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VOL. 20, NUMBER 16 AUG 10, 2012 – SEPT 06 , 2012
Budapest Business Journal
45 % DROP IN THE NUMBER OF M&A DEALS IN H1
HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU
SPECIAL REPORT HOSPITALITY AND TOURISM BUSINESS FINALLY SHOWING PROMISING SIGNS 〉PAGES 14-21
A SOUND BUSINESS? Szige Festival is undoubtedly the Sziget largest of its kind, but in Hungary there is a festival for virtually everything. If organizers target their niche well, success might still come their way, even in an already saturated market. Q&A with Sziget founder Károly Gerendai PAGES 10-11
Festivals running at max volume PAGE 12
BUSINESS
SPECIAL REPORT
TRENDS
Broadcasting the Olympics
On the way up
Dreaded cloud migration
In the past two decades, the Olympic Games have become the media event. There is literally no program that could rival its ratings. But for broadcasters, the Olympics are more about money spent than money earned. PAGE 07
As more airlines report bankruptcy, those left standing should be getting ever stronger. At the same time, competition for passengers is becoming tougher. What services and benefits does an airline have to offer to keep on flying? PAGE 19
A recent survey shows that many IT pros dread cloud deployments so much they’d rather have a root canal or do their taxes. But by the end of this year the number of those who have migrated applications to the cloud is expected to have risen. PAGE 13
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Stronger forint supports fall in state debt Peter Zwack dies at 85 The Olympics: an expensive busines
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It occurred to me that nothing is more interesting than opinion when opinion is interesting HERBERT BAYARD SWOPE, THE NEW YORK EVENING WORLD, 1921
HOPE DIES LAST
THIS PHENOMENA THREATENS HUMAN SOCIETY WITH CATASTROPHIC CONFLICTS Heti Válasz
It is widely accepted that the increasing age of society requires drastic interventions in the retirement and pension systems of most European countries. And in times when the ongoing crisis keeps projecting growth plans further into the future, these steps are only becoming more urgent. The above argument was the main factor that the Hungarian government gave when announcing plans to restructure the country’s pension system back in 2010. A legislative change gave private pension fund members the option of moving, along with their retirement savings, back to the state pension pillar. But although the state-owned pension was communicated only as an option to the private system, given that the new legislation said that those who stayed in the private pension funds were not entitled to a state pension, and pension contributions paid by their employers would go to the state pension fund, most people probably did not see it as a real choice at all. As such, 97% of members returned to the state pillar in 2011, providing HUF 3,000 billion in one-off income to the state budget. Government plans at that time, and even the recently announced Széll Kálmán Plan 2.0, said that pension system reform would come with the establishment of individual pension accounts that would enable payers to follow their savings and forecast how much they will get when retiring. But the pension law, passed on July 16, 2012, makes it clear that individual accounts will not be launched and pension calculation rules will remain the same. According to the explanation given, the separation of the early retirement benefits from the pension system made in 2011 was a big enough reform, and its mid-term effects would tell the government what to do next. However, by not launching individual accounts, experts say the pension system has not, in effect, been reformed, and the impression arises that private pension funds have been nationalized only to decorate budget data. While the government-friendly press has not commented on the latest developments so far, some other publications have been ready to express their outrage.
JULY 30, 2012
AUGUST 6, 2012
After asking the Human Resources Ministry (EMMI) for an explanation of the recently passed pension law, business daily Világgazdaság was the first to reveal that the government does not plan any further changes to the pension system as yet. After publishing EMMI’s brief but meaty answer, the paper remains moderate and dispassionate but expresses its worries and also its disagreement. The article adds that the postponement of the pension reform “is in direct contradiction to what pension experts have been saying for years: without solving the problems that burden the current scheme, the pension system will become unfinanceable and unsustainable.” The population is aging, while the productivity rate keeps decreasing, is not able to make up for those leaving the labor market, and continuously worsens the demographic balance, Világgazdaság points out. “Decision makers are also aware of the time-bombs in the pension system, at least in theory,” Világgazdaság says in the last paragraph, referring to the Széll Kálmán Plan 2.0.
“A pension should at least guarantee relaxed years of retirement: this need is as basic as expecting potato soup to be potato soup,” the governmentclose weekly Heti Válasz says of the fundamental, but as yet only desired, function of the pension system. The article, which takes a surprisingly critical tone, considers the problem as hard and dangerous as “global warming or increasing CO2 emissions” while saying that “this phenomena threatens human society with catastrophic conflicts.” The weekly puts the blame on an aging society as well. “More than two million pensioners are awaiting their monthly benefits from the more-or-less twice bigger group of active workers.” Those retired would like to get back the money they put into the communal pot, although we all know, Heti Válasz says, that the “omnipotent state” has spent that money “on easing its current financial difficulties”. “What we call defalcation in small amounts and is defined as misappropriation by criminal law is, when it comes to social funds, simply called the state distribution of pensions,” the article says; but soon it even becomes more passionate. “It does not matter at all how much you have contributed, you only get as much as the state budget has for this
purpose at the given moment – and this is all you can get.” The paper does not fail to give suggestions on reforming the pension system. “First, the illusion of the pension system being some kind of state-handled – and risk-free – investment system, where all sums paid in are later accounted, should be abolished.” Heti Válasz’s advice is to impose “consumption-based taxes that affect everyone without exemption” instead of the several types of income taxes that are “so popular nowadays”.
JULY 31, 2012 Árpád W. Tóta, a love-himor-loath-him publicist now working for the online edition of the weekly HVG, found a sarcastic way of expressing his ideas about the lack of a pension reform. “As the campaign is approaching, new promises and big plans are on the rise. Let’s wait a minute and be surprised in advance at how terribly stupid people would be to believe a single word of Viktor Orbán once again,” Tóta says, before contrasting the Prime Minister’s former statement about the necessity of the pension reform with the current situation. “When he [Orbán] decided to get the assets of the private pension funds, he committed the crime of defraud-
ing, which is otherwise penalized by law, through threats and false promises,” the article says, recalling that the original plans said that those who did not volunteer to move to the state pension system would not be eligible for a state pension, while promises included individual accounts that could be inherited. In contrast, no one knows what is to come at the moment, Tóta says, emphasizing that both the threat and the promise “were lies”. “Getting away with the moment and not giving a crap about the future: these are his [Orban’s] leading stars,” Tóta says, adding that the PM obviously does not care what will happen in Hungary in ten years’ time. “An alibi for tomorrow; that is all that counts.” According to the writer, Orbán needed the HUF 3,000 billion that was channeled to the state budget from private pension funds to hide how dirty lies raised him into power. “Only 100,000 people had the suspicion that he had not had any further plans,” the author says, referring to the low amount of people deciding to stick with their private pension accounts. “Now the rest could wake up as well and should think it over that even in this region, a nation allowing this to happen will be eaten – namely by the Russians.” And then we can go fight for our freedom again and be proud of our brave deeds in a revolution against the aggressive regime, but “it would be wiser to stand up today”. ■
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Hungarian unorthodox economic policy is more and more widely accepted in the European Union. GOVERNMENT SPOKESPERSON ANDRÁS GIRÓ-SZÁSZ ON THE INTRODUCTION OF THE FRENCH “TRANSACTION TAX”, ALTHOUGH IT IS LITTLE MORE THAN A NAME MATCH WITH THE HUNGARIAN LEVY.
NEWS FOR THESE PAGES IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, HUNGARY A.M.
DRY WEATHER WIPES OUT 40% OF HUNGARY MAIZE CROP
Photo: Zsolt Czeglédi / MTI
Farm association MAGOSz estimates about 40% of Hungary’s maize crop has been destroyed because of unseasonably hot and dry weather over the past several weeks, association chairman István Jakab said. Damages at a national level could exceed HUF 200 billion, Jakab said.
ECONOMY HUNGARY SEVEN-MONTH GEN GOV’T DEFICIT REACHES 75.9% OF FULLYEAR TARGET A July surplus reduced Hungary’s cash flow-based general government deficit, excluding local councils, to HUF 437.5 billion by the end of July, or 75.9% of the full-year target, the National Economy Ministry said in a first reading. The central budget had a surplus of HUF 49.7 billion in July, the national social insurance funds posted a surplus of HUF 22.3 billion and the separate state funds had a surplus of nearly HUF 8.2 billion surplus last month, the ministry said. In the first seven months of 2012, the central budget deficit reached HUF 542.5 billion or 91.4% of the respective full-year target. The social insurance funds recorded a seven-month surplus of HUF 19 billion, as against a planned annual deficit of HUF 35.3 billion. The separate state funds had a surplus of HUF 86.0 billion in January-July, surpassing their targeted annual surplus by almost 63%. Adjusting both 2011 and 2012 figures to help comparison,
the seven-month general government deficit came to HUF 520.8 billion or 56.7% of the adjusted full-year target, the ministry said. In July 2011 the central government had a deficit of HUF 1,494.5 billion. July central budget expenditure was almost HUF 446 billion lower than a year earlier as the purchase of the Russian Surgutneftegas’ stake in Hungarian oil and gas company MOL in July 2011 boosted the base by just less than HUF 500 billion. Spending on consumer price subsidies, interest payments and guarantees as well as spending on budget appropriations managed by budget chapters were all down yr/yr. Central budget revenue in July was up HUF 64 billion from a year earlier as a result of higher revenue from excise duties, personal income tax and various other duties. Revenue of budget organizations, those related to state assets as well as interest revenue were above their respective levels in July 2011.
STRONGER FORINT SUPPORTS FALL IN STATE DEBT Hungary’s state debt as a percentage of GDP could fall further this year, mainly because of the firming forint, Gov-
ernment Debt Management Agency (ÁKK) deputy-CEO László András Borbély said in an interview. Hungary’s state debt fell from 81.5% of GDP at the end of 2010 to 80.6% in 2011 as debt increased at a slower rate than GDP growth, Borbély said. Debt fell even though the forint weakened against the euro, raising the amount of forex debt by HUF 1,163 billion to almost 43% of the total, he added. The decline continued in the first quarter of 2012, dipping to 79%, supported by a HUF 129 billion fall in the absolute value of central government debt, which accounts for more than 90% of total state debt, he said. The fall was due in part to favorable financing conditions and the significant firming of the forint, which reduced forex debt by HUF 521 billion, he added. Central government debt fell a further HUF 334 billion by the end of June as the net effect of slightly increased net issues and the continued strengthening of the forint against the euro, which cut the forint value of the stock by HUF 749 billion in the first half. Borbély said a campaign launched by ÁKK in January to boost retail purchases of government securities had
raised the stock of papers held by households by more than 50% to HUF 718 billion by the end of July. This stock includes only securities designed for the general public, but households also hold about HUF 250-300 billion worth of other government securities. Including the latter securities, the stock is expected to reach HUF 1,000 billion soon, he added. Borbély said that although about 40% – or more than HUF 4,500 billion – of the stock of Hungarian forint government securities was in the hands of foreign investors at the end of July, this is not a problem. Investors today are more experienced with regard to negative news that influences the mood of global markets, and the circle of investors who hold Hungarian government securities has changed, at least in part, he explained. Today’s investors are clearly investing in developing markets and are not prone to panicky reactions because of possible changes to the country’s assessment, he added.
NEW CAR REGISTRATIONS UP 20% IN JULY There were 4,449 new passenger cars registered in Hungary in July 2012, up 19.6% from
the same month a year earlier, market researcher Datahouse said. The number of new passenger vehicle registrations rose 19.9% to 32,235 in January-July from the same period a year earlier. Including commercial vehicles, the number of new vehicle registrations rose 17.5% to 5,991 in July and was up 16.9% at 42,379 in January-July. The number of motorcycle registrations fell 10.3% to 218 in July and was down 9.2% at 1,296 in January-July. New light commercial vehicle registrations climbed 22.5% to 926 in July and were up 13.4% at 6,307 in January-July. Three new buses were registered in July, compared to 26 in the same month a year earlier. In January-July, 32 new buses were registered, down from 109 in the same period a year earlier. Registrations of large commercial vehicles rose 11% to 395 in July and increased 10.2% to 2,509 in January-July.
2013 BUDGET VIABLE BUT IMF DEAL NEEDED, SAYS FISCAL COUNCIL HEAD Next year’s budget in its current form can be financed and the public debt will not grow beyond the limit stipulated by law if the international economic
climate does not worsen, Árpád Kovács, head of the Fiscal Council, said in an interview. Kovács went on to warn, however, that external funds to finance the budget should be involved in the cheapest possible way, and called Hungary’s planned deal with the International Monetary Fund and the European Union on financial assistance “the right way” to go. The Fiscal Council’s concerns are primarily on the revenue side of next year’s budget, Kovács told nol.hu. He said that the government’s plans for new taxes have elicited tension, and that it was not clear how the government would finance its employment protection program. Kovács noted that the government’s objective of reinforcing the middle classes was important, but added that the distribution of the public burden should be reconsidered. He also raised the idea of introducing a “solidarity contribution” on top of the current flat tax. Kovács warned that though the economy may not shrink next year, GDP growth could be well below the 1.6% outlined in the budget.
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BUSINESS RICHTER H1 PROFIT CLIMBS 43% ON HIGHER REVENUE, MILESTONE PAYMENTS Hungarian drug maker Gedeon Richter’s first-half net income climbed 42.9% to HUF 28.1 billion from the same period a year earlier on higher revenue and milestone payments from partners in the first quarter, the company said in a consolidated IFRS report. Second-quarter net income came to about HUF 11.3 billion, Econews calculated, based on Richter’s reported preliminary Q1 net income of HUF 16.8 billion, practically level with the HUF 11.9 billion estimate in a poll of analysts by Portfolio.hu. Total revenue was up 13.8% at HUF 166.0 billion. Cost of sales increased at a slightly slower pace, climbing 13.1 % to HUF 62.7 billion. Gross profit was up 14.2% at HUF 103.3 billion. Operating profit increased 21.8 % to HUF 28.5 billion. Richter booked HUF 2.5 billion on the “other income” line for milestone payments from Watson related to the start of phase II clinical trials of Esmya, a trademarked drug for the treatment of uterine fibroids, in the U.S. market, and from Forest Laboratories for a central nervous system research and development project. Richter spent HUF 20 billion on research and development in H1, 21.8% more than in the base period. Sales and marketing costs rose 19.8% to HUF 46.5 billion in part because of an expansion of Richter’s women’s healthcare sales network in Western Europe and promotions for the launch of Esmya. In a breakdown of revenue, Richter said domestic sales fell 10.8% to HUF 17.1 billion. Sales in the CIS rose 25.7% to HUF 73.3 billion and EU sales climbed 16.6% to HUF 59.5 billion, but sales in the United States dipped 21.5% to HUF 7.0 billion.
EGIS CONSOLIDATED PROFIT UP 121% FROM LOW BASE IN Q3 Consolidated after-tax profits of Hungarian drug maker Egis, majority-owned by France’s Servier, rose 121.2% from a year earlier to HUF 5.11 billion in Q2 2012, which is the third quarter of its 2011/12 business year started October 1 2011, the company said in a preliminary IFRS consolidated report. Part of the rise reflected a low base but operating profit still rose a sharp 88.1% to HUF 5.939 billion. Egis registered HUF 355 million net financial loss in its Q3 against HUF 109 million financial profit a year earlier. Analysts polled by the financial portal portfolio.hu
expected Egis to increase net profit by almost 123% to 5.17 billion. Gross profits rose 8.4% to HUF 20.55 billion. Sales revenue rose 7.1% in one year to HUF 34.67 billion in Q3 of the business year. Export revenue rose 171%, helped by a weaker forint, and domestic sales fell 17.5% from a high base. Q3 earning per share (EPS) rose to HUF 656 from HUF 297 a year earlier. Consolidated after-tax profit in the first nine months of the business year rose 46.6% to HUF 16.90 billion as ninemonth operating profit rose 28.4% to HUF 18.34 billion and Egis registered a HUF 961 million financial profit in the period against HUF 589 million financial loss in the base period. Profits were lessened by HUF 1 billion loss from associated businesses, up more than a third from the first nine months of the previous business year. Egis spent HUF 8.2 billion on research and development in the first nine months, 4.1% less than a year earlier. Nine-month EPS rose from HUF 1,480 to HUF 2,170. Nine-month sales revenue rose 2.8% as export sales rose 7.2% and domestic sales fell 8.7%. Total assets rose 5.6% in nine months to HUF 201.48 billion of which shareholders’ equity rose 10% to HUF 177.79 billion.
HUNGARY M&A ACTIVITY PLUNGES IN H1 The value of mergers and acquisitions in Hungary fell to $400 million in the first half from $1.4 billion in the same period a year earlier, data compiled by Ernst & Young shows. The number of M&A transactions closed in H1 fell 45% to 38 during the period, Ernst & Young estimated, based on public data. There were no publicly announced M&A deals that exceeded $100 million during the period. The value of transactions under $100 million averaged $9.5 million apiece, up slightly from $9 million one year earlier. U.S., French and British companies accounted for the biggest number of foreign investors behind the deals. Strategic investments accounted for two-thirds of the transactions. Telecommunications and media companies were involved in 24% of the transactions, up from 15% in the base period. Manufacturing companies and service industry companies were each part of 11% of the transactions.
MASTERCARD FACES NEW PROBE IN HUNGARY OVER ALLEGED MARKET ABUSE MasterCard Inc. said Hungary’s competition authority had opened a new probe against the company for “alleged abuse of dominant position” in the domestic bank-
card market. MasterCard was informed of the investigation in June, the company said in its quarterly report published yesterday. The probe is focused on the period beginning December 2010. Hungary’s antitrust regulator fined MasterCard and Visa Europe HUF 477 million ($2 million) each in 2009, saying they colluded with local banks on fees charged to credit-card customers between 1996 and 2008. MasterCard, which has denied any wrongdoing, appealed that decision. MasterCard paid the fine in the fourth quarter of 2009.
NUMBER OF MANDATORY LIQUIDATIONS REACHES NEW HIGH IN MAY-JULY The number of mandatory liquidation procedures initiated against Hungarian companies was 2,251 in July, up 20% in one year, according to company information provider Opten. The number has reached new peaks, exceeding 2,200 for the third month in a row. Previously the number exceeded 2,000 only twice, in June and November 2011. Opten attributed the increase to greater vigilance by the tax authorities, noting that 7,500 of the 12,355 procedures started in the first half of 2012 were initiated by the authorities. The number of such procedures more than doubled from a year earlier. The number of voluntary liquidations fell further, to 1,678 in July from 2,610 in June and from 3,000-4,000 a month between January-May, Opten said. The number of new companies set up in July rose to 2,800 after reaching a low at 1,800 in April, as a result of stringent new regulations on setting up companies.
METLIFE CLOSES ACQUISITION OF AVIVA HUNGARY UNIT US-based MetLife said it has closed the acquisition of insurer Aviva’s unit in Hungary after the competition authorities cleared the deal. Aviva agreed in January to sell its businesses in Czech Republic, Hungary, and Romania to MetLife. Aviva’s Hungarian unit had revenue from premiums of HUF 21.1 billion last year, giving it 4.8% of the country’s life insurance market, according to data from the Hungarian Association of Insurers. In the first quarter of 2012, the unit’s revenue from premiums came to HUF 4.3 billion to give it 3.8% market share. The company’s predecessor was established by the Hungarian Credit Bank in 1996, but was later acquired by ABN Amro. It was sold in 2001, when ABN Amro Bank merged with K&H Bank and became a member of the Aviva group.
PRAKTIKER TESTS SMALLER-SCALE EXPANSION IN HUNGARY
HUNGARY TOBACCO CROP SUFFERS HOT, DRY WEATHER
German-owned do-ityourself chain Praktiker is expanding in Hungary, but on a smaller scale, the Hungarian unit’s managing director Karl-Heinz Keth said. Praktiker wants to continue operating its 19 stores in Hungary but will test a smaller-scale expansion by opening two stores of 1,000-2,000sqm near Budapest and in eastern Hungary before the end of the year, Keth said. The cost of the stores will come to €200,000-250,000, he added. The store will be based in areas with 10,000-15,000 potential customers. Praktiker’s Hungarian unit aims to match last year’s turnover of HUF 30.06 billion in 2012, the director said. First-half sales matched the pro rata target. He said the parent company had injected €7 million into the Hungarian unit in the spring to cover developments and stabilize its position.
Hungarian tobacco yields are expected to fall to 1.6-1.7 tonnes per hectare this year from 1.8 tonnes in 2011, the chairman of the National Alliance of Hungarian Tobacco Producers said. Unseasonably hot and dry weather has restrained growth of the plants and lowered quality, said Illés Bényei. Last year, farmers harvested more than 9,000 tonnes of tobacco. Hungarian farmers planted tobacco on about 4,800 hectares this year, about the same as last year. About 4,000 hectares of the area on which tobacco is grown is in Nyírség, a disadvantaged region. Hungary’s tobacco farms provide seasonal work to more than 20,000 people, of whom 16,000 live in Szabolcs-Szatmár-Bereg County, where unemployment is high, Bényei said.
EQUILOR STARTS FUND MANAGEMENT Hungarian brokerage firm Equilor Befektetési Zrt has obtained regulatory approval to start a fund management unit, the company said. The fund management arm started operating as of August 1, and is run by Zsolt Pillár, who previously worked at Assicurazioni Generali S.p.A.’s Hungarian fund management unit, Equilor said. Of the brokerage firms trading on the Budapest Stock Exchange, Concorde Securities generated the most turnover in July, brokering deals worth HUF 37.7 billion, followed by Erste Investment with HUF 36.9 billion, and Equilor Investment took third place with HUF 25.2 billion.
DOMESTIC DEBT BIGGEST WORRY FOR MORE THAN QUARTER OF HUNGARIANS About 26% of Hungarian consumers see debt as their biggest problem in the coming six months, well over the 9% average for Europe, a survey by market researcher Nielsen shows. In a survey in the Q1, just 15% of Hungarians said debt was their biggest problem. About 14% of Hungarians in the fresh survey said job security was their biggest worry and the same proportion said they were most concerned about the economic situation. Higher energy prices were the top worry for 10% and 8% said their children’s education and well being were their biggest concerns.
PÉTER ZWACK DIES AT 85 Péter Zwack, one of the most colorful personalities in Hungarian political and economic life and longtime head of the family business making Zwack Unicum, died on August 5 in Italy at the age of 85. Zwack was born in 1927 in Budapest into a Christian family with Jewish roots. In 1947, he moved to Italy to escape from the Communists, then went to the United States and obtained his diploma. He established a foundation named First Aid for Hungary and collected $120,000 dollars for refugees of the Hungarian Revolution. He came back to Europe in 1970 and led the family business from Vienna. He returned to Hungary in 1988 and was named Hungary’s ambassador to Washington. He was removed from the post a year later. He joined Hungary’s economic life in 1991 when he and business partner Emil Underberg privatized the Budapest Liquor Industry Company and Zwack Unicum Stock Company, from where Zwack eventually retired in 2008. His two youngest children, Sándor and Izabella have followed into the family tradition.
WHEAT HARVEST ALMOST COMPLETE AT 3.95 MLN TONS Hungary’s wheat has harvest reached 3.95 million tons with the harvest 98% completed, Minister of Rural Development Sándor Fazekas said, citing a July 31 report of Hungary’s Food Chain Safety Authority (NEBIH). Wheat quality is high, and the bulk of the harvest is of food quality, he said. About 1.2 million tons will be used for domestic food purposes, while 0.9-1 million tons will be used as animal feed, leaving a significant stock for exports, Fazekas said. On July 27, NEBIH estimated a 6.15 million ton harvest for maize, noting that the outcome could significantly vary depending on weather. The domestic consumption of maize is expected at around 4.5 million, Fazekas said. The rural ministry submitted a package of proposals to support animal farmers hit by the extraordinary heat and high feed prices, Fazekas said in answer to a question from an opposition LMP party MP. Economic safety reserves of both wheat and maize are practically full, Fazekas added.
HUNGARY AMONG MOST PESSIMISTIC STATES IN EUROPE Significant majorities of people surveyed in Europe at the request of the European Commission continue to think that the situation of their national economy is bad, a Eurobarometer survey carried out in May showed. Hungary is among the most pessimistic member states, after Greece, Spain, Portugal and Ireland. “Although there are significant variations between countries, there are signs that Europeans are becoming less pessimistic, with more people saying that the worst of the crisis is behind us. Thirty percent of Europeans think that the crisis’ impact on the job market has already reached its peak (a rise of 7 points since the previous survey in autumn 2011),” the survey said. The latest report, which was carried out between May 12-27 2012 in 34 countries and territories: the 27 European Union member states, the six candidate countries (Croatia, the Former Yugoslav Republic of Macedonia, Turkey, Iceland, Montenegro and Serbia), and the Turkish Cypriot Community. Unemployment is the most frequently mentioned concern in 17 member states, with very high scores in Spain (76%), Portugal (68%), Sweden (63%), Ireland (62%) and Hungary (57%). The economic situation is the first item mentioned in six Member States: Greece (66%), the Netherlands (56%), Slovenia (55%), Romania (45%), Czech Republic (39%) and Belgium (27%). In Hungary, it is “only” the second by 43%. Rising prices are the main concern in Estonia (51%), Malta (42%) and Austria (37%). Hungarians are not so worried in this respect; this factor is ranked in third place at 28%. ■
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NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, ENERGY TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE
EU APPROVES GUNVOR PURCHASE OF GERMAN REFINERY The European Commission (EC) has cleared Gunvor Group, owned by billionaire Gennady Timchenko, to buy the Petroplus oil refi nery in Germany’s Ingolstadt and related German marketing operations, the EC said on Aug 6. As one of the world’s largest independent commodities traders, Gunvor is a market leader in trade, transportation, storage and optimization of crude oil, petroleum products and other energy products. The Ingolstadt refi nery is among the best-performing European refi neries, with a strong regional presence in Bavaria, one of Germany’s most prosperous regions. The refi nery has a processing capacity of about 100,000 barrels per day.
HUNGARY’S MOL CONSTANTLY SEEKING NEW ACQUISITIONS, CEO SAYS Hungarian refi ner MOL Nyrt, the country’s largest company in revenue terms, is constantly seeking new acquisitions, the fi rm’s CEO Zsolt Hernádi said on Hungary’s Inforádió in an interview on July 30. Hernádi added, however, that there are only about
regional
one or two acquisitions realized out of every 20 possibilities. MOL recently bought Czech Republicbased Pap Oil’s network of 124 fuel stations, and 12 stations in Slovenia.
HUNGARY STATE COMPANIES SHUFFLE SOUTH STREAM STAKE Hungary’s state-owned utility company MVM Zrt has brought a 50% stake in the implementing company for the Hungarian stretch of the South Stream natural gas pipeline from stateowned development bank MFB Zrt, MVM said on Aug 3. Hungary’s government initiated the transfer of the stake in Déli Áramlat Zrt at the start of the year, a move seen as part of scheme to broaden the energy portfolio of electricity fi rm MVM. “Technical, legal, and business experts are in negotiations with the implementation company’s other owner, Russian energy company OAO Gazprom, over the Hungarian stretch of the project,” MVM said in a statement on Aug 3, reported by newswire MTI. The project company is set to construct the Hungarian stretch of the South Stream gas pipeline, which will deliver 63
billion cubic meters of gas annually from the Black Sea to South and Central Europe from 2015.
EUROPE’S PLAN TO CONTROL AZERI GAS SUPPLY IN JEOPARDY Europe’s plan to secure and control a supply of Azeri natural gas, backed by legal agreements, is in jeopardy as Azerbaijan joins forces with Turkey to own and operate the main export pipeline. By creating a so-called Southern Corridor to bring in large volumes of central Asian gas, the European Commission (EC) hopes to reduce dependence on Russian gas. The Commission’s initial plan was for European utilities to build a single pipeline to transport gas from Azerbaijan’s Caspian Sea through Turkey to European markets, all under EU regulation and with limited possibilities for diverting gas en route. Azerbaijan and Turkey are following their own agendas in developing the gas corridor, however, which in many ways directly oppose European interests and make legally binding commitments with Europe unlikely. The EC and the government of Azerbaijan
in 2011 agreed in a joint declaration to develop the Southern Corridor together. “Those agreements set the terms under which gas will eventually reach Europe. Once ratified, they provide the legal guarantees needed,” said Marlene Holzner, a EC spokeswoman. But lawyers say the agreements are of no significance without a committed gas supplier.
TURKISH COMPANIES TO SUPPLY GAS TO BULGARIA Private Turkish companies are showing interest in supplying natural gas to Bulgaria, according to Energy and Economy Minister Delyan Dobrev. “Bulgaria is also interested because we have made a decision to liberalize the gas market in the country,” the Sofia News Agency quoted Dobrev as saying in an interview with Bulgarian national television. Dobrev met on Aug 1 in Ankara with Turkey’s Energy and Natural Resources Minister, Taner Yildiz, and representatives of private gas suppliers in the country. “If there are private sector companies that wish to export natural gas to Bulgaria, they can apply for a
license,” Yildiz was quoted as saying after the meeting.
POLAND POSTPONES OPENING OF ENERGY MARKET UNTIL 2015 The Polish electricity market will not be fully opened until 2015, two years later than previously planned, the head of Poland’s energy regulator URE was quoted as saying. “I would like to complete the liberalization of the energy market by 2015, which means freeing up the last of the tariff s,” Woszczyk told daily Puls Biznesu. “Until quite recently I thought that it was doable by 2013, but it is unlikely.” Poland still controls retail energy prices after freeing up prices for corporate users in 2007. Poland’s total power consumption amounted to nearly 158TWh in 2011, up from 155TWh the year before, according to data from the Polish grid operator PSE-Operator.
SLOVAK PARLIAMENT PASSES THIRD ENERGY PACKAGE MPs have approved two laws necessary for the transposition of the EU’s third energy liberalization package into Slovakia’s legal system. If the president signs the changes they
will become effective from Sept 1, the SITA newswire reported. New laws on energy will, for example, allow people to switch their supplier of electricity or natural gas within three weeks and without a fee, according to the report. Following the implementation of the liberalization package, consumers will have the right to settle accounts with their previous supplier within four weeks after changing and also the right to comprehensible data on their energy consumption and the prices of electricity and natural gas.
CZECHS TO RELY ON NUCLEAR POWER, MINISTRY SAYS The Czech Republic should in the future increasingly rely on nuclear power while phasing out coal power plants, according to an updated blueprint for the country’s energy strategy unveiled on July 30 by the minister of industry and trade. The share of nuclear power should increase from the current 16% to between 30% and 35% by the year 2040. Minister Martin Kuba told reporters that the state should also halt massive subsidies for renewable sources of energy. ■
NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, REGIONAL TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE
SERBIA APPOINTS RULING PARTY LAWMAKER AS CENTRAL BANK GOVERNOR
new government says it wants to renegotiate.
Serbia appointed a lawmaker from the country’s ruling coalition as governor of its central bank on Aug 6, deepening concern over the bank’s independence and the new government’s commitment to reforms sought by the EU. Parliament endorsed Jorgovanka Tabakovic, a senior member of the co-ruling Serbian Progressive Party, to replace Dejan Soskic, who resigned last week over a law stepping up government control over the bank. Serbian central bank Vice Governor Bojan Markovic also resigned on Aug 6, after lawmakers on passed a law on Aug 4 that creates a powerful, parliament-appointed supervisory body to be represented on the bank’s executive board, and gives the assembly responsibility for appointing its entire top management. The IMF has cautioned the law would have consequences for a frozen €1 bln standby loan deal that the
MORE BANKS CONSIDER LEAVING GREECE The flight of foreign credit institutions from Greece is growing to epidemic proportions owing to the prolonged, deep recession and uncertainty regarding an exit from the euro zone. Sources suggest that the Portuguese owners of Millennium Bank are examining the possibility of selling their local subsidiary, although no interest in it has been expressed as yet, Greek daily Kathimerini reported on its website. The two Cypriot lenders, Bank of Cyprus and Cyprus Popular Bank, are also exploring all options, from the sale of their activities in Greece, to their legal autonomy, so as to contain the consequences in case of a Greek exit from the euro zone. Societe Generale of France is also contemplating the possibilities for the sale of its Greek subsidiary, Geniki Bank.
VAT HIKE NOT PROVING EFFECTIVE IN CZECH REPUBLIC The Czech government’s assumption that a VAT hike would help fill state coffers and reduce the gap in public finances has proved wrong, Lidove Noviny wrote in its Aug 2 edition. According to statistics, VAT revenue in the first seven months of this year has been level with, or even lower than, the same period last year. The paper said the Finance Ministry had refused to comment and statistics offer a simple explanation that Czechs are spending less. Although the prices of goods and services went up by 3.5% as of January, people paid 2.1% less for consumer goods and services. As of January 1 2012, Czech Republic increased the lower VAT rate from 10% to 14%.
CZECH PRESIDENT SIGNS DIRECT PRESIDENTIAL ELECTION BILL President Václav Klaus on Aug 1 signed into law a bill on direct presidential elections, a spokesman for the president said. The
legislation will allow Czechs to elect the next president in a two-round direct election, for the first time in history. According to the legislation, any candidate will have to be nominated by either 20 MPs or 10 senators, or collect 50,000 signatures in support of his or her bid. Expenses on the election campaign will be limited to CZK 50 million (€1.97 million). The two candidates who receive the highest number of votes will advance to the second round, held two weeks after the first. Czech expats will be allowed to vote at Czech embassies and consulates.
CROATIA FINANCE MINISTRY PUBLISHES TAX DEBTORS “PILLAR OF SHAME” The Croatian Finance Ministry published a list of tax debtors to help boost revenue and narrow the budget deficit to 3.8% of gross domestic product this year from 5.5% in 2011. The list, called the “Pillar of Shame” by national radio, includes 102,000 corporate, entrepre-
neurial and individual debtors owing taxes for longer than 90 days. They owe a combined HRK 52 billion ($8.5 billion) in taxes, almost half the country’s estimated HRK 118.8 billion in budget spending for this year, Bloomberg reported citing a ministry spokeswomen.
ROMANIA SET FOR FURTHER POLITICAL TURMOIL AFTER VOTE Romania’s Constitutional Court postponed a ruling on validating the results of a July 29 referendum to impeach suspended President Traian Basescu, prolonging the political turmoil that has weakened Romania’s currency, the leu. Turnout at Sunday’s referendum called by Premier Victor Ponta’s ruling coalition was 46.23% with 99.97% of votes counted, below the minimum threshold of half the electorate, the Central Electoral Bureau said on July 30. About 87.5% of those who participated voted to oust Basescu. The court postponed a judgment until Sept 12 to review electoral
documents and voter lists after receiving conflicting data from the central electoral bureau and the statistics institute, according to a court statement released on Aug 2.
SLOVAK PARLIAMENT BACKS SUPPLEMENTARY BANK, COMPANY TAXES Slovak lawmakers approved on July 26 supplementary taxes on company profits and bank deposits aimed at helping the government trim its budget deficit to within EU limits next year. Leftist Prime Minister Robert Fico has repeatedly criticized banks and energy utilities for making record profits at a time when the region is battling a deepening debt crisis that has dragged many countries into recession. The 0.36% corporate tax will be levied monthly on energy, transport and telecommunication companies with annual profits exceeding €3 million ($3.64 million) and businesses regulated by the state. Parliament also voted through an increase in a 0.2% tax on bank deposits. ■
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The Olympics: an expensive busines The Olympics are a costly business. Television networks and advertisers all risk losses, and yet are still prepared to bid for the Games with the highest prestige in the world. BBJ ZSÓFIA VÉGH
At the opening ceremony of London 2012, the delegation of Luxembourg counted nine athletes and at least twice as many who were not. The Hungarian swimming team sent 32 swimmers to the British capital and two times as many staff: coaches, masseurs, and officials. Still, the profession represented in the highest number at this year’s Olympics are journalists: there are 20,000 of them overall, or two for every athlete. In the past two decades, the Olympic Games have become the media event. There is literally no program (except for the Super Bowl, but that is only for the United States) that could rival its ratings. Something so popular must be profitable – and it is, as far as the International Olympics Committee (IOC) is concerned. But for broadcasters, the Olympics are more about money spent than money earned. That the world’s most viewed sports event is a lossmaking business is partly the media’s fault. Greedy TV networks eager to get broadcasting rights have constantly upped their bids over the years. In 2003, NBC, a major U.S. TV network, part of Comcast, secured the rights of the 2010 Vancouver Winter Olympics and the 2012 London summer games for $2.2 billion. (The IOC sells the Summer and Winter Olympic TV rights in a bundle.) Nine years later, the network again put in the winning bid – knocking out Disney’s ESPN and Newscorp’s Fox Sports – this time worth $4.4 billion for the upcoming four games. Considering that last one resulted in a $252 million loss for the network, $1.1 billion per Olympics sounds like a generous offer. Not even revenues from advertising can offset it. TV networks are aware of
REVENUE STREAMS
The IOC knows how to diversify: it relies on a variety of sources and arguably is the major winner of every Olympic Games. Beyond broadcast fees, it draws revenues from ticketing, licensing, organizing Committees for the Olympic Games (OCOG), Domestic Sponsorship and the TOP Program. The latter accounts for more than 40% of all Olympic revenues. that, of course, and enter the bidding war hoping to draw advantages in other ways. NBC, for example, captures roughly 50% of the audience during the event. This increased attention can improve the ratings of regular scheduled programs too. But that is not the only reason for networks to willingly striking a loss-making deal. The Olympics have become so essential a part of a broadcaster’s prestige that networks cannot give them up. In the long-term, the Olympics can help to enhance reputation or even income, but during the 16 or so days of competition, they just make a loss. Hungarian Public Television MTV holds the rights to telecast probably for the same reason. Although the network won’t disclose how much it paid the IOC to become the single Hungarian broadcaster of the 2012 summer games, the bill must have knocked it back a few hundred millions. To recoup some of the fees, MTV has attempted to sell news opportunities to commercial channels at an
exorbitantly high price, rival broadcasters have claimed. A 30-second news block would cost HUF 270,000 + VAT while, for 50 seconds channels were expected to pay HUF 330, 000 + VAT, online news portal Index says. MTV denied having charged high prices, saying costs were actually lower than four years ago. The network explained rates for extra technical efforts of telecast. (A list of fees is accessible on their webpage.) Still, no channel has signed a contract with MTV. MTV also failed in its earlier attempt to recover some of the costs of the European Football Championships. The network intended to make public screening payable, but restaurants and pubs hoping to gain some extra business by adding free telecast of football matches lashed out on the regulator as one. In theory, the single owner of rights (MTV) is entitled to broadcast sports events only and charge secondary broadcasters. Apparently, however, fees of HUF 300,000 for establishments able to host less than 150
guests and HUF 600,000 for those above 300, as reported by hvg.hu, were not found to be a reasonable offer. Nor were they after MTV offered substantial discounts for bars wishing to broadcast both the soccer championships and the Olympics. Since no deal was sealed, MTV eventually agreed to incur the costs of public screening.
Fees may be high, but there are ways to recoup them. The Olympic Games are one of the most effective international marketing platforms in the world, reaching billions of people in over 200 countries. And that makes them the most wanted event for advertisers, something they are willing to pay a lot for. The membership to this club is restricted (probably to elevate costs) thanks to the IOC. The Olympic Partner (TOP) Program maximizes the number of sponsors: this year 11 companies are official partners of the IOC including Coca-Cola, Acer and Visa. Exclusivity, however, comes with price tag: by August 12,
sponsors (will) have contributed $957 million (including the 2010 Vancouver winter Olympics). They are still nowhere near the $3,914 collected from broadcasting fees. The Hungarian public television’s balance sheet also remains to be seen. Revenues from advertisement are unlikely to offset the heavy investment the channel incurred to improve technical equipment, the costs of the so-far largest Hungarian sports crew on the spot, the introduction of 3D broadcasting and, of course, the lack of income drawn from other channels. Financially Olympics may be a losing game. ■
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10-11 12
Enterprise
How to avoid anti-competitive practices BBJ BBJ
At the beginning of June, a decision by the Hungarian Competition Authority (GVH) to impose penalties of HUF 150 million on two mobile telecommunication companies for using unfair business practices caused quite a stir. Interestingly enough, only a month earlier, news of a fine almost ten times greater caused much less public interest. In the first five and a half months of 2012, the GVH imposed fines in connection with anti-competition agreements only once, when a total of HUF 1,250 million was levied against rail transportation companies. According to the GVH, following the liberalization of the Hungarian rail freight transportation market, these rail companies put agreements in place with a view to restricting competition by either harmonizing their freight transportation prices or by dividing up the Hungarian freight transportation market. For those who follow the practices of the competition authority, reports of punitive fines and unannounced dawn raids are not extraordinary. According to GVH’s 2010 report to Parliament, the authority levied approximately HUF 10 billion in fines for anti-competitive practices,
NUMBER OF CASES RELATED TO RESTRICTIVE PRACTICES, 2006-2010
2006 2007 2008 2009 2010
INTERVENTION
NO INTERVENTION
15 12 5 7 6
4 3 1 0 0
NUMBER OF CONSUMER PROTECTION CASES, 2006-2010 INTERVENTION
2006 2007 2008 2009 2010
NO INTERVENTION
66 81 64 48 45
19 3 2 3 0
NUMBER OF ABUSE OF DOMINANCE CASES, 2006-2010
2006 2007 2008 2009 2010
INTERVENTION
NO INTERVENTION
11 10 3 0 0
22 3 4 1 13
most coming in two highprofile cases: an approximately HUF 7.2 billion fine against a number of railroad construction companies, and an approximately HUF 2.3 billion fine against a number of milling companies. According to press releases available on its website, the authority also conducted two unannounced dawn raids in the first five months of 2012, and a total of seven in 2011. The companies targeted were involved in fields ranging from chemical manufacturing, construction materials, and wholesale trade to software
engineering, financial services, and the media. When imposing fines upon cartel members, the GVH says it is guided by the objectives of correcting the effects of unfair market practices and deterring similar violations in the future. In the most severe cases, the fines could be as high as 10% of the offender’s turnover. In addition, the authority may also set behavioral rules for the members of a cartel. THERE IS MORE TO LOSE In addition to punitive fines and dawn raids, companies involved in
cartels also risk being banned from participating in public procurement procedures, receive negative publicity, and will need to spend valuable management resources on non-value creating activities such as dealing with the competition authority. Staff morale will also suffer. In cases where a cartel targets EU-funded procurement, the companies and their management can also face criminal sanctions. Companies can limit the risk of anti-competitive practices through a range of mechanisms, says George Surguladze, Forensic Services department leader at PwC Hungary. “Educating the company management and staff about the potential consequences of involvement in anti-competitive practices is key,” Surguladze explains. “Raising awareness among staff that the company has an effective system in place which enables it to identify unethical behavior should also help reduce the risk of staff getting involved in anti-competitive practices. If a whistle-blower hotline is not yet set up, companies should consider establishing one to give their employees the confidence of anonymity when bringing instances of anti-competitive practices to light.” In the event that selfprevention mechanisms do not succeed, companies are well advised to have response plans in place, the expert adds. These should specify the tasks and responsibilities of management and staff in case of scrutiny or investigation. Companies may also need to set up dawn raid response plans and train their staff how to imple-
ment these. The powers that the GVH has when conducting dawn raids, the potential consequences for the company if the management and staff do not cooperate with the authority, and the benefits of cooperating should be made clear to everyone. Over recent years, the GVH has investigated and fined numerous companies for anticompetitive practices.
“There is no indication that the GVH’s efforts are decreasing and it is probable that we will see more such cases in the future. This should be a strong incentive for companies to improve their market competition-related policies and practices,” Surguladze concludes. George Surguladze, Forensic Services department leader at PwC Hungary contributed to this article
FINES IMPOSED IN CONSUMER PROTECTION CASES (2006-2010, HUF BLN)
FINES IMPOSED BY GVH (2006-2010, HUF BLN)
FINES IN CASE OF RESTRICTIVE PRACTICES (2006-2010, HUF BLN)
All charts and table data by GVH
As the Hungarian Competition Authority cracks down on anticompetitive practices, companies should look for ways to protect themselves.
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Hungarian press independence? The hegemony of the leftist media began to be counter-balanced in the early 2000s and by now rightist – currently they might also be called as progovernment – press outlets might out number them. Is there an independent media left in Hungary? BBJ ÁGNES VINKOVITS
Whatever one’s party preferences, it should be above all doubt that ex-President Pál Schmitt’s resignation in April 2012 was a success for the Hungarian press. It was HVG.hu, the online edition of acknowledged weekly HVG, which first reveled in January that
Schmitt had translated word for word a major part of his doctoral thesis submitted in 1992. Despite the government’s seeming lack of interest, which presumably aimed at playing down the importance of the case, the press stuck with the plagiarism scandal, which eventually forced Schmitt’s downfall. The case also proves that at least some of the international fears about Hungary’s much criticized media law (which came into effect on January 1 2011), namely that it abolished the freedom of the press in the country, were off base. However, while it seems that the government has even more sophisticated tools with which to control the press than the media law, such as directing where it spends its advertising money, some other circumstances also affect the Hungarian media market.
PRINT IN THE HAND In early July, Swiss publishing company Ringier offered its majority ownership in Népszabadság Zrt, the publisher of daily Népszabadság, for a symbolic €1 to the MSzP-aligned Szabad Sajtó Alapitvány (Free Press Foundation). Effectively the paper, which despite having nearly 50% less readers than a decade ago is still the leading daily in Hungary with about 65,000 readers, would simply become the press channel of a political party. Ringier had formerly wanted to purchase a 27% minority stake in Népszabadság Zrt from the foundation. The acquisition was scheduled for June 2012 until media authority NMHH and competition authority GVH blocked Ringier’s plan to merge with fellow publishing company Axel Springer, despite the deal being authorized in all other CEE countries.
As Népszabadság is extremely far from being profitable (in 2009, its losses reached HUF 1 billion), the foundation will think twice before taking a risk on the acquisition. But it seems financial uncertainty is not the only problem. According to insiders, the foundation is even considering whether to continue supporting Népszabadság, a paper that sometimes ventures to criticize the MSzP and is not unanimously popular among the party membership, or rather to invest in Népszava, a daily that has never disappointed MSzP followers, to say the least. Conspiracy theories are, of course, on the rise, claiming that only the government wins if the left leaning but far from rabid Népszabadság loses its quality and becomes overtly biased, as this would leave floating voters without a daily that, while relatively unbiased, remains a strong critic of the government.
ON THE RADIO When it comes to radio broadcasting, the market also seems to have been rearranged somewhat, throwing off the delicate balance of stations owned by politically motivated business players. Having won frequencies in such a controversial manner that it finally resulted in the resignation of the head of then-media authority ORTT, Class FM and Neo FM started broadcasting in late 2009, leaving Danubius Rádió and Sláger Rádió, the former much liked holders of the frequencies, silent. Popular uproar around the frequency tenders soon passed and Class and Neo were quickly the country’s most listened to radio stations, reaching hundreds of thousands of Hungarians every day. However, this idyllic situation did not last long. Econet, the original owner of Neo FM (and formerly an
owner of the left-leaning Radio Café), had to sell Neo in 2011 due to serious financial difficulties, although the radio station had managed to keep up its audience figures. But when it came to finances, Neo FM could not compete with Class FM in the longterm. While the latter, owned by government-aligned businessman Zsolt Nyerges, who has most recently appeared in headlines about the overwhelming success of construction company Közgép at state tenders, can hardly find enough time in its programming to air adverts for all the state-owned and progovernment companies, Neo FM was struggling to find any advertisers at all. No surprise then that, after accumulating HUF 800 million in debts to the media authority in not paying media service fees, the radio station announced bankruptcy on June 18 2012. ■
[ EXPERT OPINION ]
Birthmark Alert Many are learning the hard way that basting in the sun to get a nice tan might be the worst thing to do… Suntanned skin is still considered the sign of good health, despite the fact that melanoma cases are on the rise, and is undoubtedly related to excessive exposure to sunlight. Some are more prone to this most serious skin condition than others, and they had better do regular check-ups. Sun protection, UV exposure and safe tanning are public knowledge, yet the occurrence of melanoma has been dramatically increasing for decades, and many are paying a high price for taking it lightly. Avoiding the midday sun and using sun block with a high SPF do help, but are not enough for effective protection. ”Sunburn means that the skin was exposed to such high concentration of solar radiation that can damage the DNA in skin cells. As a consequence, skin cancer occurs mostly on areas most exposed to the sun: the scalp, neck, arms and hands, and women’s legs are the most prone to melanoma,” says Dr. Krisztina Siklos, a dermatologist at Dr. Rose Private Hospital.
“There are online guides about how to check birthmarks for signs of malign conditions, but it is advisable to have a proper medical check-up. Skin anomalies are often so minute that they are hard to detect with the naked eye. However, medical examination instruments can indicate possibly malign skin problems at a very early
stage,” Dr. Siklos says, calling attention to the importance of screening. “When a birthmark changes its shape, a suspicious spot appears on otherwise unblemished skin, let alone bleeding and lesions start to manifest, the cancerous cells have most probably already invaded the dermis, from where
they can spread through blood vessels and lymph nodes and metastasize elsewhere in the body.” “An annual check-up with a dermatologist to screen birthmarks is advisable for everyone, but those with numerous, or atypical birthmarks, should have a thorough inspection twice a year,” advises Dr. Siklos.
WHAT IS MELANOMA? Melanoma is the malign proliferation of pigment cells in the skin – the very cells that help your skin turn golden brown when exposed to the sun. Although rare – constituting a mere 2-3% of all skin tumors, unfortunately melanoma is the most grievous type of skin cancer. Metastasis to lymph nodes and internal organs – to the liver, brain and lungs – and to the bones can happen in a very early stage, and late diagnosis proves to be terminal in every other case. Early diagnosis reduces the risk of fatalities to 10%. www.drrose.hu
For an appointment, call (+36)1-377-67-37 or go online at www.rendelo.drrose.hu
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A sound business Sziget Fesztivál is celebrating its 20th anniversary and looking forward to welcoming its six millionth visitor this year. While the summer festival market has become increasingly cutthroat, Sziget has not only managed to survive, but was also awarded the grand prize of European Festival Awards this January. A week before the festival kicks off, Sziget founder and CEO Károly Gerendai takes the Budapest Business Journal backstage and talks about the delicate finances required in being the best. WILL THIS YEAR’S 20TH ANNIVERSARY SZIGET BE THE BEST YET? We definitely try to make every Sziget the best one yet, but everyone has different criteria to say which was the best for them. As a founder, we can talk about the financials as a criterion of success, but to me, for example, reviews and feedback we get matter a lot more. It’s also critical that we can steer clear of major conf licts, let alone accidents; that would ruin the mood. The weather is important, too, but no one
of these factors alone can make or break the success of the event. AFTER TWO MAJOR SZIGET EVENTS (THE VOLT FESTIVAL IN JUNE AND BALATON SOUND IN JULY), AND WITH THE BIGGEST YET TO COME, HOW DOES THIS YEAR’S BOTTOM LINE LOOK THUS FAR? This year has been rather controversial so far. We saw a decline at the Volt Festival [organized in Sopron, 210 km west of Budapest], and although I think it was a really successful event and had a great atmosphere, its financial figures were
substantially worse than we expected. Last year’s Volt Festival produced significant growth, but with this year’s plunge we’re almost back at 2010 levels. It might be partly because of its program, partly due to the crisis, but although the revenues more or less cover the expenses, the profit we expected is nowhere to be found. Balaton Sound [an electronic music festival organized near the eponymous lake in Zamárdi, 100 km southwest of Budapest], on the other
hand, managed to grow further following its success last year, although we’re talking about the same country, same crisis, and so the very same things should have affected this event as well. Part of the reason could be that, as Balaton Sound is positioned as a “premium” festival, it is targeted at people who are less affected by the crisis, and even if they are to some extent, they still have the money to spend on entertainment and fun. It all meant that the financial success of Balaton Sound far exceeded that of the previous years. We don’t have exact figures at this point, but the volumes look really promising. On a budget of a little below HUF 1 billion, this festival seems to have produced some HUF 300 million profits this year, which is the highest profit rate we have ever seen at an event we have organized. WHAT ABOUT SZIGET? DO YOU HAVE PRELIMINARY FIGURES A WEEKS AHEAD OF THE EVENT? What we see from Sziget so
› IN THE CASE OF SZIGET, THE
RATE OF CULTURE VERSUS THE MARKET IS STILL OVER 50%. IT USED TO BE MUCH HIGHER THAN THAT WHEN WE COULD AFFORD IT
CURRICULUM VITAE Károly Gerendai, Hungarian entrepreneur, founder-CEO of Sziget KFT, the organizer of various major cultural events in Hungary, started his career at 16 opening a rock club in Gödöllő’s community center. After finishing high school, he went on to manage Hungarian underground bands, including Sziámi. Gerendai co-founded the Sziget Festival with Sziámi frontman Müller Péter Sziámi in 1993. While he remained owner and CEO of Sziget, he launched various culture and gastronomy-related ventures, including Buena Vista Restaurant in 2001, Kultiplex in 2002, and Costes Restaurant in 2008. Costes was the first Hungarian restaurant to be awarded a Michelin star in 2010. Gerendai has been honored by various state awards, and he was named Entrepreneur of the Year by Ernst & Young in 2008.
far is mostly the result of the austerities we introduced after last year’s losses. Last year we were successful both with Balaton Sound and Volt, but not with Sziget. This was partly due to unforeseen expenses, such as the HUF 50 million rental fee we had to pay the Budapest Municipality for the first time in our history, or the HUF 100 million we were forced to spend on services coming from Budapest-owned providers, or the extra security costs in the range of HUF 10 million we had to implement
shortly after the Norway shooting disaster. Following all these, we had to drastically reduce our costs this year. Partly by re-negotiating prices with our suppliers, but where it seemed inevitable, we had to completely leave out services or program elements. Which is why we won’t have the Heavy Metal stage or the “Europe” stage this year. The volume of this year’s measures is around HUF 300 million, but since there are areas where costs are still growing, we had to save more than that elsewhere.
HOW DO THE REVENUES LOOK? What we see at this point is a slight decline in sales volume of roughly 10% (we are ahead of the event, so we can only mention time-proportional figures here), which is offset by a price increase, and a recent change in the VAT scheme that allows us to keep a bigger portion of the revenue generated by ticket sales. This means that altogether we will more or less meet last year’s revenues keeping the costs substantially lower. But I have to emphasize that there are
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AND YOUR OTHER TWO MAJOR EVENTS? I don’t think that there is an objective scale like this, though we have to note that many of Sziget’s programs (like world music, street theater or the presenting of civil organizations) fall into the category of “cultural mission”. But at the same time, this is also a very rational business decision too, as this is precisely what makes us unique and this is what makes Sziget stand out from the crowd of other festivals. So it’s more difficult to separate the two than it at first appears. All in all, my feeling is that in the case of Sziget, the rate of culture versus the market is still over 50%. It used to be much higher than that when we could afford it, but after generating a HUF 200 million loss last year, you simply cannot ignore market realities. Balaton Sound is a whole different story: it is based on a genre that, frankly, carries a relatively low cultural value, and very few “cultural messages”. Even if we try to show new and high quality things to its visitors, the rate of market-only decisions is around 80%. Volt is somewhere in between the two. It is more like Sziget in a way, but it’s a much smaller operation, with a very limited budget, so it has to be much less sophisticated. I would estimate it to be around 50-50 in its case.
a whole lot of unpredictable factors involved. So far we have completed around 7-10% of our daily pass sales, which is somewhat higher than last year’s figure, but still very low. The sale of daily passes is obviously hugely determined by the weather: a sunny or a rainy day can mean some 10,000 visitors plus or minus. This, multiplied by the price of the ticket is a gross amount of HUF 130 million for one single day. This level of uncertainty is virtually impossible to calculate with.
WHAT IS THE BASIC STRUCTURE OF YOUR INCOME? HAS IT CHANGED SIGNIFICANTLY OVER THE COURSE OF THE LAST FEW YEARS? There was a major change six years ago, when we decided to go entirely without state subsidies, whose rate was around 4% at the time. Other than that, ticket sales are still the biggest contributor, followed by sponsorship and advertising revenues and commercial revenues. The recent years also saw substantial changes, especially as we terminated our partnership with our main sponsor Vodafone just last
year. It means that the rate of sponsorship revenue dipped from around 24% to around 16-17% this year, which is a sizable change, considering that 1% in our budget means around HUF 30 million. On a positive note, the cashfree scheme we introduced two years ago resulted in a much better overview on the commercial value of being present at the event, which allowed us to re-negotiate prices with some of our commercial partners. Occasionally we had to reduce our prices, but more
often than not we saw that our price was too low compared to the value it represented to the vendor. This means that the ratio of the commercial income will be up from the neighborhood of 6-7% to 10% or higher. The VAT change I mentioned earlier (a 27% to 18% change in VAT rate) will also mean a HUF 30 million 40 million increase according to our calculations. ON A SCALE, WITH “CULTURAL MISSION” AT ONE END AND PURE BUSINESS RATIONALITY AT THE OTHER, WHERE WOULD YOU PLACE SZIGET
SZIGET IS A NON-POLITICAL EVENT. STILL, IT HAS A SENSE OF THE COSMOPOLITANISM ABOUT IT, WHICH IS NOT EXACTLY IN LINE WITH THE VALUES REPRESENTED BY THE INCUMBENT GOVERNMENT. DO YOU FEEL ANY DRAWBACKS BECAUSE OF THAT? Not anymore. Around the change of the government in 2010, we often felt that public offices, especially at lower levels, treated us as if we were “out of grace”. Interestingly, the rate of state subsidies in our budget was at its peak during the previous Fidesz government, at around 10%, but by 2010 this was not the case. By then, as I said, we didn’t receive any state funds whatsoever, and still, people were like “I like you, but you see, we’ll have to be extremely careful with you from now on”. It’s not that there were direct steps against us, or even negative intentions on the government’s part, but there were a few uneasy situations. I think it’s a thing of the past, though – we will be organizing the third Sziget since the current government took the oath of office, and by now I feel that everyone has realized that things have simply moved on. On another note, with the rise of the far right, we are more prone to attacks from extremist groups. Last year, for the first time, extremists who tried to
block the entrances and occupy the area openly attacked us. And, unfortunately, I don’t expect that things will improve in this area. The only thing we can hope is that extremism will never become the mainstream in Hungary. BUDAPEST MAYOR ISTVÁN TARLÓS MADE A NAME BY PASSIONATELY ATTACKING THE FESTIVAL EVERY NOW AND THEN AS A DISTRICT MAYOR. NOW HE’S RUNNING THE CITY: WHAT’S YOUR RELATIONSHIP LIKE THESE DAYS? Shaky. We always had our ups and downs, but basically we only had three major fights: two, when he was a district mayor, and one when he already headed the city. The first was about noise levels, and it was sorted out long ago. The second, when he tried without success to ban our Magic Mirror tent, a venue that represents the LGBT community, was also settled. The third, last year, the case of the rental fees, asking for money for things we were always granted for free, was ended by a compromise. He originally wanted much more money, but this HUF 50 million is still HUF 50 million more than we’d like to pay. Other than these arguments, we have a correct working relationship, and at times he is even helpful. This year, for example, there will be Sziget flags on Margaret Bridge during the event, which is a rare privilege for a privately owned festival. A few years ago, a listed company, Econet.hu Nyrt, acquired a 51% share of Sziget Kft. You are now rumored to be at the final stage of attempting to buy back 100% of your company. Do you think this transaction will ensure Sziget’s financial stability in the long run? It’s impossible to tell. At this point it’s a high-risk operation, and I’m certainly optimistic. We originally sold a part of our company to one of our strategic partners (Econet owned Rádió Café, Pesti Est and various other ventures at the time), in order to make our financial background as solid as possible. Unfortunately, Econet got into a troublesome financial situation and started to use its share in Sziget as a collateral security, when it was unable to fulfill its obligations. We had to intervene, saying that if we have to pay anyway, we’d rather pay for our company and buy it back than to pay for Econet’s commitments as a guarantor. We expect to hear back from our bank later this week, and if we get the loan we applied for, we’ll buy back 100% of Sziget Kft. If things turn out well, it might become a very important milestone for us, but it is yet to be seen. ZsB
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Festivals running at max volume Hungarian Tourism Zrt named 2010 “The Year of Festivals”, but organizing such events has become part of the mainstream in recent years. It’s almost an obligation for any city, town or region that wants to mark its place on the cultural map of Hungary to host at least one festival over the course of the year. From goulash to pálinka, and chamber music to “naked tracking”, there is a festival for virtually anything and everything. The market is already well beyond saturated, but if organizers target their niche well, success might still come their way.
of festivities are built on an existing market demand, and usually work well. The task becomes a lot more difficult when the goal, as in the case of more “serious” events, is to get the city or region that organizes the festival into the news. Considering the strong competition for attention, this
ple, its maximum capacity, but through the European Broadcasting Union, is followed by some 80 million radio listeners, making it Hungary’s second biggest event in terms of international audience, surpassed only by the Formula One Hungarian Grand Prix. “Radio broadcasting produces
says that the city of Kaposvár has contributed HUF 45 million, and the National Cultural Fund (NKA) another HUF 15 million, highlighting that state subsidies add up to “less than half of Kaposfest’s budget”. And while awareness of Kaposfest is basically within the statistical margin of error (around 2%)
this means visitors have had great experiences at previous festivals, and that the event’s reputation is high. Another approach to attracting the limelight is to make things as extreme as possible, which is exactly what the organizers of the sixth Wingsuit Boogie Festival aim for. Orga-
is by no means easy, even at the peak of the silly season. Some focus on history, others pick a niche as odd as possible, and still others have only quality and uniqueness on their minds. “Crowded music festivals are like the McDonald’s of culture,” says György Bolyki, director of the Kaposfest Chamber Music Festival, and member of the renowned vocal ensemble the Bolyki Brothers, before adding “On the other hand, we consider Kaposfest the Costes of festivals”. Irony is absolutely intended here: Costes, Hungary’s first Michelin-starred restaurant is owned by Károly Gerendai, who happens to be the founder and chief organizer of Hungary’s largest music festival, Sziget (see our interview with him on previous page). Kaposfest surely has a different idea of success: the festival is attended by 15,000 peo-
zero income for us,” Bolyki reveals, saying that Kaposfest’s one purpose is to place Kaposvár on the world’s cultural map. Although the director is reluctant to reveal his full budget, he
among Hungarians, the festival has never had sales issues. “Our concerts are usually sold out in March, long before we publish the actual programs,” Bolyki claims, insisting that
nized in Siófok (110 km southwest of Budapest), this event is the biggest of its genre in the world. Participants jump from a chopper at 4,000 meter wearing special suits (a “wingsuit” in
BBJ ZSOLT BALLA
While the media’s attention is mostly garnered by a few major events attended by tens of thousands of visitors, according to program guide website Port. hu, at the time of the writing of this article there were 81 festivals simultaneously ongoing across Hungary. This volume of supply is impossible to keep up with, especially since these events cover an extremely broad range of subjects from the Beatles to wakeboarding, and from stand-up comedy to medieval tournaments. The aims of these festivals basically fall into one of two categories. Some aim to offer programs to tourists who are already in the region, and want to see some direct profit in return, like the gazillion food and wine focused festivals in various towns and villages around Lake Balaton. These events usually consist of a few wooden booths offering food and beverages at higher-than-usual prices, and perhaps a stage, featuring local talents and one or two Hungarian “stars”, making good money on a warm Saturday night. These types
one category and a little more than a parachute in the “naked tracking” category), and try to get as far horizontally from the location of the jump as possible during freefall. A good indication of how risky this sport is that this year’s competition was renamed “Markó Mike’s Wingsuit Boogie” in memory of the late 2010 winner. Strategies may differ, but at the end of the day, if the primary objective is fame and money, it is best to organize a festival that features A-class performers and draws in tens of thousands of visitors. Two of the most successful events of this kind, which have manage to succeed in a market dominated by Sziget Kft’s three festivals, are the Hegyalja Fesztivál organized in Tokaj (230 km northeast of Budapest) and the Ördögkatlan Fesztivál, located in the Villány wine region (220 km south of Budapest). Neither of these festivals have published this year’s financial results to date, and Ördögkatlan will only be finished after this issue of Budapest Business Journal is closed, but visitor numbers, programs and preliminary figures suggest that these two festivals will again close successful years. Hegyalja, for one, managed to draw in 85,000 visitors in five days, with some 200 performers including international stars such as the Stereo MCs, Parov Stelar and Pendulum, and Hungarian underground groups like 30Y, Kiscsillag and Nemjuci. Ördögkatlan, which aims at a more intellectual and older target audience, featured 111 concerts, 80 theater performances and dozens of literary and art events. ■
SAFETY FIRST “There are more people in the city of Vác who have never, in their lives, seen a storm like this than those who have,” says Mihály Vigh, CEO of Váci Városimázs Nonprofit Kft, chief organizer of the city’s yearly summer festival Váci Világi Vigalom. This year’s event was interrupted by a vast thunderstorm that toppled trees and chimneys across the city, still the festival, which had multiple thousands of attendees when the storm struck, managed to get away with four minor injuries only. “Of the HUF 23 million budget of our festival, roughly half can be spent on performers and services, the rest must be dedicated to infrastructure and safety costs,” the CEO explains, saying that he had previously thought colleagues from the police and fire service demanding at times, but this storm proved their concerns were well-founded. The event was called off by city mayor Attila Fördős on Sunday evening, when several millions worth of performance was yet to come, including the main concert of the day, and the city’s yearly fireworks display. Festivalgoers were evacuated without major turmoil or panic. “Safety considerations, clear communication and accurate administration are of primary importance,” Vigh explains, saying that the security system passed the exam, although there are still lessons to be learned from the experience. “In the first few minutes of the storm, the GSM network gave up, and went bust. Since these minutes are critical, and we can’t afford to lose contact with one another, we might opt for walkie-talkies instead in the years to come,” he concludes.
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Budapest Business Journal | Aug 10 – Sept 06
Engineering an exit
Fixed-rate repayment
Dreaded cloud migration
Job offers from MNCs might keep engineers in Hungary
Majority confident on future repayments
Many IT pros dread cloud deployments
38%
62%
OF NEW GRADUATES WOULD RATHER WORK ABROAD
Nearly 40% of engineering students would work abroad, and 13% of them have already started to pave the way for a career in another country, a survey conducted by Telenor Magyarország reveals. The survey of graduate students at the Budapest University of Technology finds that most would take jobs in Austria, Germany, Great Britain, Switzerland and the U.S. The majority of them would want to return to Hungary sooner or later, however: A little more than 20% said they would come back after one or two years, 39% would return after three to five years, and 31% of them would stay longer before settling down in Hungary again. Only 10% of the respondents said they would plan to stay abroad for good. The survey also looked at what would keep graduates in Hungary. Not surprisingly, a competitive salary tops the list. This was followed by career opportunities and stability issues: If the opportunity of professional development was offered to graduates, in line with a reasonable work/life balance and a stable position, graduates would consider staying within the country’s borders. When asked where these conditions could be provided, more than three-quarters of the queried mentioned the private sector – in particular, multinational companies. As for what graduates expect from MNCs and SMEs, the picture is quite balanced when it comes to professional development opportunities. Some 57% of respondents said they expect a chance for career development from MNCs, and 55% of them from SMEs. Inspiring tasks are also important: 56% of the students think multinationals could provide such tasks while 52% of them opted for SMEs in this respect. According to the survey, a healthy work/life balance can be linked to small- and medium-sized companies, while dynamism and development are associated with multinational companies. More than half of the respondents said they would change plans and stay in Hungary if they received an adequate offer on their field from an MNC. PF
What would convince you to stay home?
More/more stable job opportunities Chance for professional development Modern technology, better work environment Higher living standards Better carrier choices Healthier work/life balance Other
Source: Telenor
Those with foreign currency-denominated loans wishing to participate in the government’s fixed-rate repayment assistance program are having trouble with monthly repayments now but believe that they will be able to pay back the increased installments when the fixed-rate repayment period is over, according to research by Budapest Bank. The prolonged rise in the Swiss franc exchange rate – the main mortgage borrowing currency in Hungary – and the deterioration of job opportunities and real income has put a significant burden on households. On average, 40% of the family budget is spent on mortgage repayments every month and 52% of those answering to the survey have monthly repayments higher than HUF 70,000. Most (81%) wish to participate in the scheme due to permanent or temporary repayment problems. Only 16% of respondents have no problems with repayment and want to join the program only because of the favorable conditions. After joining the fixed-rate repayment assistance program, respondents expect a 10-30% decrease in monthly installments, and 47% plan to put aside some or the entire amount thus saved. The most common targets of those willing to save are to facilitate future loan repayments (37%), to create reserves (20%), or to support children (13%). Only 6% of them hesitated over the fate of their savings. Those willing to ‘eat up’ partially or entirely the money ‘won’ through the installment reduction typically intend to spend it on daily expenditures, like purchases and consumption (37%), but many of them also want to pay installments on other loans (22%). Based on the answers, understanding of what will happen following the fixed-rate repayment period is highly incomplete: 39% of respondents are not aware of the fact that monthly installments will rise after the maximum five-year assistance program, 8% believe that installments will further decrease, and 22% have no idea what will happen once the program expires. KK
Are you going to able to pay the increased installments after the expiration of fixedrate repayment scheme?
Higher and more competitive salary
82% 21% 15% 13% 13% 10% 10% 54%
33%
OF MORTGAGORS CONFIDENT REPAYMENT WON’T CAUSE ANY PROBLEMS
A recent survey by Cisco reveals that to date, just 5% of IT decision-makers have been able to migrate at least half of their total applications to the cloud. By the end of 2012, this number is expected to rise significantly, as one in five will have deployed over half of their total applications to the cloud, the survey predicts. The Cisco Global Cloud Networking Survey 2012 surveyed more than 1,300 IT professionals worldwide to discover the top priorities and challenges they face when moving applications and services into the ether. In order to successfully move more applications to the cloud, the majority of respondents cited a cloud-ready network as the biggest infrastructure element required for further cloud deployments, ahead of a virtualized data center or a service-level agreement from a cloud service provider. Almost 40% of those surveyed said that they dread network challenges associated with private or public cloud deployments so much that they would rather get a root canal, dig a ditch, or do their own taxes. In a clear sign that many IT organizations are still considering and planning cloud migrations, nearly one-quarter of IT decisionmakers said that during the next six months they are more likely to see a UFO, a unicorn, or a ghost before they see their company’s cloud migration starting and finishing. Without proper processes and planning, 31% of respondents said they could train for a marathon in a shorter period of time than it would take to migrate their company’s applications to the cloud. Cisco also carried out a non-representative survey in order to shed light on Hungarian IT professionals’ perception of cloud migration. It turned out that 33% of the queried companies already use cloudbased solutions, and a further 16% has the introduction of such services in the pipeline. The majority (40%) migrated their e-mail system, followed by teamwork applications (38%). Calendar and office applications and business software are at the bottom of the list with 21%, 19%, and 17%, respectively. PF
Most critical infrastructure for cloud deployments
Yes, repayment hasn’t caused particular problems by now Yes, because I hope that my financial situation will improve in the next 3-5 years I’m afraid, I won’t be able to repay
cloud-ready network virtualized data center service-level agreement other; no answer
I don’t know, but I hope that the government will offer a smart solution I don’t know, But I hope banks will offer a smart solution Other
Source: Budapest Bank
OF HUNGARIAN COMPANIES USE CLOUD-BASED SOLUTIONS
Source: Cisco
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SpecialReport
Five-star hotels: uplifting rollercoaster The Hungarian hospitality and tourist business survived the grounding of national airline Malév in February and shows promising signs of new life after years of decline; however, the path of growth is still shaky and far from smooth. BBJ KRISZTIÁN KUMMER
The collapse of Hungarian national carrier Malév in February set alarm bells ringing in hotels in Budapest and beyond. The airline was responsible for some 40% of the near nine million passengers using Liszt Ferenc Airport in Budapest last year. However, months after the grounding, hotel owners can stop worrying, according to the latest available data from the Hungarian Statistics Office (KSH). Foreign guests spent 1.064 million nights in public accommodation establishments, an 8.8% year-on-year increase in number and an 11% year-on-year increase in nights. However, the EUR/ HUF exchange rate was 294 in May 2012, HUF 27 (10%) weaker than a year earlier, which can partly explain tourists’ sudden interest in the country. Foreigners accounted for 60% and 75% of tourism nights and accommodation fees, respectively. There was a year-on-year increase in the number of nights spent by guests from all the major source markets except for the United Kingdom. Arrivals from Germany rose again and an especially dynamic increase was seen in arrivals from Austria, Italy and Russia. In hotels accounting for a considerable part of international arrivals – except for one- and twostar units – all categories saw a significant increase. However, budget airlines jumping in to fill the gap left by Malév have brought about a significant change in the
composition of visitors to favor low-budget tourists: in the case of five-star hotels, the number of foreign guests dropped by 4%, while tourism nights increased only by 0.9% in May. In the observed period, room occupancy in hotels was 48% on average; within this, the occupancy rate was 71% in five-star units. Also, average room rates climbed back to levels not seen in years. After a slump in room rates in 2008 and 2009, the average rate in five-star hotels increased to HUF 38,395 in May from HUF 35,077 a year earlier, surpassing the 2008 level of HUF 37,641. However, there are still signs that the Hungarian hotel business is not performing as well as its regional peers. Occupancy rates and revenue per available room (REVPAR) in Hungarian hotels lagged behind those in Austria and the Czech Republic in the first quarter of the year, the Hungarian Hotel and Restaurant Association said. Based on data compiled by STR Global, occupancy at Hungarian hotels during the period was 44%, below the 55.6% rate in Austria and the 49.4% in Czech Republic. REVPAR in Hungary was just €24.3, compared to €50.3 in Austria and €31.9 in the Czech Republic. NEW MARKETS ON THE HORIZON Beyond the traditional target countries of Europe and North American, hotel advertising campaigns now try to lure new visitors from regions previously not targeted. “During challenging economic times, most businesses will focus on new industries or markets to supplement any decline due to economic circumstances. We are no different and our market portfolio has diversified and we are welcoming guests from ‘new markets’ including Asia, Latin America and India,” said Yves Giacometti, general manager at Four Seasons Hotel Gresham Palace Budapest. More and more tourists arrive in Budapest from the Middle East. Visitors from Kuwait, Saudi Arabia and the UAE spend five times more
in a hotel than those arriving from Western Europe, according to the experiences of the five-star Buddha-Bar Klotild Palace. That the importance of the Arab world is growing to previously unknown levels was marked by the fact that Hungarian Prime Minister Viktor Orbán joined Jordanian investors at the opening of the hotel in June. “Jordan is a very important partner for Hungary in the Middle East,” Orbán said, adding that opening to the Arab world is crucial for Hungary. Visitors from the Arab world might spend more money, but they have different expectations as well. It is important for them to have a prayer rug in the room, and possibly an arrow pointing toward Mecca. Deeply religious guests will sometimes ask for the removal of statues as well. At the Bud-
dha Bar hotel, Muslim food is served on request, as the chef is Syrian, and is familiar with Arab customs and the language. NEW STARS SHINING From July 1 2012, hotels may only use the Hotelstars classification system to indicate the level of services they provide, replacing the earlier system of stars. Joining the system is voluntary, but hotels not wanting to join are not allowed to use stars acquired through other classification systems. The Hotelstars classification system was also made a national trademark under an agreement signed by the Hungarian Hotel Association and Ministry for National Economy in June. The Hotelstars classification criteria are transparent and can be easily understood by guests, said State Secre-
tary Kristóf Szatmáry, who signed the agreement on behalf of the Government. According to Hungarian Hotel and Restaurant Association chair Andrea Kopócsy, some 18,000 hotels in 11 countries use the Hotelstars system at present, but it is continuously expanding. In Hungary, 380 hotels have registered for classification and 225 have already been classified, she added. HOTEL BUSINESS CAUTIOUSLY OPTIMISTIC Rural hotels expect an increase in occupancy, while five-star establishments in the capital would rather see an increase in prices according to a survey by industry analyst Magyar Hotel Monitor. But sectors of Hungarian hotels are just about cautiously optimistic, expecting fluctuating processes in H2, both in terms of achievable
prices and occupancy. For wellness hotels, the unfavorable state of stagnation is expected to remain throughout the rest of the year. Spa hotels with medical treatments are expected to be able to improve their occupancy rates, and boutique/ fashion hotels will continue to follow favorable trends, according to the analysis. But in the longer-term, the future of the industry depends on foreign demand for Hungary as a tourist destination and favorable changes in air connection capacity, said Kempinski Hotel Corvinus Budapest’s sales and marketing director, János Parti. “We believe that Hungarian tourism operators will cooperate more efficiently in the future, making Budapest more and more attractive to visitors looking for a higher level of services too,” Parti added. ■
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From rock’n’roll to hardcore business The first boutique hotels sprang up more than 30 years ago. Fulfilling the thirst of customers for something new and fancy, boutique hotels are ready to serve all around the globe, however, the rock ’n’ roll lifestyle of golden days has changed to professionally designed rooms, atmosphere and service. BBJ KRISZTIÁN KUMMER
It all started, as so many trends do, in London in 1978. In a side street of South Kensington, former actress Anouska Hempel made her name and fame
with her hotel, the Blakes. It had only 41 rooms, some of them as small as broom cupboards, a tiny cool bar, and a restaurant more resembling a black hole than a sacral Chakra of gastronomy. Yet, if you were a rock and roll figure, or just a wealthy eccentric, you stayed at Blakes. But however well known Blakes was, the funky chic – a term derived from a little known essay by Tom Wolfe in Rolling Stone Magazine – of boutique hotels had to spread from London through Paris to the USA to achieve fame and fortune on the West Coast at LA’s Mondrian, and in New York’s definitive first statement, Morgans. The motto was simple: Life imitating art, hospitality imitating rock ’n’ roll. Throughout the decades, boutique hotels appeared across the globe and also became somewhat tamer. Nowadays there are way too many boutique hotels to
spot rock stars and actors in each and every one of them. However, their appeal is still rising despite the harsh economic conditions, even if there is no correct – or widely accepted – definition of what a boutique hotel really is. Some ten years ago, Architecture NOW defined the phenomena from the design of point-of-view: “Boutique hotel has become shorthand for a hotel with a highconcept design and unique atmosphere.” Any boutique hotel owners will tell you that carefully selected equipment, well-designed rooms, a facade that grabs the attention of passersby and all the little details are essential to creating a warm and welcoming atmosphere. “We choose the slogan ‘Enjoy the difference’, indicating the aim of creating a ‘second home’ for our customers for the few days they spend in Budapest,” Boutique Hotel Budapest general manager
Árpád Kaltenecker explains. Size matters in the hospitality business as well, but in an opposite direction, when it comes to the boutique sector: the smaller the better. Contrary to most hotel chains, boutique hotels have only 50-100 rooms. And not just because huge hotels are often impersonal and easy to get lost in, but also because these buildings sometimes create an atmosphere of a suburban housing estate. And atmosphere, as the sum total of the physical facilities and all the intangibles that comprise a memorable hotel experience, may be the single most critical factor a boutique hotel has to offer. That includes decor, ambience, personalized service, the attitude of management and staff, and how all these ingredients must combine to create a genuine sense of intimacy. All-in-all, an intimate atmosphere may be the one absolutely essential com-
ponent without which a hotel cannot be called boutique, and that has to be caring, warm, personalized, yet totally professional. But all the attention to detail by hotel designers, owners, managers and staff, pays off. “Tourists turn to smaller establishments that can provide something new, something additional,” Lánchíd 19 hotel sales director Ágnes Dömötör says. Lánchíd 19, which claims to be the first “design hotel” of Hungary, really focused on the details: a diver morphing into wavelets on the façade, the archaeological remains of a water tower below the stairs, the overhead glass suspension bridges holding sandblasted fingerprints all want to enchant and entertain. And, as a matter of fact, size matters in times of crisis too. Fewer rooms are easier to rent, so even when larger chain hotels are suffering to maintain previous levels of occupancy, bou-
tique hotels can outperform traditional establishments. “We felt the impact of the crisis, but lowered the room prices a bit, so with a higher occupancy, we could make up the shortfall of last year,” Ma Maison boutique hotel operation manager Gergő Franciscy said. However, the location of these smaller hotels is also crucial, as lower room rates have not hit downtown Budapest as hard as other parts of the city. One way or another, boutique hotel owners can dream large, as the small hotels’ market share is growing constantly in Hungary, according to market participants. Most customers arrive from “traditional” countries of origin, such as Germany, Italy, France and the homeland of boutique hotels, Great Britain and the United States, looking for something special and something new that only a well-managed boutique hotel can provide. ■
Hungarian countryside appears on the air map While the collapse of Malév has pushed 20% of passengers of the former Hungarian national airline to travel from Vienna or Bratislava due to he lack of route alternatives in Budapest, the improving capacity of Hungary’s countryside airports may help somewhat balance this loss. BBJ ÁGNES VINKOVITS
Hungary’s airport operators might look at Austria and Switzerland with envy since, although these countries are smaller than Hungary, their inland air transport is blooming, carrying thousands of locals on a daily basis. Since Budapest Ferenc Liszt International Airport, the country’s main airport in the capital, is
on the outskirts of the city, a 40-minute drive from the center, inland flights do not make much sense here. But when it comes to attracting passengers from foreign countries, Hungary’s international countryside airports, namely Airport Debrecen in eastern Hungary and Hévíz-Balaton Airport, more widely known as Sármellék, in the Trans-Danubian region are becoming more successful. MAIN ATTRACTION Although there was a successful trial flight in May from the south Norwegian city of Stavanger to Sármellék, it is still only a hope of László Könnyid, the mayor of neighboring Hévíz, to make such charter flights regular and bring Norwegian guests “with strong spending power” to the region on a regular basis. But other routes are already well established. Lufthansa, for instance, even increased the capacity of its charter flights, operating between four German cities and Sármellék in April to four times a week. Tourists
arriving at Hungary’s TransDanubian international airport mostly end up at the hotels of popular bath cities such as Sárvár or Zalakaros. Wellness tourism is also the main driver for Hamburg Airways’ flights departing from the German city and landing at Debrecen: hotels in the second city and nearby Hajdúszoboszló directly benefit from these charters. Tourism to Debrecen is also boosted by Wizz Air flights from London’s Luton Airport, launched on June 18, and from December 2012 it will also benefit from new charters from Eindhoven and Milan. With these two new routes, Wizz Air estimates it will bring no less than 100,000 passengers to Debrecen in 2013, creating about 100 new jobs in the city. The airline hopes the new routes will be popular among young Dutch and British partygoers, as, according to the airline, they “do not really mind where they are as long as they are surrounded by pretty girls and alcoholic drinks”.
Debrecen Airport
GREAT AMBITIONS Debrecen hopes to get its biggest boost, however, from health, or more precisely dental, tourism. Hungarian dental services have a good reputation in Western Europe, and bad teeth can be fixed here far cheaper than, for example, in the UK. As such, dentists, together with other health service providers in the region, have already joined forces and
are now promoting their services through London-based partners and travel agencies. While Debrecen Airport’s managing director Tamás József Meleghegyi admits that the airport is regional and does not intended “to become Ferihegy’s [the old name for Budapest’s airport] competitor”, another Hungarian airport company did have more ambitious plans: Alba Airport once
planned to host international flights in the western Hungarian Börgönd, near Székesfehérvár, and thus become a challenger of the capital’s airport. However, the development came to a halt after encountering “unexpected difficulties” such as the need for gopher relocation and finally, given the economic circumstances, the investment was called off in April 2012. ■
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Budapest Business Journal | Aug 10 – Sept 06
An innovative approach to the hotel business
Photo: Péter Ákos / MarinArt
The Corinthia Hotel Budapest received the Traveler’s Choice in luxury category this year from the world’s largest travel site TripAdvisor, was awarded with a Certificate of Excellence in 2011 and was among the top 25 in the Best Luxury Europe Hotels category a year earlier. The prestigious hotel in downtown Budapest now has a new man at the helm. General manager Thomas M. Fischer, who took up the position this spring, talks about his goals and his first few months in Budapest, and shares his future expectations.
CURRICULUM VITAE Thomas M. Fischer took over the GM position at the Corinthia Hotel Budapest in March. He has some 17 years of experience in the hotel industry. Before coming to Budapest, he worked as general manger of the Kempinski Hotel Gravenbruch in Frankfurt, Germany. Prior to that, he was hotel manager at the Kempinski Lufthansa Center in Beijing, China. He also gained experience in various senior executive positions at other international hotels in Germany, London and the Middle East. He graduated in hotel and catering management from the Bavaria Hotel School in Germany and completed his MBA at Reims Business School in France in 2010.
Q: WHAT WERE YOUR GOALS WHEN YOU WERE APPOINTED TO THE ROLE OF GENERAL MANAGER AT THE CORINTHIA HOTEL BUDAPEST THIS MARCH? A: Corinthia Hotel Budapest had always been the flagship hotel of the Corinthia chain. However, when Corinthia Hotel London opened last April, it somewhat took over this role and set the tone for all other hotels in our chain. Now, I would say that we are just a notch behind. So one of the main goals is to keep in line with our new brand vision, to bring us closer to Corinthia London. That requires mainly looking at the physical assets of the building. In terms of service delivery and facilities, we are prob-
ably quite close. At the same time, I see lots of opportunities in Corinthia Hotel Budapest: from a facility perspective, from a construction and flexibility point of view, and the number of options that we have here to offer. At the hotel in Budapest it’s not about reorganizing things that have worked in the past, because there has been a lot of good work being done over the past ten years since the hotel has been opened. It has a good reputation and high level of services; the fact that Corinthia Hotel Budapest has been awarded with prestigious professional awards and recognitions every year proves this. So there is not
much that we really need to change here. It’s a very good base and at a very high level, so our task is just working to make it even better every day. Q: WHAT HAVE YOU ACHIEVED SO FAR? A: A lot of what I just said is mainly strategic goals. However, we have already completed several tasks since I came on board this spring. We are also focusing more on innovation, both in services and products. We are applying new and innovative approaches that distinguish us from our peers, such as a new recruitment concept. When I arrived to take over the leadership of the hotel, I felt that the
marketing, PR and communication areas had been underdeveloped. So we have restructured our set-up and the way we work. A good example is how we recruit our management: for example our new communications director, Márta Róna, does not come from the hotel industry. This choice was deliberate; I think this approach gives us an opportunity to look out of the box. We did the same when we hired our new chief engineer: he has never worked in a hotel before. So we have different people from different industries, which I think opens eyes to a whole new ballgame in many ways, because they look at things differently. This is actually what the company does across all its hotels: we try to see what’s working in other industries, and whether these practices can be applied in the hotel business. There are industries that are much more advanced than the hotel business when it comes to technology. For instance, you can purchase things in 5,000 shops in Germany with your mobile phone, or buy your air ticket with your Smartphone anywhere in the world. The hotel business is a bit behind in these terms, so we need to catch up in all sorts of ways. Q: YOU HAVE HELD EXECUTIVE POSITIONS IN THE HOTEL INDUSTRY IN YOUR NATIVE GERMANY, BUT ALSO CHINA AND RUSSIA AS WELL AS IN THE MIDDLE EAST. WHAT IS THE BIGGEST CHALLENGE YOU HAVE TO FACE WHEN TAKING OVER A POSITION IN A FOREIGN COUNTRY AND WHAT WAS THE CASE IN HUNGARY? A: I think that hotel business is very international. Our guests come from 40-50 different countries; there are different cultural aspects you have to be aware of and face every day. Of course, working internationally is very different than going on a holiday.
You are much more exposed to cultural shock. I think the biggest challenge when you go to a different country is the cultural aspect, and also personal habits. You need to know a little bit about the pitfalls. If you’re not acquainted with all the dos and don’ts, you can easily make mistakes. I am very lucky in this respect, because I’ve always worked with very experienced professionals who gave me advice that helped me through the difficult times, especially at the beginning. One can be in the hotel business for years and know everything about it, but still not know anything about the country or the city one arrived in. But if you have a good superior or a good supporting team – as is the case in Hungary – that can help a lot. Q: HOW WERE YOUR FIRST WEEKS IN HUNGARY? A: There was a different situation when I arrived in Hungary. My predecessor left several months before I took over, so the team here and my deputy were holding the fort before my arrival. So when I arrived I didn’t have the opportunity to relax, and although the team here did an excellent job in running things smoothly in hectic times, it has been hard work right from the beginning. Unfortunately, I still haven’t seen several sights of the city, but I’m doing my best to catch up, as I’m always curious about the country I live in and want to know more about it. But nonetheless, I had a very positive first impression of Hungary, especially of the people here. They are all very polite and friendly, and the team in the hotel is very experienced too. So I consider myself rather fortunate. But at the same time, I came at a moment that showed a totally different sight because of what hap-
pened to national airline Malév. It was not the nicest time being in Hungary – from a business perspective, as you can imagine, it didn’t have such a positive effect on us. The first two weeks after my arrival were literally crisis management. The entire hotel industry felt the negative effects, I think. Looking at the five-star hotel business in the city, I’m almost certain that there are not many hotels this year that are really showing great improvement from last year. Q: WHAT CAN MAKE UP FOR THE LOSSES IN YOUR OPINION? A: As a result of the current situation in the Hungarian air travel market, the proportion of leisure and MICE (meetings, incentives, conferences and events) customers have changed. We need to accommodate our strategy to the new situation, and to make the best out of our existing services. We will put serious efforts into making our glorious and unique Royal Spa even more popular, especially as our caring and professionally trained health and beauty therapists can provide a full complement of treatments. Moreover we see massive opportunity in our Rickshaw restaurant where we are waiting our guests with five-star service and traditional Asian cuisine. So hopefully we will see more leisure customers coming, and we believe that the drop in MICE customers we had this year will probably bounce back next year. Therefore we are actually quite positive about 2013; I think we’ll see an upward trend. We do not foresee a major swing back into positive territory but things are going in the right direction. We are assuming a slight increase from this year to the next. However, we also feel that the market will be even more competitive than it already is. ■
2 BusinessPartnerWatch 17
BBJ
WWW.BBJ.HU
Budapest Business Journal | Aug 10 – Sept 06
Five-star hotels in Budapest
1
CORINTHIA HOTEL BUDAPEST (FORMERLY GRAND HOTEL ROYAL)
4,945
BUDAPEST MARRIOTT HOTEL
3
4
www.marriott.com/hotels/ travel/budhu-budapestmarriott-hotel
KEMPINSKI HOTEL CORVINUS BUDAPEST www.kempinski.com/ budapest
HILTON BUDAPEST www.budapest.hilton.com
4,460
478 342 22 17
4,240
417 326 33 10
159 159
3,098
644 322 23 24
» »
2,380
436 192 26 8
2,132
330 230 18 13
180 180
642
230 110 7 3
79 89
540
230 21 76 4
110 110
473
132 61 7 2
LE MERIDIEN BUDAPEST 5
6
www.lemeridienbudapest. com
HILTON BUDAPEST WESTEND (WEST END SZÁLLODAÜZEMELTETŐ KFT) www.budapest-westend@ hilton.com
7
HOTEL PRESIDENT BUDAPEST www.hotelpresident.hu
8
ADINA APARTMENT HOTEL BUDAPEST www.adina.eu
9
10
MAMAISON HOTEL ANDRÁSSY BUDAPEST www.mamaison.com/budapest.andrassy-hotel.html
ST. GEORGE RESIDENCE ALL SUITE HOTEL DE LUX
» 223
www.stgeorgehotel.hu
BOSCOLO BUDAPEST (FORMERLY BOSCOLO NR NEW YORK PALACE)
www.budapest.boscolo.com/ residence
FOUR SEASONS HOTEL GRESHAM PALACE NR BUDAPEST www.fourseasons.com/ budapest
26 26 2
149 149
131 131
»
–
–
–
–
–
–
–
–
89 99
»
–
–
»
–
95 69 69 17
130 130
»
358 179 17 6
310 310
210 210
–
–
» »
–
–
–
–
–
–
1992 2010
–
1977 2009
–
–
» »
Rentable event hall
1997 2009
–
–
–
–
» »
–
»
2000 2000
2000 2012
2008
–
»
Currency exchange, power stations, NOBU Restaurant
»
–
1989
–
YEAR ESTABLISHED YEAR LAST RENOVATED
OTHER
EVENT MANAGEMENT
WEDDING
SPA SERVICE
BABYSITTING
NO-SMOKING ROOMS
CAR RENTAL
INTERNET IN ROOMS
GIFT SHOP
GARAGE
LAUNDRY
BEAUTY SALON
FITNESS CENTER
CAFÉ / BAR
58 58
332 254 98 17
budapest.boscolohotels.com
BOSCOLO LUXURY NR RESIDENCE
159 159
»
www.corinthiahotels.com
2
828 414 31
SINGLE RATE (EURO / NIGHT) DOUBLE RATE (EURO / NIGHT)
BUSINESS CORNER
COMPANY WEBSITE
TOTAL NET REVENUE (HUF MLN) 2011
RESTAURANT
RANK
SERVICES NO. OF BEDS NO. OF ROOMS NO. OF SUITES NO. OF MEETING ROOMS
–
–
–
2007
»
2007
»
2006
»
2011 –
2004
»
NO. OF FULL-TIME EMPLOYEES ON MAY 1, 2012
Ranked by total net revenue in 2011
OWNERSHIP (%) HUNGARIAN NONHUNGARIAN
TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR
ADDRESS PHONE FAX EMAIL
»
– International Hotel Investment Plc (100)
Thomas M. Fischer – –
1073 Budapest, Erzsébet körút 43–49. (1) 479-4000 (1) 479-4333 royal@corinthia.com
200
– CEE PropertyInvest Inmobilien AG (100)
Robert Grader Thomas Mock –
1052 Budapest, Apáczai Csere János utca 4. (1) 486-5000 (1) 486-5005 budapest.reservations@ marriotthotels.com
250
– Corvin S.A. (90), Kempinski Hotel S.A. (5.20), Rolaco Holding S.A. (4.80)
Emile Bootsma Péter Folk Ildikó Dudás
1051 Budapest, Erzsébet tér 7–8. (1) 429-3777 (1) 429-4777 hotel.corvinus@ kempinski.com
190
– (100)
Zoltán Árvai – –
1014 Budapest, Hess András tér 1–3. (1) 889-6600 (1) 889-6644 info.budapest@hilton.com
Adrian Gray Friedhelm Schulz Julien Daubas
1051 Budapest, Erzsébet tér 9–10. (1) 429-5500 (1) 429-5555 concierge.budapest@ lemeridien.com
114
West End Szálloda Ingatlanhasznosító Zrt (99.67), West End Beruházó és Kereskedelmi Zrt (0.33) –
Jan Ebsen Thomsen – –
1062 Budapest, Váci út 1–3. (1) 288-5500 (1) 288-5588 info.budapest-westend@ hilton.com
36
József Gerendás (100) –
Imre Alker Erika Verebélyi Médea Kui
1054 Budapest, Hold utca 3–5. (1) 373-8200 (1) 373-8250 info@hotelpresident.hu
25
– (100)
Angéla Gergye – –
1133 Budapest, Hegedűs Gyula utca 52–54. (1) 236-8888 (1) 236-8889 abud@adina.hu
19
– Hospitality Invest SARL (100)
István Nagy-Szász Zsuzsa Batykó Gergő Franciscy
1063 Budapest, Andrássy út 111. (1) 462-2118 (1) 322-9445 reservations.andrassy@ mamaison.com
23
» –
Gábor Jusztin – –
1014 Budapest, Fortuna utca 4. (1) 393-5700 (1) 393-5705 info@stgeorgehotel.hu
»
– Boscolo Group Spa (3.23), BH5 S.p.A (96.77)
Kinga Engelbrecht – –
1073 Budapest, Erzsébet körút 9–11. (1) 886-6111 (1) 886-6192 reservation@ budapest.boscolo.com
»
– BH5 Spa (96.77), Boscolo Group Spa (3.23)
Kinga Engelbrecht – –
1073 Budapest, Osvát utca 2-8. (1) 424-4700 (1) 424-4799 reservation.residence@ newyork.boscolo.com
»
– Four Seasons Hotels Ltd (3.33), Four Seasons Hotels & Resorts (96.67)
Yves Giacometti – –
1051 Budapest, Széchenyi István tér 5–6. (1) 268-6000 (1) 268-5000 budapest.reservations@ fourseasons.com
127
–
»
18 2 BusinessPartnerWatch BBJ
WWW.BBJ.HU
YEAR ESTABLISHED YEAR LAST RENOVATED
NO. OF FULL-TIME EMPLOYEES ON MAY 1, 2012
Budapest Business Journal | Aug 10 – Sept 06
OWNERSHIP (%) HUNGARIAN NONHUNGARIAN
TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR
ADDRESS PHONE FAX EMAIL
2012 –
160
» »
Daniel Penet Zsanett Benkő –
1052 Budapest, Váci utca 34. (1) 799-7300 (1) 799-7301 info@buddhabarhotel.hu
»
– Masaveu Group (100)
Kate Davies – Anikó Udvaros
1051 Budapest, Október 6 utca 26. (1) 354-3050 (1) 269-0687 grand.hotel.budapest@ iberostar.com
»
– Mansion Danube Coöperatief U.A. (100)
Mathieu van Alphen – –
1052 Budapest, Apáczai Csere János utca 12–14. (1) 327-6333 (1) 327-6357 budapest@ihg.com
20
Dob utca 63. Kft (100) –
Tannous Marwan – –
1074 Budapest, Dob utca 63. (1) 882-3000 (1) 882-3099 welcome@queenscourt.hu
»
»
– Corinthia Investments Ltd. (88.72), Hafina Bau AG (11.28)
Gábor Nemes Orsolya Dobosi –
1036 Budapest, Árpád fejedelem útja 94. (1) 436-4100 (1) 436-4156 info@ ramadaplazabudapest.com
1982 2005
206
– Accor Group (100)
Philippe Godard Titanilla Selley Dana Janigova
1051 Budapest, Széchenyi István tér 2. (1) 235-1234 (1) 235-1361 h3229@sofitel.com
www.buddhabarhotel.hu
IBEROSTAR GRAND NR HOTEL BUDAPEST www.iberostar.com/ budapest-hotels
INTERCONTINENTAL NR BUDAPEST
www.budapest.intercontinental.com
» »
RAMADA PLAZA NR BUDAPEST
www.ramadaplazabudapest. com
»
»
»= would not disclose, NR = not ranked, NA = not applicable
402 18 12 266 71
» 1
135 135
GARAGE
GIFT SHOP
INTERNET IN ROOMS
CAR RENTAL
NO-SMOKING ROOMS
BABYSITTING
SPA SERVICE
WEDDING
EVENT MANAGEMENT
–
–
–
–
–
»
139 139
–
» »
–
–
–
–
–
» »
OTHER
LAUNDRY
Dry-cleaning service, valet parking service
2011 –
–
Car care, jewelry store
»
»
479 310 8 14
85 85
–
–
»
»
700 357 56 17
189 189
–
–
–
SOFITEL BUDAPEST NR CHAIN BRIDGE www.sofitel-budapest.com
50 3 1
»
QUEEN'S COURT HOTEL & NR RESIDENCE www.queenscourt.hu
116 102 27 3
BEAUTY SALON
–
FITNESS CENTER
BUDDHA-BAR HOTEL BUDAPEST KLOTILD PALACE
from 195, excluding taxes, excluding breakfast from 195, excluding taxes, excluding breakfast
CAFÉ / BAR
COMPANY WEBSITE
SINGLE RATE (EURO / NIGHT) DOUBLE RATE (EURO / NIGHT)
BUSINESS CORNER
NR
TOTAL NET REVENUE (HUF MLN) 2011
RESTAURANT
RANK
SERVICES NO. OF BEDS NO. OF ROOMS NO. OF SUITES NO. OF MEETING ROOMS
1981 2012
2007
»
1991
This list was compiled from responses to questionnaires received by July 25, 2012 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu
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Budapest Business Journal | Aug 10 – Sept 06
On the way up - competition for air passengers getting heavier As more airlines report bankruptcy in an ongoing market cleansing process, those left standing should be getting ever stronger. At the same time, competition for passengers is getting tougher. What services and benefits does an airline have to offer to keep on flying? BBJ ÁGNES VINKOVITS
With the airline industry permanently under extreme price pressure, offering good value for the lowest possible price is becoming ever more crucial. While the example of Hungary’s national airline Malév, which grounded flights on February 3, showed what short shrift the market gives to suppliers lacking the strategy and/or resources for development, extending networks and improving the quality of service while keeping prices low has become a must for air transporters. A poll made by the Budapest Business Journal among airlines with Hungarian flights seems to support the forecast of international experts that just three or four big airlines and a few discount airlines might finally rule the skies in 5-10 year’s time. The Lufthansa Group, (including Austrian Airlines, Brussels Airlines, and SWISS) has seen a little more than 10% more passengers in the first half-year compared to 2011. British Airways has also been enjoying strong and consistent growth in Hungary for the past 18 months, and particularly since June 2011, and has been boosting its Budapest capacity by upgrading aircraft operating its London Heathrow–Budapest service to a bigger Airbus 320 model.
At the same time, Hungary’s two main discount carriers, Ryanair of Ireland and Budapest-based Wizz Air, also reported a significant increase in the number of passengers – although as fares and the real prices of services are not always in balance, this increase does not necessarily mean a rise in profits. HEAVY COMPETITION All airlines polled by the BBJ have reported an increase in passenger numbers. Partly a result of Malév’s collapse, this in itself does not necessarily mean a significant increase in the actual number of air passengers, but there is still a clear positive trend that inbound passengers are getting younger, which may be an indicator for mid- and long-term tourism development. “Young people are more willing to experience new destinations and recommend these or return often,” Wizz Air pointed out. As such, the partly Hungarian-owned discount airline is proud of its service and considers itself as a kind of promotion for the country. “Offering low fares to Hungary is like starting a massive advert campaign: it raises much-needed interest in Hungary as a high-quality tourist destination,” the company told the BBJ. In another new trend, even regular airlines have reported that online usage is becoming more widespread. The popularity of online tools such as web- or WAPbased check-in is on the rise due to the timesavings they offer, a feature especially highly appreciated by business travelers. Meanwhile, acceptance of online developments might also increase, as those traveling with low-cost airlines have no choice but to get familiar with online interfaces or pay an extra fee for checking in at the airport. The lack of a classical airline ticket, which does not necessarily cause much inconvenience for passen-
gers, is not the only difference between the services of regular and low-cost airlines. Food and beverages are available on discount flights only for an extra charge, but what might be even more painful is the very low number of bags and the weight restrictions that passengers can take without paying extra. Not to mention that those traveling with Ryanair from Budapest’s Ferenc Liszt International Airport have to take a long walk on the airstrip to reach their aircraft, given that Ryanair saves money even on renting the boarding corridors from airport operator Budapest Airport. Even without examining this method from a passenger safety point of view, it is easy to imagine how much fun it is, for example, to take this walk on a rainy morning and then stand and wait beside the aircraft for 20 minutes before boarding. Thus, it might not be a big surprise that Wizz Air prides itself in its “offer of unbeatable service for everyday low prices”. Wizz Air finds their greatest edge over its com-
petition is its “hassle-free, friendly travel” and also that it does not use low fares as an excuse for a lack of services. The BBJ also asked Ryanair about what it thinks its advantage is over its competitors, but the company had failed to comment before the paper went to press. Nonetheless, since discount airlines have a growing market share, regular airlines are taking the competition very seriously. Lufthansa, for example, offers one-way tickets for fares starting from €49, which, if booked well in advance, is quite close to the price of low-cost airlines. With this, Lufthansa’s passengers get free food and beverages on board, can check in up to 23 kg of luggage, and also collect frequentflyer points. Still, Lufthansa’s worldwide network of flights might weigh even more when compared to other airlines. “I keep being surprised when guests do book such [discount] carriers without benchmarking against our fares on the same days,” Emil Delibashev, the British Airways commercial manager
for the Balkans and Hungary, Europe, and Africa told the BBJ, further supporting the idea that low-cost airlines impose a threat and require a reaction. “The truth is that those carriers are not that cheap anymore, while we are not that expensive anymore.” SHORT BREAK As regular airlines are obviously all very proud of the quality of their services, new developments to further increase the convenience of passengers might become a major focus of competition in the market in the near future. Lufthansa re-introduced FlyNet, its wireless broadband internet service on its longhaul flights in the fall of 2010. It is currently the only airline to provide internet access on North Atlantic flights, which is said to be an especially challenging proposition from a technical aspect. “We see that this is especially attractive for business travelers and further increases our position as the best choice for corporate travelers,” Lufthansa’s regional director Ofer Kisch said, adding that an increas-
ing number of leisure travelers also appreciate the ability to use their smartphones or tablets on board. Delta Airlines is also to launch internet access on more than 150 aircraft of its long-haul flights from 2013, and by the time its $3 billion investment has been completed in 2015, no less than 1,000 Delta flights will be offering Wi-Fi in the sky. British Airways will shortly introduce its biggest investment to date, valued at nearly £5.5 billion, spent on developments related to the company’s 12 brand new Airbus 380 aircraft and 24 Boeing 787 Dreamliners, though Delibashev is not yet in a position to reveal any further details. Discount airlines almost certainly cannot afford to launch new services that require such big investments. However, Wizz Air does not necessarily find this a problem since, as it pointed out, “Passengers even like the short break from emails and text messages when their flight is less than two hours.” ■
20 2 BusinessSpecialReport BBJ
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Budapest Business Journal | Aug 10 – Sept 06
Playing the trump card to boost domestic tourism The introduction of the Széchenyi Relaxation Card and the termination of some of the most popular paper-based holiday and meal vouchers were the most important changes the government made to the cafeteria scheme at the beginning of this year. And while the figures do seem convincing at first sight, there remain some lingering doubts as to whether the change will meet its primary purpose of boosting domestic tourism. BBJ ZSOLT BALLA
Do you consider Hungary a perfect destination for your summer holiday? If your answer is yes, I have news for you: most Hungarians, especially the well off, would be hesitant to agree with you. Hungary might be beautiful, but the Hungarian tourism industry has an ambiguous reputation, and Hungarians who can afford it more often than not opt for holidays at the relatively nearby seashores of Croatia, Slovenia or Italy, or the holiday hubs of Greece, Egypt or Spain, driven by a better price to value ratio than Hungary has to offer. Which is exactly why the government thought it had to intervene, and encourage holidaymakers to keep (or rather to spend) their money at home, boosting domestic tourism, and growing the Hungarian economy. Although the holiday voucher has been around for quite some time, according to government officials it had wandered off-track,
completely losing sight of its original aims, so more drastic changes were required: Enter the Széchenyi Relaxation Card. The Széchenyi Card (named after István Széchenyi, an 1800s politician known for his efforts to beef up the Hungarian economy, the card’s acronym, “SZÉP Kártya” translates to “NICE Card”) is a completely new item in the cafeteria scheme. It substitutes and merges various, paper-based vouchers into one, more centralized electronic payment system. Each plastic card has three subaccounts, dedicated to collect funds for accommodation, catering and recreation, respectively. There is a top limit assigned to each subaccount, but other than that, employees are free to determine how they want their cafeteria benefits to be distributed among the three. Payments can be made at a POS terminal, via online transfer, or by phone. “According to the first figures we see, the popularity of the SZÉP Kártya far exceeds our preliminary expectations,” says István Marosi, head of the tourism department at the National Economy Ministry (NGM). “By the end of June 2012, some 17,000 employers had joined the SZÉP Kártya program, meaning that more than 670,000 cards have already been issued. The money transferred to these accounts exceeds HUF 43 billion, while the number of service providers contracted to accept the card is well above 32,000, and growing. Since this year’s cafeteria benefits have to be spent by the end of next year, we are confident that this sum will appear in the Hungarian economy within a reasonable timeframe,” he explains. NOT SO NICE FOR THEM Although these numbers seem impressive, the mood around the new scheme is
not unequivocally cheerful. “Some 60% of family-owned accommodations and guesthouses miss out on the benefits provided by the SZÉP Kártya,” states a survey undertaken by Cafeteriatrend.hu in June 2012. The website’s experts asked 211 randomly chosen businesses about their methods of accepting the SZÉP Kártya. The conclusion: trends are improving and business owners are becoming more aware of legal requirements, but there is still a long way to go, as complexity remains a major challenge for most. The three sub-accounts require separate contracts from the service providers to be able to accept money transfers, which is multiplied by the three card-issuers (OTP Bank, K&H and MKB), often resulting in confusion. Some 3% of the survey’s respondents will only accept a card issued by one specific bank, and the rate of those who are contracted by all three issuers is 65%. “While these numbers indicate an improvement, from a user’s point of view, this rate is still far from full coverage,” highlights cafeteria expert László Fata. He says that the confusion grows even further when it comes to subaccounts. At the time of the survey, accommodation units
could charge all three sub-accounts for their services (a regulation that was changed in the middle of the summer holiday season, with effect from July 1), although this would have required three contracts with three issuers each, which proved too big a challenge for over 60% of vendors. A CLEAR-CUT SUCCESS? On the positive side, however, most providers point out that they feel the benefits of the lowered commission rate, as bank commissions were fixed at 1.5% in contrast with the 5-6% commission charged
when dealing with paper-based vouchers. Participants of the survey also confirmed that they were overall happy with the new scheme, despite initial difficulties. While the popularity of the SZÉP Kártya – partly due to the lack of competition after the termination of holiday vouchers – is undeniable, the first statistics raise questions as to whether it can fulfill its original goal: amplifying domestic tourism. According to Q1 figures of Hungary’s Central Statistics Office (KSH) the number of days Hungarians spent traveling within the country is down by some 12% y/y, although it’s obvious that the change in the
cafeteria scheme is just one of the many contributing factors in the area. Another survey organized by C1 Cafeteria, however, highlights that domestic tourism might not be a top priority of employees when they distribute funds amongst their SZÉP Card subaccounts. Asking 30,000 card owners revealed that some 56% of the funds are directed to the catering subaccount, and it is anticipated that at least a part of the 28% of the money transferred to the accommodation sub-accounts will also be spent in restaurants. According to Marosi it is too early to see the impact the new scheme will have on the tourism industry, especially because this year is still a transfer period, with both SZÉP Cards and paper-based vouchers present on the market, as the last set of holiday vouchers are valid until December 2012. The key metric of success for NGM is currently the pace of growth and popularity with employers. “Based on the above, we deem the SZÉP Kártya a clear-cut success,” Marosi concludes. ■
SECURITY CONCERNS Shortly after the delivery of the first batch of SZÉP Cards, IT professionals pointed out significant security gaps in the payment process. While the cards look like traditional credit or debit cards, there is no PIN protection involved, and the bill printed at any POS terminal contains all the information that is needed for an online transaction. “These receipts contain the entire card number (not just the final four digits as in the case of bank cards), the card’s expiry date, the issuer’s name and the actual balance,” reveals a study by Balabit IT Security. Leaving these receipts at the cashier can easily result in abuse of all this sensitive information. The risk is even higher as two copies of the receipts are printed, and one signed copy stays with the vendor. In response to these concerns, the three issuing banks published a joint release, saying that the security system is identical to the one used for healthcare cards, that have been on the market for eight years without major problems or abuses. According to the banks’ risk analysis, the number of unauthorized uses of SZÉP Cards will be around 100 per 1,000,000 transactions.
2 BusinessPartnerWatch 21
BBJ
WWW.BBJ.HU
Budapest Business Journal | Aug 10 – Sept 06
Airlines RANK
In alphabetical order
1
2
COMPANY WEBSITE
AER LINGUS www.aerlingus.com
AEROFLOT RUSSIAN INTERNATIONAL AIRLINES
AIRLINE ALLIANCE MEMBERSHIP
MAIN DESTINATIONS
YEAR ESTABLISHED
OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN
TOP LOCAL EXECUTIVE
ADDRESS PHONE FAX EMAIL
–
Dublin
1936
– (100)
Ibolya Akar, Júlianna Kovács
1023 Budapest, Komjádi Béla utca 1. (1) 999-1430 (1) 999-1466 aviation@tensi.hu
Sky Team
Moscow
1949
– (100)
Baranov Alexander
1050 Budapest, József Attila utca 18. (1) 318-5955 (1) 317-1734 budtosu@aeroflot.ru
Sky Team
Paris
1933
– (100)
Botond Melles
1088 Budapest, Rákóczi út 1–3. (1) 483-8800 (1) 373-7795 mail.cto.bud@airfrance.fr
–
Malta
1973
– (100)
Brigitta Balogh
1052 Budapest, Váci utca 19–21. (1) 235-6005 (1) 486-0114 airmalta@globair.hu
Sky Team
Roma
1946
– (100)
Carla Catuogno
1088 Budapest, Rákóczi út 1–3. (1) 327-7191 (1) 327-7190 kis.eva@alitalia.it
–
1184 Budapest, Liszt Ferenc Nemzetközi Repülőtér 2A terminál (1) 411-9940 – austrianteambrg@dh.de
www.aeroflot.ru
3
4
AIR FRANCE www.airfrance.hu
AIR MALTA GSA FOR HUNGARYGLOBAIR HUNGARY KFT www.airmalta.com
5
6
7
8
9
10
11
12
13
14
15
16
17
ALITALIA www.alitalia.com
AUSTRIAN AIRLINES www.austrian.com
BRITISH AIRWAYS www.ba.com
CZECH AIRLINES www.czechairlines.com
DELTA AIR LINES www.delta.com
EASYJET AIRLINE www.easyjet.com/hu
EGYPTAIR www.egyptair.com
EL AL ISRAEL AIRLINES www.elal.com
FINNAIR www.finnair.com
GERMANWINGS www.germanwings.com
KLM ROYAL DUTCH AIRLINES www.klm.hu
LOT POLISH AIRLINES www.lot.com
LUFTHANSA GERMAN AIRLINES www.lufthansa.com
NORWEGIAN AIR SHUTTLE 18 www.norwegian.no
19
20
21
22
23
RYANAIR www.ryanair.com/hu
SWISS INTERNATIONAL AIR LINES www.swiss.com
TAP AIR PORTUGAL www.flytap.com
TAROM ROMANIAN AIRLINES www.tarom.ro
WIZZ AIR HUNGARY KFT www.wizzair.com
Star Alliance
Vienna
1957
– (100)
OneWorld
London
1974
– (100)
–
1088 Budapest , Rákóczi út 1–3. (1) 777-4747 (1) 777-4745 –
Sky Team
Praga
1923
– (100)
Attila Tóth
1133 Budapest, Váci út 76. (1) 411-3888 (1) 411-3881 csa.hungary@aviareps.com
Sky Team
Amsterdam, Paris
1924
– (100)
Botond Melles
1088 Budapest, Rákóczi út 1–3. (1) 301-6680 (1) 301-6687 webticketing.hungary@klm.com
ELFAA
Basel, Berlin, Dortmund, Genf, London, Paris
»
»
Carolyn McCall
LU2 9LS Luton, Bedfordshire (+44) 870-6000-000 (+44) 158-443-355 –
Star Alliance
Cairo
1932
– (100)
Shereen Tahseen
1051 Budapest, Bajcsy-Zsilinszky út 12. (1) 266-4300 (1) 266-4600 egyptair@t-online.hu
–
Tel Aviv
1948
– (100)
János Váradi
1052 Budapest, Pesti Barnabás utca 4. (1) 266-2970 (1) 266-2973 sales.elal.bud@ediport.hu
OneWorld
Helsinki
1923
– (100)
Juhani Nuoramo
1052 Budapest, Pesti Barnabás utca 4. (1) 317-4026 (1) 317-4296 budapest@finnair.com
–
Hanover, Köln, Stuttgart
1997
– (100)
–
51147 Cologne, Terminalstrasse 10. – – presse@germanwings.com
Sky Team
Amsterdam
1919
– (100)
Botond Melles
1088 Budapest, Rákóczi út 1–3. (1) 373-7737 (1) 373-7795 webticketing.hungary@klm.com
Star Alliance
Warsaw
1938
– (100)
Borzon Elzbieta Wieslawa
1065 Budapest, Révay utca 10. (1) 474-8896 (1) 474-8897 budapest.office@lot.pl
Star Alliance
Berlin, Düsseldorf, Frankfurt, Hamburg, Milan, München
1953
– (100)
–
1184 Budapest, Liszt Ferenc Nemzetközi Repülőtér 2A terminál (1) 411-9900 (1) 266-1969 fly@lufthansa.hu
Bjorn Kjos
N-1330 Fornebu, Oslo, Oskenoyvein 10a. (+47) 6759-3000 (+47) 6750-3001 norwegian@norwegian.no
–
–
Oslo, Stockholm
1993
– (100)
–
Alicante, Barcelona, Billund, Birmingham, Bologna, Bristol, Brussels, Dusseldorf Weeze, Dublin, Eindhoven, Gothenburg, Hamburg, Karlsruhe, Krakow, London, Lubeck, Madrid, Malaga, Manchester, Memmingen, Milan, Oslo, Paphos, Paris, Pisa, Rome, Stockholm, Tampere, Thessaloniki, Venice, Warsaw
1985
– (100)
Michael O Leary
Dublin, Corporate Head Office, Dublin Airport (90) 982-014 – –
Star Alliance
Basel, Zurich, Geneva
2002
– (100)
–
1095 Budapest, Lechner Ödön fasor 6. (1) 411-9950 (1) 411-9961 feedback.hungary@swiss.com
Star Alliance
Lissabon, Praga
1945
– (100)
Péter Szolnok
1088 Budapest, Rákóczi út 1–3. (1) 235-7891 (1) 235-7875 tap@chapman-freeborn.hu
Sky Team
Bucharest
1954
– (100)
–
1051 Budapest, Bajcsy-Zsilinszky út 12. (1) 235-0810, (1) 235-0809 (1) 317-2307, (1) 296-8661 tarom.hu@t-online.hu
ELFAA
Antalya, Barcelona, Bari, Brussels, Burgas, Catania, Corfu, Dusseldorf, Eindhoven, Frankfurt, Forli / Bologna, Gothenburg, London, Madrid, Malmö, Milan, Naples, Palma de Mallorca, Pisa, Stockholm, Tirgu Mures, Turku, Weeze
»
– (100)
József Váradi
2220 Vecsés, Lőrinci út 59. (90) 181-181 (40) 106-166 marketing@wizzair.com
3 Socialite
BBJ
WHO'S NEWS
Name Frigyes Lasetzky Current company/position Budapest Bank Zrt/head of operations and quality control
Lasetzky leads the team of operations and quality control at Budapest Bank as of August 7. He started his career at Citibank Magyarország, and then joined Budapest Bank in 2001 where he has held various manager positions. In 2009, he was named head of the bank’s center in Békéscsaba, which deals with the majority of back-office tasks. He graduated from the Eötvös Loránd University in 2000 and speaks fluent English.
Do you know someone on the move? Send information to research@bbj.hu Before joining PBA, Galántai worked at insurance company MKB Általános és Életbiztosító. Earlier, he was with Allianz Biztosító. In 2002, he joined insurance broker Eurorisk, where he worked as sales director until 2009. He graduated from the Róbert Károly College. Name Zsolt Galántai Current company/position PBA/head of the vendor division
Name Roger Peters Current company/position Goodman/regional director, Northern and Eastern Europe
Peters will oversee the Northern and Eastern European region from the company’s office in Brussels. Before joining Goodman, Peters worked in Singapore on commercial, logistics and residential projects for European and Asian investors. Prior to that he was responsible for business development with private equity firms and worked in Czech Republic; Romania; Russia and Turkey. He was also CEO of a closed-end fund in Central Europe. He is a certified member of the Royal Institute of Chartered Surveyors (MRICS).
Olympic Games: so far (almost) everything went better than expected
BBJ BBJ
Most Hungarians asked about our medal chances at the XXX. Olympic Games would have mentioned water polo, handball, swimming
or canoeing as Hungary’s main strengths, despite the fact that the most medals have been won in fencing: 82 throughout the 116 years of the modern Games (Olympic legend Aladár Gerevich won medals in six consecutive Olympics in fencing – a feat unmatched since). So it was no surprise that our first gold medal was won by Áron Szilágyi in the men’s individual sabre on the second day. Hungary is traditionally strong at swimming events (winning 10 medals in 1952 and nine in 1992, of which Krisztina Egerszegi alone won three), although growing competition from Chinese swimmers and the everlasting appetite for winning of the phenomenal Michael
Phelps were very hard to beat. However, Dániel Gyurta won the men’s 200m breaststroke in a world record time only 0:15s ahead of host favorite Michael Jameson. And László Cseh won bronze behind Phelps and fellow U.S. swimmer Ryan Lochte. Krisztián Berki and Brit Louis Smith finished on men’s pommel horse with the same points, but the Hungarian better execution score saw him awarded gold. Krisztián Pars won gold relatively easily in men’s hammer throw, being the only one on the field to go over 80 meters. Canoeing competitions had started just hours before our deadline, but Hungarian athletes had already claimed two gold medals. First the Rudolf
SEPT 4
SEPT 11
Exclusive guided tour and dinner with wine tasting at KOGART House LOCATION KOGART House, 1062 Budapest, Andrássy út 112 REGISTRATION 5:30 – 6 PM TIME 6 – 9 PM FEE AmCham members in good standing: HUF 12 000 + VAT/ person; non-members: HUF 27 000 + VAT/person ORGANIZER American Chamber of Commerce in Hungary CONTACT Anita Árvai, anita.arvai@amcham.hu
AmCham Career School with Andrea Juhos, Managing Partner, Lee Hecht Harrison, Hungary LOCATION AmCham Conference Room, 1051 Budapest, Szent István tér 11, 6th floor TIME 6:30 – 8 PM FEE AmCham members in good standing: HUF 30,000 + VAT/ person; non-members: HUF 45,000 + VAT/person ORGANIZER American Chamber of Commerce in Hungary CONTACT László Metzing, laszlo.metzing@amcham.hu, +36 1 428-2082
Photo: Tibor Illyés/ MTI
With four full days still to go, Hungarian athletes had already won six gold, two silver and three bronze medals by our deadline on Wednesday, despite previous cautious forecasts of a total 10-12 medals for the whole Olympic Games.
Dombi/Roland Kökény duo won the men’s K2 1000m, followed half an hour later by the women’s K4 500m under the leadership of Katalin Kovács, who already had three gold and three silver medals from Athens and Beijing. Judo and wrestling also suddenly became popular amongst laymen, as Miklós Ungvári and Éva Csernoviczki won silver and bronze in the former, and Tamás Lőrincz and Péter Módos in the latter. The men’s water polo team – winner of the last three Olympic Games – started with two defeats against main rivals Serbia and Montenegro, although their form improved from game to game and the team finally made
it relatively easily through the preliminary round. The women’s team lost to Spain in a hard match and meets Australia to contest bronze in rematch of Beijing (won in 2008 by the Aussies). The men’s handball squad lost 33-34 to Beijing silver medalists Iceland in epic quarterfinal that required two periods of extra time to separate the teams. “The Hungarian goalie is my man of the match. He looks absolutely nuts. Kicked the crossbar at one point. Yes, the cross bar. Funny stuff,” wrote Judy Murray, the Mom of Olympic tennis champion Andy Murray about Nándor Fazekas, who defended a penalty just 14 seconds before the end of the match. ■
SEPT 15
SEPT 17
AmCham Family Sports Day and Annual Soccer Tournament
AmCham Communications School with Gergely Mikola, Director of Corporate and Regulatory Affairs, British American Tobacco LOCATION AmCham Conference Room, 1051 Budapest, Szent István tér 11. 6th floor TIME 6:30 – 8 PM FEE AmCham members in good standing: HUF 30,000 + VAT/ person; non-members: HUF 45,000 + VAT/person ORGANIZER American Chamber of Commerce in Hungary CONTACT László Metzing, laszlo.metzing@amcham.hu, +36 1 428-2082
LOCATION GLOBALL Football Park and Sporthotel,
2089 Telki, Szajkó u. 39 FEE Registration required ORGANIZER American Chamber of Commerce in Hungary CONTACT Ildikó Takács, ildiko.takacs-berka@amcham.hu
WWW.BBJ.HU
23
Budapest Business Journal | Aug 10 – Sept 06
Like A Virgin: Secrets They Won’t Tell You at Business School Sir Richard Branson, founder of the Virgin Group and one of the world’s most successful entrepreneurs, reveals how to be successful in business without having to take an MBA. Are you bored with your day job and want to set up your own company? Or perhaps you like your job but want to further your career and become a better leader?
These are the questions that Branson addresses as he distils the wisdom and experience that has made him one the most respected and recognized entrepreneurs in the world. Unlike Branson’s previous autobiographical book, Like a Virgin is more of a practical ‘how-to’ manual filled with inspiring ideas and business advice. From top tips on how to start and succeed in business to hard-hitting opinions about the global financial crisis and the importance of ‘people power’, this guide contains all the advice anyone needs to survive and thrive in professional life.
Like a Virgin is written in an accessible, personal tone and contains real-life case studies and snippets from Branson’s life that make it both easy-to-read and entertaining. Branson draws from his own experience of running Virgin, giving his business advice a unique credibility. For example, in the chapter Nice Guys Can Finish First, Branson responds to a question that he is frequently asked: Do you have to be nasty in business to get ahead? “Always remember that you love what you do and your role is to persuade others to love your business too and therefore want to work
with you. I like to think we are successful at Virgin because we engage with everyone in a positive, inclusive manner, rather than in an aggressive, combative or negative way.” His response is both positive and inspiring, which sums up the style and tone of Branson’s new book and makes it a must-have for budding entrepreneurs and ambitious careerists alike. Like a Virgin by Richard Branson Virgin Books ISBN 9780753519912 Available to order through www.hungaropress.hu