinations. A quarterly survey of 220 tourist businesses, including hotels, travel agencies, trade associations, program organizers and PCOs, provided updates of the MICE market performance in Hungary. The secondary research data purchased by the HNTO concerning e.g. cultural and heritage tourism, gastronomy tourism, ecotourism, sport and youth tourism formed an important basis for product development and product specific marketing activities of the HNTO. The HNTO took an important role in preparing and commissioning several international research projects in the framework of cooperation with international organizations or other national tourist organizations. These researches included a primary research of the image of the Visegrád Four countries in the United States of America, the study into the image of Europe in the United States of America and Canada, the survey of the US and Canadian MICE market and a research project regarding European city and cultural tourism. Market and product specific information available to the Hungarian National Tourist Office supports not only the company's marketing activities but, in a wider sense, helps the activities and decision making of the tourism industry in general. During 2004 the main communication channels of the HNTO to disseminate research results and up-to-date market information included the Travel Trade Pages of HNTO's website, presentations and trade events, the quarterly tourism review 'Turizmus Bulletin', the publications entitled Tourism in Hungary, furthermore responding e-mail and telephone requests. The marketing research related pages at www.hungary.com had almost 75,000 visitors in 2004, which corresponds to 7.5% of the total clicks on the HNTO website. 67

Cooperation with the Trade The intensity of HNTO's cooperation with the trade in Hungary and abroad has strengthened in the past few years. Cooperating with strategic partners is a priority in the marketing activities of the company. This means strengthening existing relations, adding new content to existing agreements and establishing new partnerships. The rolling action plan is one of HNTO's innovative marketing tools. It was upgraded in 2004, and is available under the Marketing Plan section in the Travel Trade Pages of the website to help tourism professionals join marketing activities easily. The Hungarian National Tourist Office is an associate member of the World Tourism Organization. Membership in the most prestigious organization of tourism offers several cooperation opportunities to the HNTO, including data exchange regarding the developments and trends in world tourism, purchasing publications, participation in international projects, surveys, studies and compilations of trade publications, furthermore organizing international conferences and events in Hungary. The Hungarian National Tourist Office has been a member of the European Travel Commission (ETC) almost for ten years. Members of the organization are the national tourist offices of 33 European countries. The main objective of the ETC is to promote Europe as a tourist destination and thereby to increase European inbound tourism from overseas source markets. As a result of cooperating within the organization, the HNTO has the opportunity to participate in several international research projects and marketing actions. During the last years Hungary has hosted meetings of the European Travel Commission on several occasions. The 'European Quartet - One Melody' means the cooperation of the competent ministries, government agencies and the national tourism organizations (NTO) in the four Visegrád countries (the Czech Republic, Poland, Hungary and the Slovak Republic). Cooperation started in February 2003, and aims to implement joint marketing, particularly promotion activities. The Czech, Hungarian, Polish and Slovakian national tourism organizations consider as an equally notable objective to increase inbound tourism and tourism receipts and to strengthen the awarness and positive image of their countries as tourist destinations. However, neither Hungary nor any other country in Central and Eastern Europe constitute an attractive destination in themselves on overseas markets such as the USA, Brazil, China or Japan. The overseas tourist tend to prefer touring holidays in Europe whereby the European Quartet countries' combined tourist supply is of great interest for overseas travellers. The geographical closeness, common historical and cultural heritage, religious monuments and arts enable the Visegrád Four (V4) Up-to-date information about the HNTO's marketing activities and cooperation opportunities is available at http://akcioterv.hungarytourism.hu website. World Tourism Organization European Travel Commission Visegrád Four Countries 68

countries to cooperate in promoting certain products, including historical cities, UNESCO World Heritage Sites, Jewish culture and heritage and spas. Of the four target markets of marketing communication, i.e. the USA, China, Japan and Brazil, only the latter one failed to come up to expectations, which is why the European Quartet will replace Brazil with India as a new potential source market, starting 2005. The common marketing activity the four countries conduct with increasing intensity comprises activities such as presence at CITM in Kunming in China and at JATA in Tokyo, developing and upgrading the website accessible at www.europeanquartet.com, shooting a film about historical cities and World Heritage Sites, organizing road shows and study tours, exchanging statistics and marketing research information. The brochures used successfully in 2004 will be enriched with recommended tours in 2005. Furthermore, a special tourist map of the V4 countries will be published. The agreement between Budapest Tourism Office and the HNTO covers the exchange of research materials/market information, joint research projects, brochures, the use of photographic archives, participation in exhibitions, organizing study tours and product development. The main goal of the cooperation is the coordination of the marketing activities of the two organizations. The main objective of the cooperation is to highlight for foreign visitors that Budapest is one of the most important Hungarian destinations of health tourism. Budapest Tourism Office Budapest Spas and Hot Springs Co. Ltd. The cooperation covers marketing communication and promotion including e.g. the reception of journalists and joint appearances abroad. The Hungarian Central Statistical Office (HCSO) modified its system of tourism survey in line with EU requirements in 2003 and 2004. This means that the HCSO conducts regular surveys of the travelling habits, motivations and tourism expenditure of foreign tourists in Hungary and of the Hungarian citizens. Hungarian Central Statistical Office In addition to participating in the development of the methodology of data collection, the HNTO makes available brochures, maps and give-away for distribution to survey participants. Moreover, the HNTO contributed to compiling 'Számokban Utazunk', a brochure published regularly in connection with the surveys. A cooperation agreement between the Association of Hungarian Travel Agents and Tour Operators and the Hungarian National Tourist Office in 2003 obliges HNTO to help the incoming tour operators/agencies of the Association actively. This means an assistance in organizing study tours, publishing brochures of high quality and design websites. Association of Hungarian Travel Agents and Tour Operators 69

The Hungarian Investment and Trade Development Company (ITDH) founded in 1993, is a support institution to the Ministry of Economy and Transport and the Ministry of Foreign Affairs. ITDH is to liase between Hungarian entrepreneurs, institutions of central and regional administration and foreign partners. Its formal and informal contacts with state administration and participants in the market developed during the past few years, ensure a prominent position among companies of a similar profile. ITDH is an organization: following European models in its construction, having an extensive network of offices both in Hungary and abroad, as well as an extensive database, focusing on the enhancement of investment and trade development, of a non-profit character, providing information, consulting and services. Investment and Trade Development Company Investment and Trade Developement Company H-1061 Budapest, Andrássy út 12. Telephone: +36-1/472-8100 Fax: +36-1/472-8101 E-mail: info@itd.hu Website: www.itd.hu In 2004 on the important source markets where the Hungarian National Tourist Office did not have a representation, such as Croatia, the Ukraine, China, the Slovak Republic, Canada and Turkey, the local offices of the Hungarian Investment and Trade Development Company performed the tourism related marketing activities. Another objective of the agreement between the HNTO, the ITDH and the Agricultural Marketing Center (see below) is to coordinate the marketing activities, especially the marketing communication and PR targeted at both Hungary and foreign markets. Boosting the intensity and efficiency of cooperation between the domestic and foreign networks of the three organizations through participating together in a variety of events as envisaged in short, medium and long term strategic plans is the major form of cooperation. The Hungarian Collective Agricultural Marketing Centre is an organization that was established to enlarge the markets of Hungarian agricultural and food products, and it has the following main tasks: support the sale of Hungarian agricultural products on the domestic and international markets, using Community marketing tools, spread the application of modern trade methods in the Hungarian food industry, and to strengthen the marketing approach, shape the country's agricultural supply, enhance the exportability of Hungarian products, assist producers, particularly small and medium-size businesses, processors and distributors with their activities on the markets, and to increase their competitiveness, support regional development and regional marketing projects, and promote the more efficient application of state grants. The agreement with the Agricultural Marketing Centre covers the common participation at trade fairs, the preparation of relevant brochures, the organization of study tours, and the use of photo libraries. Agricultural Marketing Centre Agricultural Marketing Centre H-1132 Budapest, Váci út 18. Telephone: +36-1/450-8800 Fax: +36-1/450-8805 E-mail: info@amc.hu Website: www.amc.hu 70

The main objective of cooperating with the National Federation of Rural and Agricultural Tourism is harmonizing the efforts of the two organizations and conducting common marketing activities. The cooperation includes preparing and distributing a joint brochure, participating in exhibitions, organizing study tours and trade events and online marketing/internet site. The cooperation with this famous china factory aims at raising the awareness of foreign tourists of Hungary s cultural heritage, including Herend china, which enjoys international acciaim as a unique Hungarian product Hungaricum. In the framework of the cooperation the Herend Porcelain Manufactory Ltd. has the opportunity to present itself at the major international tourist exhibitions, and to advertise in printed and electronic media and on the internet. In consideration, Herend Porcelain Manufactory Ltd. provides take away gifts to trade visitors including participants of study tours, furthermore presents the manufactory and the museum to the tourism professionals. Cooperating with MALÉV Hungarian Airlines, the national carrier, and collaborating with low cost airlines to increase incoming tourism are in the focus of the marketing activities of HNTO. This includes advertising, organizing study tours for journalists and professionals, participating in exhibitions, direct mails and cooperating in the compilation of in-flight magazines. Low cost airlines started up their Budapest service in March, 2003 and Hungary was flown by nine low cost carriers by the end of 2004. 160 000 150 000 140 000 130 000 120 000 110 000 100 000 90 000 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 Passenger Traffic of Low Cost Airlines, 2003 2004 (persons) Figure 39 National Federation of Rural and Agricultural Tourism Herend Porcelain Manufactory Ltd. Airlines January February March April May June July August September October November December 2003 2004 Source: Budapest Airport Co. In January, 2005 eight low cost airlines were operating flights to Budapest from more than 40 European cities: the German Germanwings and Air Berlin, the Slovak SkyEurope, the British-Hungarian Wizz Air, the British EasyJet and Jet2, the Swedish Snowflake and Norwegian Air Shuttle. 71

Representations of the Hungarian National Tourist Office abroad Austria - Germany - Switzerland Region Directorate D-60528 Frankfurt, Lyoner Strasse 44-48. (49 69) 9288 4620 fax: (49 69) 9288 4623 e-mail: sekretariat@ungarn-tourismus.de website: www.ungarn-tourismus.de Austria Ungarisches Tourismusamt A-1010 Wien, Opernring 5/2. Stk. (43 1) 585 20 1213, 585 20 1214 fax: (43 1) 585 20 1215 e-mail: ungarn@ungarn-tourismus.at website: www.ungarn-tourismus.at Germany Ungarisches Tourismusamt Regioalbüro Nord/Ost D-10178 Berlin, Neue Promenade 5 (49 30) 243 146 0 fax: (49 30) 243 146 13 e-mail: ungarn.info.berlin@t-online.de website: www.ungarn-tourismus.de Ungarisches Tourismusamt Regionalbüro Süd München (49 171) 975 4816 website: www.ungarn-tourismus.de Ungarisches Tourismusamt Regionalbüro Mitte/West D-60528 Frankfurt, Lyoner Strasse 44-48. (49 69) 9288 460 fax: (49 69) 9288 4613 e-mail: ungarn.info.frankfurt@t-online.de honlap: www.ungarn-tourismus.de Switzerland Ungarisches Tourismusamt (41 78) 766 0427 fax: (41 55) 640 8156 e-mail: info@ungarn-tourism.ch; website: www.ungarn-tourism.ch; www.hongrie-tourisme.ch Belgium Office du Tourisme de Hongrie (Hongaars Verkeersbureau) B-1050 Bruxelles, Avenue Louise 365 (B-1050 Brussel, 365 Loizalaan) (32 2) 346 8630, 648 5282 fax: (32 2) 344 6967 e-mail: htbrussels@skynet.be, website: www.visithongrie.be www.visithongarije.be the Czech Republic Madarská Turistika 170 06 Praha 7, M. Horákové 81 P.O.Box 552 (420 283) 870 742 fax: (420 283) 870 743 e-mail: info@madarsko-privat.cz website: www.madarsko.cz China The Commercial Office of the Hungarian Embassy 100600 Beijing, TaYuan Diplomatic Compound 3-1-41 (86 10) 6532 3845, 6532 3182 fax: (86 10) 6532 5131 e-mail: itdchina@netchina.com.cn France Office du Tourisme de Hongrie 75116 Paris, 140 avenue Victor Hugo (33 1) 5370 6717, 5370 6718 fax: (33 1) 4704 8357 e-mail: othon@club-internet.fr website: www.hongrietourisme.com Ireland Hungarian National Tourist Office Dublin 2, Hungarian Embassy, 2 Fitzwilliam Place (353 1) 6612 885 fax: (353 1) 6612 889 e-mail: info@visithungary.ie website: www.visithungary.ie Italy Ufficio Turistico Ungherese 20145 Milano, Via Alberto Da Giussano 1. (39 02) 4819 5434 fax: (39 02) 4801 0268 e-mail: ungotour@tin.it website: www.turismoungherese.it Japan Hungarian National Tourist Office 106-0031 Tokyo, Minato-ku, Nishiazabu 4-16-13, 28 Mori Building 11F (81 3) 3499 4953 fax:(81 3) 3499 4944 e-mail: info@hungarytabi.jp website: www.hungarytabi.jp the Netherlands Hongaars Verkeersbureau 2593 BS Den Haag, Laan van Nieuw Oost Indie 271 (31 70) 320 9092 fax: (31 70) 327 2833 e-mail: hong@euronet.nl website: www.hungarytourism.nl Northern Europe Region Denmark Ungarns Turistkontor information office DK 2100 Köbenhavn Ö, Strandvejen 6 (45 39) 161 350 fax: (45 39) 161 355 e-mail: htcopenhagen@mail.dk website: www.ungarn.dk Sweden Ungerska Turistbyran I Norden S-114 34 Stockholm, Birger Jarlsgatan 22. (46 8) 204 040 fax: (46 8) 611 7647 e-mail: htstockholm@swipnet.se website: www.ungernturism.org; www.ungarnturisme.com Poland Narodowe Przedstawicielstwo Turystyki Wegierskiej w Polsce e-mail: hirling@wegry.info.pl website: www.wegry.info.pl Romania Consulatul General al Republicii Ungare, Sectia Turism 3400 Cluj-Napoca, C.P. 352 /fax: (40 264) 440 547 e-mail: htcluj@codec.ro website: www.hungarytourism.ro Russia Buro Torgovogo sovetnika po turizmu Vengerskoj Respubliki 123242 Moszkva, Krasznaja Presznya ul. 1-7 (70 95) 363 3962/3241 fax: (70 95) 363 3963 e-mail: htmoscow@huntourmow.sovintel.ru website: www.hungary.ru Slovakia Veľvyslanectvo Maďarskej republiky Obchodná kancelária 811 06 Bratislava, Palisády 40 (421 2) 544 33 580 fax: (421 2) 544 16 366 e-mail: madarska.turistika@nextra.sk website: www.hungarytourism.sk www.madarsko.sk Spain Oficina Nacional de Turismo de Hungría 28020 Madrid, Avenida de Brasil 17., 10 o B (34 91) 556 9348 fax: (34 91) 556 9869 e-mail: hungria@hungriaturismo.com website: www.hungriaturismo.com Ukraine Komercijnij Viddil Posolstva Ugorskoji Respubliki Informacijne Bjuro "Ugorshina-Turizm" 01034 Kijev, vul. Striletska 16. (380 44) 494 1900 /fax: (380 44) 228 0811 e-mail: htkiev@hungarytourism.hu website: www.ugor.kiev.ua United Kingdom Hungarian National Tourist Office SW1X 8 AL London, 46. Eaton Place (44 207) 823 1032, 823 1055 fax: (44 207) 823 1459 e-mail: htoffice@btinternet.com website: www.gotohungary.co.uk United States of America Hungarian National Tourist Office N.Y. 10155-3398 New York, 150 East 58th Street, 33rd Floor (1 212) 355 0240, 355 5055 fax: (1 212) 207 4103 e-mail: hnto@gotohungary.com website: www.gotohungary.com Published by the HNTO Photos: Archive of the HNTO Layout: ViVA Média Holding 72

Address: Budapest H-1548 Telephone: (+36 1)438-8080 (0-24) Fax: (+36 1)488-8661 Hot-line: +80036000000 Internet: www.hungary.com, www.itthon.hu E-mail: hungary@tourinform.hu BUDAPEST AND SURROUNDINGS Budapest H-1052 Sütő utca 2. (Deák tér) Budapest H-1185 Ferihegy Airport, Terminal 2A and 2B Budapest H-1014 Szentháromság tér, (Buda Castle) (+36 1)488-0475 Fax: (+36 1)488-0474 Budapest H-1061 Liszt Ferenc tér 11. (+36 1)322-4098 Fax: (+36 1)342-9390 Budapest H-1062 Nyugati Railway Station /fax: (+36 1)302-8580 Budapest* H-1052 Városház u. 7. (+36 1)428-0377, (+36 1)428-0375 Fax: (+36 1)353-2956 pest-m@tourinform.hu Cegléd H-2700 Kossuth tér 1. (+36 53)500-285 Fax: (+36 53)500-286 cegled@tourinform.hu Gödöllő H-2100 Gödöllő Royal Palace /fax: (+36 28)415-402, (+36 28) 415-403 godollo@tourinform.hu Ócsa H-2364 Bajcsy-Zsilinszky utca 2. (+36 29)578-750 /fax: (+36 29)578-751 ocsa@tourinform.hu Ráckeve H-2300 Kossuth L. u. 51. /fax: (+36 24)429-747 rackeve@tourinform.hu Rétság H-2651 Rákóczi út 26. (+36 35)550-155 Fax: (+36 35)550-156 retsagnform.hu Szentendre H-2000 Dumtsa Jenő u. 22. /fax: (+36 26)317-965, (+36 26)317-966 szentendre@tourinform.hu Vác H-2600 Március 15. tér 16-18. (+36 27)316-160 Fax: (+36 27)316-464 vac@tourinform.hu Veresegyház H-2112 Fő út 35. (+36 28)558-035 /fax: (+36 28)558-036 veresegyhaz@tourinform.hu Zsámbék H-2072 Etyeki út 2. /fax: (+36 23)342-318 zsambek@tourinform.hu THE HILLY WINE REGION OF EGER AND TOKAJ Abaújszántó H-3881 Szent István tér 4. /fax: (+36 47)330-053 abaujszanto@tourinform.hu Aggtelek H-3759 Baradla oldal 3. (+36 48)503-001, (+36 48)343-073 Fax: (+36 48)503-002 aggtelek@tourinform.hu Balassagyarmat H-2660 Köztársaság tér 6. (+36 35)500-640 Fax: (+36 35)500-641 balassagyarmat@tourinform.hu Bátonyterenye H-3070 Ózdi út 9. (+36 32)553-295 batonyterenye@tourinform.hu Dédestapolcsány H-3643 Petőfi u. 21. /fax: (+36 48)340-013, (+36 48)501-037 dedestapolcsany@tourinform.hu Edelény H-3780 István király út 63. /fax: (+36 48)342-999 edeleny@tourinform.hu Eger H-3300 Bajcsy Zsilinszky utca 9. Pf: 263. (+36 36)517-715 Fax: (+36 36)518-815 eger@tourinform.hu Encs H-3860 Petőfi utca 20-22. (+36 46)587-389 /fax: (+36 46)587-390 encs@tourinform.hu Gyöngyös H-3200 Fő tér 10. /fax: (+36 37)311-155 gyongyos@tourinform.hu Hollókő H-3176 Kossuth utca 68. (+36 32)579-011 /fax: (+36 32)579-010 holloko@tourinform.hu Kazár H-3127 Damjanich út 3. /fax: (+36 32)341-363 kazar@tourinform.hu Mezőkövesd H-3400 Szent László tér 23. (+36 49)500-285 Fax: (+36 49)500-286 mezokovesd@tourinform.hu Miskolc H-3525 Széchenyi u. 35. /fax: (+36 46)508-773 borsod-m@tourinform.hu Miskolc* H-3525 Városház tér 13. (+36 46)350-425, /fax: (+36 46)350-439, (+36 46)348-921 miskolc@tourinform.hu Pásztó H-3060 Nagymező út 3. /fax: (+36 32)563-315 paszto@tourinform.hu Salgótarján H-3100 Fő tér 5. (+36 32)512-315 /Fax: (+36 32)512-316 salgotarjan@tourinform.hu Sárospatak H-3950 Eötvös u. 6. (+36 47)315-316 /fax: (+36 47)511-441 sarospatak@tourinform.hu Sátoraljaújhely H-3980 Kossuth tér 5. /fax: (+36 47)321-458, (+36 47)525-135, 47/525-135 satoraljaujhely@tourinform.hu Szécsény H-3170 Ady E. út 12. /Fax: (+36 32)370-777 szecseny@tourinform.hu Tokaj H-3910 Serház u. 1. (+36 47)552-070 /fax: (+36 47)352-259 tokaj@tourinform.hu LAKE BALATON Alsóörs H-8226 Strand sétány 1. /fax: (+36 87)575-001 (01.06 31.08) alsoors@tourinform.hu Badacsonytomaj H-8261 Park utca 6. (+36 87)531-013 /fax: (+36 87)431-046 badacsonytomaj@tourinform.hu Balatonalmádi H-8220 Városház tér 4. (+36 88)594-081 /fax: (+36 88)594-080 balatonalmadi@tourinform.hu Balatonboglár H-8630 Erzsébet u. 12-14. /fax: (+36 85)550-168 balatonboglar@tourinform.hu Balatonföldvár H-8623 Széchenyi Imre utca 2. (+36 84)700-036 /fax: (+36 84)540-220 (15.06 15.09) H-8623 Kőröshegyi út 1. (+36 84)700-036 /fax: (+36 84)540-220 balatonfoldvar@tourinform.hu Balatonfüred H-8230 Petőfi u. 68. (+36 87)580-480 Fax: (+36 87)580-481 balatonfured@tourinform.hu Balatonkenese H-8174 Táncsics Mihály u. 24. /fax: (+36 88)594-645 balatonkenese@tourinform.hu Balatonvilágos H-8171 Aligai út. 1. /fax: (+36 88)446-034 balatonvilagos@tourinform.hu Buzsák H-8695 Fő tér 1/a /fax: (+36 85)530-070 buzsak@tourinform.hu Fonyód H-8640 Ady Endre u. 1. /fax: (+36 85)560-313 fonyod@tourinform.hu Gyenesdiás H-8315 Kossuth Lajos u. 97. /fax: (+36 83)511-790 gyenesdias@tourinform.hu Keszthely H-8360 Kossuth L. u. 28. /fax: (+36 83)314-144 (+36 83)511-660, (+36 83)511-661 keszthely@tourinform.hu Révfülöp H-8253 Villa Filip tér 8/b (+36 87)463-194 /fax: (+36 87)563-091 revfulop@tourinform.hu Siófok H-8600 Víztorony, Pf.:75. /fax: (+36 84)315-355, (+36 84)310-117 siofok@tourinform.hu Tapolca H-8300 Fő tér 17. (+36 87)510-777 Fax: (+36 87)510-778 tapolca@tourinform.hu Tihany H-8237 Kossuth u. 20. (+36 87)438-016 /fax: (+36 87)448-804 tihany@tourinform.hu Vonyarcvashegy H-8314 Kossuth u. 42. (+36 83)348-033 Fax: (+36 83)548-021 vonyarcvashegy@tourinform.hu Zalakaros H-8749 Gyógyfürdő tér 10. /fax: (+36 93)340-421 zalakaros@tourinform.hu Zamárdi H-8621 Kossuth utca 16. (+36 84)345-291, (+36 84)545-052, (+36 84)545-053 Fax: (+36 84)345-290 zamardi@tourinform.hu PANNONIA (TRANSDANUBIA) Bakonybél H-8427 Fő u. 15. /fax: (+36 88)461-476 bakonybel@tourinform.hu Bakonyszombathely H-2884 Kossuth u. 50. (+36 34)359-155 Fax: (+36 34)359-122 bakonyszombathely@tourinform.hu Bóly H-7754 Erzsébet tér 1. /fax: (+36 69)368-100 boly@tourinform.hu Bük H-9737 Eötvös u. 11. (+36 94)558-419, (+36 94)558-439 Fax: (+36 94)359-322 buk@tourinform.hu Celldömölk H-9500 dr. Géfin L. tér 1. /fax: (+36 95)423-940 celldomolk@tourinform.hu Csurgó H-8840 Csokonai u. 24. /fax: (+36 82)571-046 csurgo@tourinform.hu Dombóvár H-7200 Hunyadi tér 27. /fax: (+36 74)466-053 dombovar@tourinform.hu Dunaföldvár H-7020 Rákóczi u. 2. /fax: (+36 75)341-176 dunafoldvar@tourinform.hu Dunaújváros H-2400 Vasmű út 10/a /fax: (+36 25)500-148, (+36 25)500-149 dunaujvaros@tourinform.hu Enying H-8130 Kossuth u. 29. /fax: (+36 22)372-952, (+36 22)572-072 enying@tourinform.hu Fertőd H-9431 J. Haydn u. 3. (+36 99)370-182 /fax: (+36 99)370-544 fertod@tourinform.hu Fertőszéplak H-9436 Nagy Lajos u. 43. (+36 99)537-140 Fax: (+36 99)537-141 fertoszeplak@tourinform.hu Gárdony H-2483 Szabadság út 16. (+36 22)570-078 /fax: (+36 22)570-077 gardony@tourinform.hu Győr* H-9021 Árpád u. 32. (+36 96)522-255 Fax: (+36 96)522-224 gyor-m@tourinform.hu Győr H-9021 Árpád u. 32. (+36 96)336-817 /fax: (+36 96)311-771 gyor@tourinform.hu Harkány H-7815 Kossuth u. 2/a (+36 72)479-624 Fax: (+36 72)479-989 harkany@tourinform.hu Kaposvár* H-7400 Csokonai u. 3. (+36 82)508-151 /fax: (+36 82)317-133 somogy-m@tourinform.hu Kaposvár H-7400 Fő u. 8. (+36 82)512-921, (+36 82)512-922 Fax: (+36 82)320-404 kaposvar@tourinform.hu Kárász H-7333 Petőfi u. 36. /fax: (+36 72)420-074 karasz@tourinform.hu Komárom H-2900 Igmándi út 2. (+36 34)540-590 /fax: (+36 34)540-591 komarom@tourimform.hu Kőszeg H-9730 Jurisics tér 7. (+36 94)563-120 /fax: (+36 94)563-121 koszeg@tourinform.hu Lenti H-8960 Táncsics M. u. 2/A. (+36 92)551-188 Fax: (+36 92)551-189 lenti@tourinform.hu Magyarhertelend H-7394 Kossuth L. u. 46. (+36 72)521-002 /fax: (+36 72)521-001 magyarhertelend@tourinform.hu Mohács H-7700 Széchenyi tér 1. (+36 69)505-515 /fax: (+36 69)505-504 mohacs@tourinform.hu Mosonmagyaróvár H-9200 Kápolna tér 16. /fax: (+36 96)206-304 mosonmagyarovar@tourinform.hu Nagyatád H-7500 Baross G. u. 2. (+36 82)553-012 Fax: (+36 82)553-013 nagyatad@tourinform.hu Nagykanizsa H-8800 Csengery u. 1-3. Tel: (+36 93)/313-285 Fax: (+36 93)536-077 nagykanizsa@tourinform.hu Orfű H-7677 Széchenyi tér 1. (+36 72)598-116 Fax: (+36 72)598-119 orfu@tourinform.hu Paks H-7030 Szent István tér 2. (+36 75)421-575 Fax: (+36 75)510-265 paks@tourinform.hu Pannonhalma H-9090 Petőfi u. 25. /fax: (+36 96)471-733 pannonhalma@tourinform.hu Pápa H-8500 Fő u. 5. /fax: (+36 89)311-535 papa@tourinform.hu Pécs H-7621 Széchenyi tér 9. (+36 72)213-315, (+36 72)511-232 Fax: (+36 72)212-632 baranya-m@tourinform.hu Pécsvárad H-7720 Kossuth L. u. 31. /fax: (+36 72)466-487 pecsvarad@tourinform.hu Sárvár H-9600 Várkerület 33. (+36 95)520-178, (+36 95)520-181 Fax: (+36 95)520-179 sarvar@tourinform.hu Siklós H-7800 Felszabadulás u. 3. (+36 72)579-090 Fax: (+36 72)579-091 siklos@tourinform.hu Sopron H-9400 Liszt Ferenc u. 1. (+36 99)517-560, (+36 99)517-561 Fax: (+36 99)517-527 sopron@tourinform.hu Sümeg H-8330 Kossuth L. utca 15. (+36 87)550-276 /fax: (+36 87)550-275 sumeg@tourinform.hu Székesfehérvár H-8000 Városház tér 1. (+36 22)537-261 /fax: (+36 22)340-330 szekesfehervar@tourinform.hu Székesfehérvár* H-8000 Piac tér 12-14. (+36 22)312-818 Fax: (+36 22)502-772 fejer-m@tourinform.hu Szekszárd H-7100 Garay tér 18. (city) (+36 74)511-263 /fax: (+36 74)511-264 szekszard@tourinform.hu H-7100 Bajcsy - Zs. u. 7. (county) (+36 74)418-907 Fax: (+36 74)412-082 tolna-m@tourinform.hu Szombathely H-9700 Kossuth Lajos u. 1-3. (+36 94)514-451 Fax: (+36 94)514-450 szombathely@tourinform.hu Tamási H-7090 Szabadság u. 29. /fax: (+36 74)470-902 tamasi@tourinform.hu Tata H-2890 Ady Endre u. 9. Pf.: 218 /fax: (+36 34)586-045, (+36 34)586-046 tata@tourinform.hu Veszprém* H-8200 Megyeház tér 1. (+36 88)545-045, (+36 88)545-047, (+36 88)545-048, (+36 88)545-049 Fax: (+36 88)545-039 veszprem-m@tourinform.hu Veszprém H-8200 Vár u. 4. /fax: (+36 88)404-548 veszprem@tourinform.hu Zalaegerszeg H-8900 Széchenyi tér 4-6. Pf: 506 (+36 92)316-160, (+36 92)510-696 Fax: (+36 92)510-697 zalaegerszeg@tourinform.hu Zirc H-8420 József A. u. 1. (+36 88)416-816 Fax: (+36 88)416-817 zirc@tourinform.hu PUSZTA AND LAKE TISZA Abádszalók H-5241 Füzes Kemping, Strand út 2. (+36 59)535-346 Fax: (+36 59)535-345 (01.05 30.10) H-5241 Deák Ferenc u. 1/17. /fax: (+36 59)357-376 abadszalok@tourinform.hu Baja H-6500 Szentháromság tér 5. (+36 79)420-793 /fax: (+36 79)420-792 baja@tourinform.hu Békéscsaba H-5600 Szent István tér 9. /fax: (+36 66)441-261 bekescsaba@tourinform.hu Berekfürdő H-5309 Berek tér 11. (+36 59)319-408 Fax: (+36 59)519-007 berekfurdo@tourinform.hu Berettyóújfalu H-4100 József Attila u. 35. /fax: (+36 54)400-718 Tel: 54/300-124 berettyoujfalu@tourinform.hu Csongrád H-6640 Szentháromság tér 8. /fax: (+36 63)570-325 csongrad@tourinform.hu Debrecen H-4026 Kálvin tér 2/A. (county) (+36 52)534-544, (+36 52)534-545 hajdu-m@tourinform.hu H-4024 Piac u. 20. (city) (+36 52)412-250, (+36 52)316-419 Fax: (+36 52)535-323 debrecen@tourinform.hu Gyomaendrőd H-5500 Erzsébet liget 2. (+36 66)386-851 Fax: (+36 66)282-109 gyomaendrod@tourinform.hu Gyula H-5700 Kossuth L. u. 7. (+36 66)561-681 /fax: (+36 66)561-680 bekes-m@tourinform.hu Hajdúböszörmény H-4220 Kálvin tér 6. /fax: (+36 52)561-851, (+36 52)561-852 hajduboszormeny@tourinform.hu Hajdúnánás H-4080 Fürdő u. 7. /fax: (+36 52)702-223 (15.06 31.08) H-4080 Köztársaság tér 6. /fax: (+36 52)382-076 hajdunanas@tourinform.hu Hajdúszoboszló H-4200 Szent István park 1-3. /fax: (+36 52)558-928, (+36 52)558-929 hajduszoboszlo@tourinform.hu Hódmezővásárhely H-6800 Szőnyi u. 1. /fax: (+36 62)249-350 hodmezovasarhely@tourinform.hu Hortobágy H-4071 Pásztormúzeum, Petőfi tér 1. /fax: (+36 52)589-321 (15.02 15.12) H-4071 Czinege János u. 1. (+36 52)589-110 Fax: (+36 52)369-109 hortobagy@tourinform.hu Jászapáti H-5130 Tompa M. u. 2. /fax: (+36 57)441-008 jaszapati@tourinform.hu Jászberény H-5100 Lehel vezér tér 33. /fax: (+36 57)406-439 jaszbereny@tourinform.hu Karcag H-5300 Dózsa György u. 5-7. /fax: (+36 59)503-225 karcag@tourinform.hu Kecskemét H-6000 Kossuth tér 1. /fax: (+36 76)481-065 kecskemet@tourinform.hu Kisköre H-3384 Kossuth L. utca 8. /fax: (+36 36)358-023 kiskore@tourinform.hu Kiskőrös H-6200 Petőfi tér 4/a. (+36 78)514-850, (+36 78)514-851 Fax: (+36 78)414-850 kiskoros@tourinform.hu Kiskunfélegyháza H-6100 Szent János tér 2. (+36 76)561-420 Fax: (+36 76)561-414 kiskunfelegyhaza@tourinform.hu Kiskunmajsa H-6120 Zárda u. 2. /fax: (+36 77)481-327 kiskunmajsa@tourinform.hu Kisújszállás H-5310 Rákóczi u. 3/a (+36 59)520-800 Fax: (+36 59)520-672 kisujszallas@tourinform Kistelek H-6760 Kossuth u. 5-7. (+36 62)597-420, Fax: (+36 62)597-421 kistelek@tourinform.hu Makó H-6900 Széchenyi tér 10. /fax: (+36 62)210-708 mako@tourinform.hu Mezőtúr H-5400 Szabadság tér 17. (+36 56)550-637 /fax: (+36 56)350-901 mezotur@tourinform.hu Mórahalom H-6782 Röszkei u. 1. /fax: (+36 62)280-294 morahalom@tourinform.hu Nagykörű H-5065 Május 1 út 1. /fax: (+36 56)496-305, (+36 56)494-240 nagykoru@tourinform.hu Nyíracsád H-4262 Petőfi tér 3. /fax: (+36 52)207-271 nyiracsad@tourinform.hu Nyíregyháza H-4400 Országzászló tér 6. /fax: (+36 42)504-647, (+36 42)504-648 szabolcs-m@tourinform.hu Ópusztaszer H-6767 Szoborkert 68. (+36 62)275-133/121m Fax: (+36 62)275-007 opusztaszer@tourinform.hu Orosháza H-5904 Fasor u. 2/a. /fax: (+36 68)414-422 oroshaza@tourinform.hu Pusztamérges H-6785 Móra tér 4. /fax: (+36 62)286-702 pusztamerges@tourinform.hu Ruzsa H-6786 Alkotmány tér 2. /fax: (+36 +36 62)585-210 ruzsa@tourinform.hu Sóstógyógyfürdő H-4431 Nyíregyháza Sóstógyógyfürdő, Víztorony, /fax: (+36 42)411-193 (15.05-15.09) sostofurdo@tourinform.hu Szarvas H-5540 Kossuth tér 3. /fax: (+36 66)311-140 (+36 66)210-062 szarvas@tourinform.hu Szeged* H-6722 Tábor u. 7/b. (+36 62)548-092, Fax: (+36 62)548-093 csongrad-m@tourinform.hu Szeged H-6720 Dugonics tér 2. /fax: (+36 62)488-690 (+36 62)488-699 szeged@tourinform.hu Szeghalom H-5520 Szabadság tér 10-12. /fax: (+36 66)470-380 szeghalom@tourinform.hu Szolnok H-5000 Ságvári krt. 4. (+36 56)420-704 Fax: (+36 56)341-441 szolnok-m@tourinform.hu Tiszacsege H-4066 Fő u. 38. Tel/fax: (+36 52)588-036, (+36 52)588-037 tiszacsege@tourinform.hu Tiszafüred H-5350 Fürdő u. 21. /fax: (+36 59)511-123, (+36 59)511-124 tiszafured@tourinform.hu Tiszaújváros H-3580 Széchenyi út 27. (+36 49)540-238, (+36 49)540-239 Fax: (+36 49)540-122 tiszaujvaros@tourinform.hu Tótkomlós H-5940 Marx u. 15. /fax: (+36 68)462-908 totkomlos@tourinform.hu Vásárosnamény H-4800 Szabadság tér 33. (+36 45)570-206 /fax: (+36 45)570-207 vasarosnameny@tourinform.hu * Information is available via post or telephone.

Tourist Regions and Tourinform Offices in Hungary Tourist regions Budapest and Surroundings Lake Balaton Pannonia/Transdanubia The Hilly Wine Region of Eger and Tokaj Puszta and Lake Tisza Tourinform office