BBJ 2415

4 www.bbj.hu

Budapest Business Journal

SPECIAL REPORT:

| July 29 – September

19

2, 2016

Buddha-Bar Setting the bar high at the BuddhaPROMOTION

rt 4Special Repo

hotels in Budapest, As one of the top-end bearer in Palace is a standard Bar Hotel Budapest Klotild business. The hotel’s the Budapest luxury accommodationanswers questions about Fazekas, General Manager, Tamás his hotel. the tourism industry and

BBJ

Tourism industry

Hungarian Hotels and of the Association of the facing Dr. Ákos Niklai, president possibilities of Hungarian tourism. On the Lake Balaton.

Restaurants, explains biggest draws for visitors: page is one of the country’s

times Tourism sector enjoys sunny

to is key that it continues since any doubt, it like employers, in turn, by peak season figures, typically exist. We would even bigger amounts at accommodation measured Turkey and Egypt are and domestic tourists to make available further up by 5.4% in the both destinations for Hungarians, to employees in order to establishments went The upward trend in compared to the summer of those markets wouldn’t alter of money related spending,” he says. first five months of 2016, a fall months speed up their Inland tourism has so visitor numbers and habits in the first few same period last year. as locals’ travelling been doing well in particular the year. revenue are driving that such Filling up quickly Hungarian hotels of appetite for staying at “It is important to highlight travel6.1%. And experts trends naturally affect can be only assumed since growth, but officials say and the like grew by by the May figures effects decisions are influenced by These positive which are now reaching on wouldn’t be botheredslightly “In occupancy rates, the more modest. related the industry’s impact factors,” Bierneth said. were last seen before that ended up being last year’s several other events due levels that is still room for “All-in-all, May produced happy. The the short-term, the turn of to recession. But there on a regional the economy can be even high threats may be favorable both level which makes us influenced to the terror great deals improvement, terms of accommodation greater. data for May was further a Friday in us, as we can capitalize with basis and in 1 was But in the long run it’s categories. “Pre-season and post-season marketing. by the fact that May and if stability it was a Sunday, more for 2015, whereas this year everybody’s best interest activity should be developed LEVENTE HÖRÖMPÖLI-TÓTH less long weekend in and destinations would this purpose. At the moment existing therefore there was one of the comes about There are some one another based only 2016,” Gusztáv Bierneth capacities are fine. the compete against waters feeding in May hotels Tourism Agency told With natural thermal own strengths.” build quality boutique regions, famous Hungarian On the other on their of inland projects to that’s just inviting spas, great wine Lake Balaton, Budapest Business Journal.

Another key development national in Budapest in the pipeline, but in guest night numbers said in assessing music festivals, sprawling is that the use of SZÉP enough for now,” Niklai in the hand, fluctuations extent. The tourism is also witnessing new the situation. and beautiful old architecture has a are also natural to some at rates of voucher card Hungary be improved or changing exchange The vouchers, redeemable capital and other cities, Occupancy rates could are coming in weather be an additional records. businesses, allow employers manner lot to offer tourists, who certain currencies may in an even more spectacular in the tourism international workers additional not to mention a change growing numbers. a result of upcoming the to give their a lot of tourism factor, Aquatics taxed at a lower as situation of the country Foreign visitors bring events. The World compensation that is for tourists are also politicalcomes from. pay. Hungarian sports in Budapest in 2017, revenue, but domestic level than regular numbers, and this tourist 6 bln in this Championship draw large crowds from helping drive up the should guests shelled out HUF bring a bounty compared to the example,“Television broadcasting adds voucher power summer promises to way, an increase of 8.9% abroad. next challenge, Don’t underestimate immensely. Platform year. to the industry. The the rise in previous to this, to image building will take place with is to increase the have speculated that according to officials, for instance, Many attach further potential the length of the Some popular tourist president of diving, backdrop, at a as Niklai, attacks Ákos building Dr. business by expanding terrorism the Parliament to not least might have contributed of Hungarian Hotels and which will be of huge marketing value tourism season. official data destinations prompting the Association regular As he points out, domestic As shown by the latest Office, the the positive developments, Niklai said. But other at home and Restaurants.some 22% of accommodation by itself,” and the of the Central Statistical has solidified local travelers to stay such as the Formula 1 race havens like guests pay of payment. “The events share to growth Hungarian tourism industry path and is diverting foreigners to safer the bills using this method card is beyond Sziget Festival add their Bierneth believes that of the SZÉP its position on a growth off course. CEE. However, can only be popularity showing no signs of veering by foreign full impact of terror attacks spent The number of nights

travelling for Americans is high “The dollar is strong, so European days, turn, come to Budapest for 2-3 on the agenda. The British, in connected with several airports.” typically since the city is perfectly

Hotel Budapest Klotild Manager, Buddha-Bar Tamás Fazekas, General rise of sharing economy-based Palace. everybody sleeps the like Airbnb. staying too. “During Sziget, not accommodation services now compete is the secret to hotel rooms can steady growth What in tents,” Niklai noted. in this market? How foreigners Some 20,000 There seems to be places on Apart from domestic tourists, the year against as many as 8,000 luxury hotel competitive - Bar Hotel stand out? however, than in five-star and Do you the Buddha alone. Niklai says, have been more active and added value are countries stick Airbnb good for Budapest as revenues development in Budapest.

How Service, creativity it’s before as well. Certain extend as Poland from that He believes, see the field as expanding?

We are happy we could out from the crowd, such came in May are increasing as a result. business in key. we have recently is the luxury hotel our services, namely that government regulation where 35% more visitors in northeast of the though, overdue in order to establish a Lebanese restaurant Budapest in general? than a year earlier. The growth opened a new to see a the wine is long We experienced a significantterms of the hotel, where we are glad playing field. country, namely Nyíregyháza, both in posed by wellness center level in the last 1-2 years demand. region around Tokaj, the Regardless of the challenge rate, which is great the Debrecen have in economy, revenues in occupancy and average at Hajdúszoboszló and new an increased the sharing This year looks also very also gone up, not have positive. very are some of the industry particular been attracting hotel 5.1% the growing What abroad. interest at the nights. The jump of promising, even though number of travelers from developments of countries, only guest still a bit Are you From amongst the Western trend is slowing down.

May is regarded by some Buddha - Bar Hotel? and United States for Yet, experts warn that pushing changes in the future? the United Kingdom It year, expecting any particular. “The shy. we have just the busiest time of cannot happen overnight. before is of America excelled in prices What up mentioned travelling do you As for the first Arabic be added that the hike dollar is strong, so European opened a new and what kind of business on the agenda. The mustmonths of the year was a lot more the Conventions? recently for Americans is high which represents see most? Tourists? mark. to Budapest for five Where do you restaurant, of this type of F&B outlet in nearly hitting the 10% British, in turn, come Business travellers? highest level since the city substantial,wonderful result considering for growth? is a we are operating two-to-three days typically, “That summer, opportunities see This airports city. already several was change in the the the demand is well connected with The exchange that last year’s base figure We can see a slight two terraces, to facilitate year. The classic on Bierneth noted. used by budget airlines. summer months. seasonality during the tourism become an issue, high,” and Sept- during the rate of the pound might now weakened He believes that Hungarian peak periods (May-June has underpriced for its quality. however the Baalbek though, since sterling Oct) are still dominating, can offer great is markedlyHungarian Tourism Agency are things going at the the “low” seasons How [post-Brexit]. But we still said. Russia, on “When gap between “high” and the goal to – especially Restaurant? to renew our offers in value for money,” Niklai lot less people was established, we set and not a has become much smaller always try the other hand, has sent latest figures. significantly increase revenues, we see months - and We and build a returning since the during the summer to visit according to the peak the restaurant number of guest nights, to see a we’ve got the restored summer the hope we can keep extending can see clientele. We are very happy this is the area where Perhaps the newly its we near Balaton will that to do. We are confident that now in the restaurant since seasons. Opportunities flights to the airport most segment, great demand summer budget has and now during the are mainly in the convention come to the rescue here. that this year’s marketing and with the is congress hall opening, year, our cozy shisha terrace hopefully the planned been doubled for next increase of this months popular. development will contribute to the especially help of EU and domestic Defying Airbnb positive segment. we can achieve a radical performance funds, The hotel industry’s great in light of change in terms of revenues.” is even more remarkable

THE TOURISM INDUSTRY

BUSINESS JOURNAL BUDAPEST

VOL. 24. NUMBER 15

JULY 29, 2016 – SEPTEMBER 2, 2016

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

HUF 1,250 | €5 | $6 | £3.5

Destination Hungary

NEWS

Could the eurozone extend to Hungary?

The economy minister suggested that we could convert to the euro by the end of the decade. Even though Hungary may be close to meeting the criteria, no one seems to be in a rush to dump the forint. 3

FOCUS

Concentrating on the customer More companies in Hungary realize the benefits of creating a positive customer experience, but a survey shows that local firms do not always have the knowledge they need to turn customers into boosters. 16

NEWS

Consumers seen as key to buoyant GDP

Photo: Mátyás Pödőr

The tourism sector is flourishing, says Dr. Ákos Niklai, hotel association chief. He sees further growth as being a matter of extending the season. 18 SOCIALITE

BBJ_2415_news.indd 1

BUSINESS

Despite a slow start this year, Raiffeisen analysts say the country will continue to enjoy growth at an annual rate of more than 2% until 2019, thanks to rising real wages and healthy spending. 7

SPECIAL REPORT

Szeged makes for a sunny break

Investors return to real estate market

Vacation at home in a local luxury spa

Known for its pleasant climate and welcoming parks in the city center, this city in southeastern Hungary is also a haven for lovers of secessionist architecture. And it’s an easy trip from Budapest. 29

Commercial property in Hungary, and the rest of the CEE region, is having its busiest year since before the economic crisis. Properties are shifting quickly, and the activity is helping improve liquidity too. 10

Budapest’s fanciest hotels open their wellness facilities to locals, providing a lush experience right here in town. We review and rate the pools, saunas, massages and other treatments on offer. 20

2016. 07. 27. 20:10

www.bbj.hu

Budapest Business Journal | July 29 – September 2, 2016

4 www.bbj.hu

Budapest Business Journal

| July 29 – September

19

2, 2016

Buddha-Bar Setting the bar high at the BuddhaPROMOTION

SPECIAL REPORT:

4Special Report

hotels in Budapest, As one of the top-end bearer in Palace is a standard Bar Hotel Budapest Klotild business. The hotel’s the Budapest luxury accommodationanswers questions about Fazekas, General Manager, Tamás his hotel. the tourism industry and

BBJ

Tourism industry

Hungarian Hotels and of the Association of the facing Dr. Ákos Niklai, president possibilities of Hungarian tourism. On the Lake Balaton.

Restaurants, explains biggest draws for visitors: page is one of the country’s

Tourism sector enjoys sunny

times

to is key that it continues since any doubt, it like employers, in turn, by peak season figures, typically exist. We would even bigger amounts at accommodation measured Turkey and Egypt are and domestic tourists to make available further up by 5.4% in the both destinations for Hungarians, establishments went to employees in order to compared to the summer of those markets wouldn’t alter of money related spending,” he says. first five months of 2016, so a fall months speed up their Inland tourism has habits in the first few same period last year. as locals’ travelling been doing well in particular the year. that such Filling up quickly Hungarian hotels of appetite for staying at “It is important to highlight travelaffect 6.1%. And experts can be only assumed since and the like grew by positive trends naturally by the May figures effects decisions are influenced by These which are now reaching wouldn’t be bothered “In occupancy rates, the more modest. related factors,” Bierneth said. were last seen before that ended up being slightly last year’s several other for events due levels that But there is still room “All-in-all, May produced happy. The the short-term, the turn of us be favorable to recession. both on a regional high level which makes the terror threats may great deals improvement, terms of accommodation further influenced to in data for May was as we can capitalize with long run it’s basis and “Pre-season and post-season 1 was a Friday in us, marketing. But in the by the fact that May if stability categories. it was a Sunday, and more for 2015, whereas this year everybody’s best interest activity should be developed LEVENTE HÖRÖMPÖLI-TÓTH less long weekend in and destinations would this purpose. At the moment existing therefore there was one of the comes about There are some one another based only 2016,” Gusztáv Bierneth capacities are fine. the compete against waters feeding in May hotels Tourism Agency told With natural thermal own strengths.” build quality boutique regions, famous Hungarian On the other on their of inland projects to that’s just inviting spas, great wine Lake Balaton, Budapest Business Journal.

Another key development national in Budapest in the pipeline, but in guest night numbers said in assessing music festivals, sprawling is that the use of SZÉP enough for now,” Niklai in the hand, fluctuations extent. The tourism is also witnessing new the situation. and beautiful old architecture has a are also natural to some at rates of voucher card Hungary be improved capital and other cities, are coming in weather or changing exchangeadditional records. The vouchers, redeemable Occupancy rates could employers be an manner lot to offer tourists, who certain currencies may change in the tourism businesses, allow additional in an even more spectacular international workers not to mention a growing numbers. a result of upcoming the to give their a lot of tourism factor, Aquatics taxed at a lower as situation of the country Foreign visitors bring events. The World compensation that is for tourists are also politicalcomes from. pay. Hungarian sports in Budapest in 2017, revenue, but domestic level than regular numbers, and this tourist 6 bln in this Championship draw large crowds from helping drive up the should guests shelled out HUF bring a bounty compared to the example,“Television broadcasting adds voucher power summer promises to way, an increase of 8.9% abroad. next challenge, Don’t underestimate Platform year. to the industry. The image building immensely.place with the rise in previous is to increase the potential to this, to take have speculated that according to officials, Many attach further diving, for instance, will the length of the Some popular tourist as a backdrop, Niklai, president of business by expanding terrorism attacks at to not least Dr. Ákos the Parliament building might have contributed of Hungarian Hotels and which will be of huge marketing value tourism season. official data destinations prompting the Association regular As he points out, domestic As shown by the latest Office, the the positive developments, Niklai said. But other at home and Restaurants.some 22% of accommodation by itself,” 1 race and the of the Central Statistical has solidified local travelers to stay events such as the Formula havens like guests pay method of payment. “The Sziget Festival add their share to growth Hungarian tourism industry path and is diverting foreigners to safer that the bills using this beyond However, Bierneth believes only be popularity of the SZÉP card is its position on a growth can veering off course. CEE. showing no signs of impact of terror attacks spent by foreign full The number of nights

The upward trend in visitor numbers and revenue are driving growth, but officials say on the industry’s impact the economy can be even greater.

travelling for Americans is high “The dollar is strong, so European days, turn, come to Budapest for 2-3 on the agenda. The British, in connected with several airports.” typically since the city is perfectly

Hotel Budapest Klotild Manager, Buddha-Bar Tamás Fazekas, General rise of sharing economy-based Palace. like Airbnb. everybody sleeps the staying too. “During Sziget, not accommodation services now compete is the secret to hotel rooms can steady growth What in tents,” Niklai noted. in this market? How foreigners Some 20,000 places on There seems to be Apart from domestic tourists, the year against as many as 8,000 luxury hotel competitive - Bar Hotel stand out? however, than in five-star and alone. Niklai says, Do you the Buddha have been more active and added value are countries stick Airbnb good for Budapest as revenues development in Budapest.

How Service, creativity it’s before as well. Certain extend as Poland from that He believes, see the field as expanding?

We are happy we could out from the crowd, such came in May are increasing as a result. business in key. we have recently is the luxury hotel our services, namely that government regulation where 35% more visitors in northeast of the though, overdue in order to establish a Lebanese restaurant Budapest in general? than a year earlier. The growth opened a new to see a the wine is long We experienced a significantterms of the hotel, where we are glad playing field. country, namely Nyíregyháza, both in posed by wellness center level in the last 1-2 years demand. region around Tokaj, the Regardless of the challenge rate, which is great the Debrecen have in economy, revenues in occupancy and average at Hajdúszoboszló and new looks also very an increased the sharing also gone up, not very positive. This year are some of the particular been attracting hotel industry have 5.1% the growing What abroad. interest at the nights. The jump of promising, even though number of travelers from developments of countries, only guest still a bit Are you From amongst the Western trend is slowing down.

May is regarded by some Buddha - Bar Hotel? and United States for Yet, experts warn that pushing any changes in the future? the United Kingdom It particular. “The shy. time of year, expecting cannot happen overnight. before we have just of America excelled in What is the busiest travelling up prices do you As mentioned for the first Arabic be added that the hike dollar is strong, so European opened a new and what kind of business a lot more on the agenda. The must the Conventions? recently months of the year was for Americans is high which represents see most? Tourists? mark. to Budapest for five Where do you restaurant, of this type of F&B outlet in nearly hitting the 10% British, in turn, come Business travellers? highest level since the city substantial,wonderful result considering growth? are operating is a two-to-three days typically, see opportunities for city. This summer, we several airports “That was already change in the the the demand is well connected with The exchange that last year’s base figure We can see a slight two terraces, to facilitate year. The classic on Bierneth noted. used by budget airlines. summer months. seasonality during the tourism become an issue, high,” and Sept- during the rate of the pound might He believes that Hungarian peak periods (May-June has now weakened for its quality. however the Baalbek though, since sterling markedly underpriced Agency Oct) are still dominating, are things going at the still can offer great is the Hungarian Tourism “low” seasons How [post-Brexit]. But we said. Russia, on “When gap between “high” and the goal to – especially Restaurant? to renew our offers in value for money,” Niklai lot less people was established, we set and not a has become much smaller always try the other hand, has sent latest figures. significantly increase revenues, we see months - and We and build a returning since the during the summer to visit according to the peak the restaurant number of guest nights, to see a we’ve got the restored summer the hope we can keep extending can see clientele. We are very happy this is the area where Perhaps the newly its we near Balaton will that to do. We are confident that now in the restaurant since seasons. Opportunities flights to the airport most segment, great demand summer budget has and now during the are mainly in the convention come to the rescue here. that this year’s marketing and with the is congress hall opening, year, our cozy shisha terrace hopefully the planned been doubled for next increase of this months popular. development will contribute to the especially help of EU and domestic Defying Airbnb positive segment. we can achieve a radical great performance funds, in terms of revenues.”

The hotel industry’s in light of change is even more remarkable

THE TOURISM INDUSTRY

BUSINESS JOURNAL BUDAPEST

VOL. 24. NUMBER 15

JULY 29, 2016 – SEPTEMBER 2, 2016

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

HUF 1,250 | €5 | $6 | £3.5

Destination Hungary

NEWS

Could the eurozone extend to Hungary?

The economy minister suggested that we could convert to the euro by the end of the decade. Even though Hungary may be close to meeting the criteria, no one seems to be in a rush to dump the forint. 3

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FOCUS

Concentrating on the customer More companies in Hungary realize the benefits of creating a positive customer experience, but a survey shows that local firms do not always have the knowledge they need to turn customers into boosters. 16

NEWS

Consumers seen as key to buoyant GDP

Photo: Mátyás Pödőr

The tourism sector is flourishing, says Dr. Ákos Niklai, hotel association chief. He sees further growth as being a matter of extending the season. 18 SOCIALITE

BUSINESS

Despite a slow start this year, Raiffeisen analysts say the country will continue to enjoy growth at an annual rate of more than 2% until 2019, thanks to rising real wages and healthy spending. 7

SPECIAL REPORT

Szeged makes for a sunny break

Investors return to real estate market

Vacation at home in a local luxury spa

Known for its pleasant climate and welcoming parks in the city center, this city in southeastern Hungary is also a haven for lovers of secessionist architecture. And it’s an easy trip from Budapest. 29

Commercial property in Hungary, and the rest of the CEE region, is having its busiest year since before the economic crisis. Properties are shifting quickly, and the activity is helping improve liquidity too. 10

Budapest’s fanciest hotels open their wellness facilities to locals, providing a lush experience right here in town. We review and rate the pools, saunas, massages and other treatments on offer. 20

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EDITOR-IN-CHIEF: Tom Popper DEPUTY EDITOR: Aniko Fenyvesi ASSOCIATE EDITOR: Robin Marshall NEWS EDITOR: Christian Keszthelyi EDITORIAL STAFF:

Zsófia Czifra, Jessica Fejos, Fran Elsner, Levente Hörömpöli-Tóth, Nóra Krokovay, Maxim LeFleur, Gary J. Morrell, Claudia Patricolo, Diana Sefton, Rob Smyth, Zsuzsa Szabó LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

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Norbert Balázs

THE EDITOR SAYS

Strange times? Weʼve been here before The news may sound surprising, but it shouldn’t be. We have been here before.

In what has become an annual tradition, Hungarian Prime Minister Viktor Orbán went to his party’s summer retreat in Baile Tusnad, Romania, and gave a speech designed to shock. This time Orbán endorsed the American presidential campaign of Donald Trump, the former reality TV star who used to promote professional wrestling and beauty contests.

Once again, Orbán grabbed headlines with an unorthodox pronouncement, but there is nothing surprising about his claim of admiration for Trump.

Orbán built a fence along his country’s southern border to keep migrants out, and Trump wants to build a wall on his country’s southern border to keep migrants out.

Orbán says Hungary should not have to allow Muslims in Hungary, and Trump wants to prevent Muslims from entering the United States.

Orbán has said it is important to shut out migrants to “protect our wives and daughters”, and Trump has said that many illegal immigrants from Mexico are rapists.

Orbán has been one of Russian President Vladimir Putin’s biggest boosters in Europe, and Trump not only publicly admires Putin but also apparently receives help from the Russian government’s hackers.

Both men need enemies: As populists, they seek to build their own support by fomenting fear of outsiders. That means they both create risks of greater divisions that can cause harm to their countries and the world at large.

Both men seem to be part of a phenomenon similar to one that the world witnessed after the Great Depression: At the time, people were afraid of the uncertainty of economic upheaval. They were afraid they could not guarantee their children the same standard of living that they had enjoyed. In the 1930s, demagogues tapped into that fear to create destructive dictatorships.

Now, shortly after the Great Recession, people are again left uncertain by a rapidly changing economy, and their fears are exacerbated by mass migrations, which may have political causes but can also be traced to economic difficulties. Once again people are looking for demagogues who promise easy answers. And once again the demagogues’ answer is to blame other people and to find ways to isolate ourselves from them, or to drive them away.

Demagogues like Orbán and Trump say their extreme measures are needed in a world threatened by terrorists.

But their approach is the same as the terrorist leaders: Draw clear lines between “us” and “them”, and then hate and fear “them”. ISIS recruits people who feel cut off from the society they were raised in, and it gains its strength from leaders who would isolate Muslims.

It may sound trite, but it’s true: Facing the uncertainty of the future is much easier if we do it together, instead of divided.

We should know this by now. We have been here before, and last time it did not end well. Maybe we can act differently this time.

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Then and now

At left, bathers cavort on the first official free beach in Szentedre, just north of Budapest on the Danube.

The beach opened July 24. Above, near the same banks, rowers prepare for training in 1931.

The Budapest Business Journal’s print run is audited by MATESZ, 1034 Budapest, Bécsi út 122-124, a member of IFABC.

MTI/Attila Kovács

2016. 07. 27. 20:10

1 News BBJ

macroscope

NEWS

Real wages expected to keep rising

6

NEWS

Analyst sees strong GDP growth through 2018  7

Could we be paying with euros in 4 years?

Economy Minister Mihály Varga raised the possibility that we could switch to the common currency by the end of the decade, but it is not clear that Hungary needs to rush to join the eurozone.

Reports to watch for in the coming weeks

ZSÓFIA CZIFRA

Hungary’s economy minister said in a July 19 interview that the country would be ready to join the eurozone by the end of the decade. Mihály Varga’s statement came as something of a novelty given the government’s recent anti-Brussels rhetoric, and indeed a couple of days later, he was backpedaling, saying there is no rush to join the currency union.

But there is, indeed, a good chance for Hungary to adopt the common currency in the foreseeable future. The question is, does it really need it?

From time to time, Hungary’s accession to the eurozone comes up as an issue to discuss, although it has not been on the table for quite a while now. The first accession date was set back in 2003, when Hungary was not even a member of the European Union, and the then-governing Medgyessyadministration suggested a date of 2008. Hungary became an EU member state in 2004, but due to the worsening macroeconomic environment, the target date was delayed to 2009. The global crisis, which hit Hungary in 2008, paired with an all-time weak forint (a record that has since been broken) further postponed any possible accession. Viktor Orbán’s second government, which came into power in 2010, talked at one time of a possible target date of 201415, a prediction backed by a forecast released by the Fitch Ratings agency that said Hungary might able to meet all the criteria for adopting the common currency by 2015. Orbán, however, said at a press conference at the beginning of 2011 that introducing the euro in Hungary before 2020 was not a realistic target. The fact that the National Bank of Hungary started to replace its old banknotes in 2014 (which is expected to cost about HUF 15-20 billion until 2017) also shows that Hungary has not been very keen on joining the common currency area lately. But then came Varga’s statement in an interview published in the daily newspaper Magyar Hírlap in mid-July, saying that Hungary

BBJ_2415_news.indd 3

Economy Minister Mihály Varga, left, gives a lecture during a free university event in Baile Tusnad, Romania on July 21, the day he gave an interview seeking to cool expectations on Hungary’s entry into the eurozone. (Photo: MTI/Zoltán Máthé)

The fact that the National Bank of Hungary started to replace its old banknotes in 2014 also shows that Hungary has not been very keen on joining the common currency area lately. has by now met all the requirements for introduction. However, according to the economy minister, the first and foremost question is whether Hungary needs the single European currency or not.

Most criteria met As for the criteria, Hungary has never been as close as it now is to meeting them. There are five euro-convergence criteria stated in the Maastricht-treaty: the inflation rate should not be any higher than 1.5 percentage points of the average of the three best performing (lowest inflation) member states of the EU (Hungary sits at 0.7%); the ratio of the annual government deficit to the GDP must not exceed 3% (currently 2% in Hungary); the ratio of gross government debt to GDP must not exceed 60% (75.3% in Hungary); the nominal long-term interest rate must not be more than 2 percentage points higher than that in the three lowest inflation member states, a target that now sits at 4% and is 3.4% in Hungary. Finally, an applicant country should have joined the exchange-rate

mechanism (ERM II) under the European Monetary System for two consecutive years and should not have devalued its currency during that period.

But exchange rate stability is still an issue in Hungary, with the Hungarian forint showing a relatively high degree of volatility against the euro over the past two years.

In addition to this, the European Central Bank noted in its latest convergence report in June 2016 that, while Hungary’s general government deficit complied with the Maastricht criteria, its debt exceeded the reference value.

And while Hungary meets three out of the five objective criteria, there are subjective factors as well. The ECB emphasizes in the report that while Hungary is not experiencing macroeconomic imbalances, it would benefit from structural reforms aimed at promoting private sector-led growth, such as improving the governance of institutions, removing red tape and excessive tax burdens, and fostering private credit growth. The ECB also says that Hungarian law does not comply with all the requirements for central bank independence, the prohibition of monetary financing, the requirements for the single spelling of the euro and legal integration into the euro system.

Tight timing, if any If the government really wants to introduce the euro in Hungary, the country would need to join ERM2, which is the anteroom for euro adoption, as

We expect only a few important macro figures to stir up the last month of the summer: retail trade data for June will be published on August 3, followed by industrial output, also for June, on August 5.

The consumer price index for July will come out on August 9, and the state of the construction sector, which has been disappointing in recent reports, will be revealed on August 11. A flash estimate for the GDP in the second quarter of the year will be in the limelight on August 12, when we find out if the dip in the first quarter was an anomoly. Second quarter investment data will be released on the last day of August. soon as spring of 2017. For the time being, there are no signs the government is willing to do so. All in all, according to business and economic site portfolio.hu, the 2020 target date for Hungary to join the eurozone seems a bit too ambitious; a 2021-22 target date is more realistic, if there is the supporting political will, the site notes.

A report issued by Fitch Ratings Inc. in April about euro adoption in noneurozone countries in the Central and Eastern European region says that the biggest beneficiaries would be Croatia and Bulgaria, while Czech Republic and Poland would likely benefit least.

Hungary and Romania are more intermediate cases. The report explains that Hungary would lose the benefits of independent monetary policy. Given the country’s sizeable net external debt, the adoption of a reserve currency would strengthen external finances, and Hungary’s open economy would benefit from reduced transaction costs, the Fitch Ratings report concluded. It also notes, however, that “euro membership remains a remote prospect as it has disappeared from the political agenda in all six countries”.

Hungarians are divided in the issue: according to a Eurobarometer poll conducted in May, while 61% of Hungarians think member states in general benefit from joining the eurozone, 52% of them said that adopting the euro might cause higher prices immediately. In May, only one-fifth of Hungarians thought that Hungary was ready to join the common currency zone, and 30% believed that the country would never adopt the euro.

2016. 07. 27. 20:10

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04 News

Budapest Business Journal | July 29 – September 2, 2016

NEWS IN BRIEF Critics cry foul over sightseeing bus tender A municipal council tender called to run a “hop-on, hop-off” Budapest sightseeing bus service has been attacked by critics, who argue that the criteria may be tailored to favor just one company, Hungarian daily Magyar Nemzet reported on July 26. Three bidders are set to participate in the tender for exclusive rights to a market worth HUF 1.5 billion, hitherto shared by four companies. The three bidders in the strictly worded tender for a 20-year concession to run the service include a Hungarian-owned company, a foreignowned company, and a consortium involving Jordanian business interests, Magyar Nemzet reported, based on public records. To bid for the concession, companies’ annual net revenue from hop-on hop-off services must have been at least HUF 1.2 bln over the past three years, Hungarian news agency MTI reported. The winner of the concession must operate at least 25 buses and 39 bus stops in the capital, MTI added. Three of the four companies currently serving the market wrote a letter to Prime Minister Viktor Orbán asking him to keep the market competitive and to issue licenses for five-year terms so that a stable legal environment can be created behind the service, online napi.hu reported.

Cabinet split: Lázár leads strategy, Varga handles economy Under the new division of the Hungarian cabinet into two entities, Prime Minister’s Office chief János Lázár will head the strategic cabinet and National Economy Minister Mihály Varga will head the economic cabinet, according to decisions published in the latest issue of the official gazette Magyar Közlöny. Under the new cabinet split, János Lázár is in charge of strategy, while Mihály Varga oversees economic issues. The media began speculating this would be the likely division of power as soon as Lázár announced on July 7 that the Hungarian government was planning to divide into two distinct cabinets, one for strategic issues and one for economic issues.

According to a political analyst, the reason for the division of powers is to allow Prime Minister Viktor Orbán more freedom to concentrate on campaigning for the next election, expected in early 2018, and to handle other issues that he deems important. Under the decisions posted in the official gazette, the strategic cabinet will be responsible for shaping the government’s stand on the exit of the

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United Kingdom from the European Union, reducing bureaucracy and overseeing the upgrade of the country’s sole nuclear power plant in Paks, as well as other tasks.

Lázár had already been put in charge of the Paks upgrade and reducing bureaucracy in government institutions. Magyar Közlöny added that the economic cabinet would be responsible for matters such as decisions on state investments, incentives for economic growth and tax reductions.

Orbán bashes Europe’s political elite, endorses Trump Calling for fundamental change and identifying Europe’s political elite as the problem, Hungarian Prime Minister Viktor Orbán spoke about the immigration crisis, national security, Brexit, and problems of democracy in the Western world in a speech in Baile Tusnad, Romania, on July 23. The prime minister also said that it would be “best for Europe and Hungary” if Donald Trump wins the American presidency, adding that he agrees with Trump’s ideas in the field of fighting terrorism. Speaking at the same Romanian venue from which he shocked the world two years ago by calling for illiberal democracy, Orbán reportedly said that Trump is right in that he believes intelligence agencies need to be strengthened, and that the export of democracy needs to be stopped. “I am not Donald Trump’s campaigner,” Orbán said, according to the Associated Press. “I never thought that the idea would ever occur to me that he is the better of the open options for Europe and Hungary. I listened to [Trump] and I have to tell you that he made three proposals to stop terrorism.

And as a European, I myself could not have drawn up better what Europe needs.”

Orbán added that the same community of elites has effectively rotated positions of political leadership in the past so that “in Europe the leaders of the right and the left have always come from the same circles”. European elites are responsible for a “crisis of democracy” that can only be solved by returning power to nation states, Orbán continued. At the end of the speech, Orbán concluded that his government’s mission since 2010 to make Hungary a “point of certainty in a world of uncertainty” has proven relevant in the wake of the events of recent years, according to the report.

Poultry sales seen to rise 5% next year in Hungary Due to the drop in VAT on poultry meat in Hungary from the beginning of next

Austria to help guard Hungarian-Serbian border Austrian Chancellor Christian Kern shakes hands with Hungarian Prime Minister Viktor Orbán at their joint press conference in Budapest on July 26.

Kern said Austria would be sending 20 police officers to help guard Hungaryʼs border with Serbia, where a razor-wire fence was built about a year ago to stop the migrant flow. Orbán said the Hungarian-Austrian border can be the best protected if the two countries jointly patrol the Hungarian-Serbian border, and that Hungary is going to do everything it can to be a good neighbor to Austria. On July 21, a police spokesperson of the Austrian state of Burgenland said that all legal preparations had been made to build a fence on the Austrian border with Hungary, if needed, but apparently no action is being taken on that yet. (Photo: MTI/Szilárd Koszticsák)

year, consumption may increase by 5%, Attila Csorbai, the director of Hungary’s Poultry Products Council, told daily Magyar Hírlap on July 26. The VAT rate on poultry meat is being cut from 27% to 5%, which will not only raise consumption, according to Csorbai, but will also strengthen demand for more quality poultry meat. The director added that the VAT reduction on eggs could bring the biggest saving for producers.

Hungarian registered job seeker numbers down in June A total of 291,600 registered job seekers were looking for employment in Hungary at the end of June, a decrease of 20.5%, or 75,000 fewer people, from the same period a year ago, the National Employment Office (NFSZ) said on its website, according to a report on July 21

by Hungarian news agency MTI. Around 89,300 people, or 30.6% of the total, had been seeking employment for more than one year in June, which is 16.6% fewer than in the same period last year, MTI said. Of the registered job seekers, 34,200 people, or 11.7% of the total, were unemployed school leavers, according to MTI.

Hungarian vehicle fuel sales up 6.1% in H1 Sales of vehicle fuels in Hungary reached more than 1.59 billion liters in the first half of 2016, an increase of 6.1% compared to the same period last year, the Hungarian Petroleum Association (MASZ) said according to a report July 21 by Hungarian

news agency MTI. Gasoline sales were up by 4.7% for a total of 623 million liters, including 28 million liters of premium gasoline, MTI reported. Diesel sales increased by 7% for a total of 967 million liters, and premium sales reached 70 million liters, MTI said. The sales of fuel were boosted by “still favorable” prices, ranging from HUF 320-330 per liter, said MASZ head Otto Grad, according to MTI. The seven MASZ members draw around three-quarters of gasoline sales and twothirds of diesel sales in Hungary, and together own around 60% of the 2,000 gas stations in the country, MTI noted.

Labor shortage triggers better pay for student workers The labor shortage in Hungary is becoming a grave issue, so much so that students are frequently being sought for positions previously filled by full-time employees, national daily Népszabadság reported on July 21. In such cases, students can earn above the Hungarian minimum wage, the report noted. Due to the high demand for student workers, their wages have risen 15-20% higher than the minimum wage level in Hungary, the daily reported. Student positions chiefly require physical work, it added. Citing unnamed employers, the daily reported that the ratio of students in the Hungarian labor market is believed to have increased recently by approximately 20-30%.

Demand for student workers has been increasing so fast, it added, that agencies recruiting student workers can hardly find enough students to fill positions.

2016. 07. 27. 20:10

News 05

www.bbj.hu

Budapest Business Journal | July 29 – September 2, 2016

EC stands by equal pay proposal, Hungary opposes The European Commission confirmed its position on an earlier announced proposal whereby employers in the European Union would be required to pay workers from other EU member states the same remuneration and benefits as locals.

Hungary has argued that the proposal is in breach of an EU principle. The EC made the proposal last March. On July 20 it said the proposal does not constitute a breach of the subsidiarity principle, which ensures that decisions are taken as closely as possible to the citizen and that checks are made to verify that action at EU level is justified in light of the options available at national, regional or local level, Hungarian news agency MTI reported. The news agency recalled that after the proposal was announced a year ago, Hungary and ten other member states (Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Latvia, Lithuania, Poland, Romania and Slovakia) argued that it was in breach of the principle of subsidiarity. But the national parliaments of five other member states (France, Italy, Portugal, Spain and the United Kingdom) claimed it was compatible with the principle. “We have carefully analyzed all arguments put forward by national parliaments and discussed their concerns with them. All things considered, we have concluded that our proposal fully complies with the principle of subsidiarity and we will therefore maintain it,” said Marianne Thyssen, the Commissioner for Employment, Social Affairs, Skills and Labor Mobility, according to MTI. “Posting of workers is a cross-border issue by nature. The Juncker Commission remains firmly committed to the free movement of people on the basis of rules that are clear, fair for everybody and enforced on the ground,” she added.

Ministry distills national pálinka strategy Hungary’s Ministry of Agriculture is beginning preparations for establishing a national strategy for the production of pálinka, the traditional Hungarian fruit brandy, jointly with the national council in charge of the spirit, deputy state secretary Péter Gál was reported as saying on July 19. Gál said the government is aiming to increase international recognition of the national spirit, as well as raise its market competitiveness and export potential, Hungarian news agency MTI reported.

On April 29, the European Commission closed an infringement procedure against Hungary related to excise tax rules for pálinka, after it found that the new excise tax law, in force from the beginning of 2016, is in line with European Union rules.

In 2015, Hungary introduced a health tax of HUF 20–900 per liter on spirits, dependent on alcohol content. Pálinka and spirits containing at least seven kinds of medicinal herbs are exempt from the tax.

New Highway Code may force drivers to retake exam As work on Hungary’s new and simpler Highway Code is expected to end soon, drivers who already hold licenses could be required to pass a new exam, Hungarian online daily origo.hu reported on July 18.

Daily Magyar Nemzet reported that work on the new code has been ongoing for

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four years. According to Péter Kozma, a lawyer specializing in transport, there is a possibility that everybody will have to pass the exam, even those who are already driving with a license. The lawyer added that this could prove costly for Hungarian drivers, origo.hu reported.

City Park protestors vow to fight on

Hungarian gov’t attacks ‘migrants’ in new campaign The Hungarian government is launching another “information campaign” prior to the referendum on the EU’s refugee relocation quotas, in which the government makes a connection between what it terms the “migration crisis” and the growth of terrorism on the continent.

The government is sending messages to Hungarian citizens via television, radio, online and in print, as well as on billboards, with what they claim is the intention to inform the public ahead of the referendum scheduled for October 2. Citing the official website of the Hungarian government, online daily hvg. hu reports that the messages appearing on the billboards will be as follows: “Did you know that since the beginning of the migrant crisis, more than 300 people have died in Europe in terror attacks?”; “Did you know that since the beginning of the migrant crisis, harassment towards women has steeply risen in Europe?”; and “Did you know that the Paris attack was carried out by immigrants?”

State Secretary Bence Tuzson said the campaign is intended to inform the public about the possible consequences of immigration and acceptance of the EU’s quota system.

Lázár deems EC’s migration proposal ‘dangerous’ The new settlement program proposals

by European Commissioner Dimitris Avramopoulos for the EU’s migration policy is “nothing short of dangerous”, as it affects the sovereignty of EU members and the proposals constitute an invitation to millions more refugees, Hungary’s Cabinet Chief János Lázár said on July 14. Speaking at his regular weekly press conference, Lázár criticized Avramopoulos’ proposals, under which Hungary would agree to fully integrate the immigrants sent to Hungary on a mandatory basis, and the EU would provide aid worth €10,000 for the purpose, according to Lázár. The minister described the proposal as scandalous, and said, in his view, it goes beyond the mandatory settlement quotas, official government website kormany.hu reported. Lázár said the ill-advised proposal adds importance to the Hungarian government’s referendum on the settlement quotas set for October 2. The referendum asks voters: “Do you want the European Union to prescribe the settlement of non-Hungarian citizens into Hungary without the approval of the Hungarian Parliament?” Lázár said that a “no” vote will “reinforce the government in its efforts to prevent forced settlement”. Lázár added that he believes the Hungarian referendum would not only not curtail European integration, but could be “a factor of stabilization”, kormany.hu reported. He said his personal conviction regarding the EU is that the European Council should be reinforced over the European Commission, which continually “extends beyond its powers”.

Exhibits from the Museum of Transportation in the Városliget are removed in preparation for demolition of that building. (Photo: MTI/Péter Lakatos)

Insisting a promise to stop cutting down trees is insufficient, Greenpeace Hungary has called for an end to plans to build several museums in City Park.

LEVENTE HÖRÖMPÖLI–TÓTH

Work is going ahead on demolition in preparation for plans to turn a big section of the Városliget (City Park) into a museum quarter, despite continued opposition.

Protestors say the government’s announcement that no trees will be cut down is insufficient, are they are pushing for more discussions, but they seem to have few options for stopping the work, right now, as a recent effort by the Green party and others to hold a parliamentary hearing achieved nothing.

Attila Sághi, the mechanical director responsible for the work in the park, said on July 13 that no more healthy trees would be cut down; instead they would be dug up and transplanted, he said.

But Greenpeace Hungary dismissed the step as a pure PR tool meant to distract attention from what the debate is really all about.

“This proposal doesn’t change the fact that residents were not involved in the decision. Polls clearly show that more than 80% of people support renovation as such, but not at the expense of green surfaces,” Balázs Tömöri of Greenpeace Hungary told the Budapest Business Journal. He is urging the government to re-launch social dialogue on the issue since there is obvious support to establish a new museum quarter, but at a different location.

“Relocating trees works only for plants of a certain age and size. We are talking about very old and large ones here and it is proven fact that such plants die oneto-three years after relocation,” Tömöri said, referring to similar efforts at the

city zoo where, by contrast, a lot younger trees are concerned.

The government has no intention to back down. The extraordinary parliamentary session initiated by opposition parties in order to hold a debate on the feasibility of the plan failed to take place on July 20 due to the lack of a quorum, as Fidesz boycotted the session.

The government’s plans for the park involve taking down existing structures in the Városliget, the city’s largest park, and building several museums there as part of a new museum quarter.

The government has said that the amount of green space in the park will not be reduced, but critics say that the government counts grass on building rooftops as green space.

A movement to stop the work has broad support, but so far the biggest barrier to the scheme seems to be a lack of funding to complete all planned construction. For now, demolition is taking place, to make way for the building work.

“Greenpeace senses a system-inherent problem to which most recently the City Park project has drawn attention in particular. Urban green areas are in peril not only in Budapest, but also in the countryside. Currently nobody takes proper care of its protection and there is a lack of an elevated level of legal protection. Everybody is entitled to a healthy environment,” Tömöri said.

Meanwhile, Hungary has been making headlines with its extreme air pollution.

According to a Forbes Magazine article “an OECD report examining the health impact of ambient pollution found that Hungary’s per capita death rate is almost as bad as China’s. In 2013, 937.6 people perished in Hungary due to exposure to ambient particulate matter and ozone pollution per million inhabitants. In China, the number was slightly higher: 937.6.”

As to the fate of the City Park project, environmentalists had better prepare for a long fight. So-called green forums are scheduled for the fall, but Greenpeace is far from satisfied about this development. “We must re-start the entire discussion about the project from scratch,” Tömöri said.

2016. 07. 27. 20:10

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Budapest Business Journal | July 29 – September 2, 2016

HR expert: Real wages will keep going up Fierce competition for qualified workers and the low inflation rates are seen as two factors driving increases in the value of take-home pay in Hungary.

LEVENTE HÖRÖMPÖLI-TÓTH

The rise in real wages that has been going on for the past 41 months is made possible by low inflation, a minimum wage increase and lower income taxes, a local HR expert said. The tight labor market also drove the impressive wage figures released July 20, according to Tammy Nagy-Stellini, a lead analyst at Hays Recruitment in Hungary.

Average gross monthly wages in Hungary were up by 6% in May compared to the same month a year earlier, a first reading of data by the Central Statistical Office showed. Meanwhile, net real wages grew at a near-record pace of 7.8% in May, year-on-year.

“The decrease of personal income tax from 16% to 15% starting from January 2016 had an effect of about 1.5-1.6% in real wage growth. On the other hand, the minimum wage was increased from HUF 105,000 in 2015 to HUF 111,000 in 2016, and the amount of tax that can be deducted in the case of families with two children also slightly increased from HUF 10,000 per month to HUF 12,500. These

Tammy Nagy-Stellini of Hays Hungary.

Index of average net monthly wages in Hungary. Corresponding period of the previous year = 100. (Source: Central Statistical Office) small changes all affected real wage growth,” Nagy-Stellini said.

Since inflation has been pretty much around 0% for more than a year – and has even ventured into the territory of deflation – real wages are growing nicely.

And the future outlook is pretty rosy as a result.

“As long as inflation stays around 1-2%, and GDP growth can be kept above 2-3%, real wages will likely grow further,” Nagy-Stellini said. “The shortage of labor, especially in manufacturing, IT

and SSCs, will also help this increase, as the fastest way to attract people in these sectors is by increasing wages.”

While the trend is positive now, NagyStellini warned, that, in the long run, wages propelled to unprecedented heights can have a negative effect on foreign investment.

“Currently, Hungary is seen as a very good place to set up factories and SSCs, because of the relatively low labor costs together with the good qualifications,” the analyst explained. “If wages start

to increase, after a while, multinational companies may consider cheaper countries, but this depends on the priorities of the company.”

Nagy-Stellini said there is reason to hope that rising wages would be sufficient to compensate for the huge shortage of labor Hungary is facing already.

“In Western European countries, the unemployment rate is much higher, and if our real wages get closer to theirs, qualified but unemployed people will likely see more and more opportunity to come and work here,” she said. “Though, in the shorter- and medium-term, we can further compensate with improvements in education, e.g. dual education, and additional tax decreases.”

Population trend won’t help labor shortage As more young people “The last year that produced an exceptionally high number of leave to find work, births was 1976 and those women who were born then are now and fewer babies are about to leave childbearing age.” produced, Hungary faces a steady population Researchers are rather stunned by Many have left one other new development, though. The situation is made worse by the fact decline that threatens “Birth figures are awful and they seem that many have left the country to live to remain so, but the actual number of and work abroad, and those concerned are the economy.

As the shortage of skilled labor in Hungary becomes a growing concern, the population of people of working age in the country continues to shrink, and the trend shows no sign of abating.

A demographic researcher said that the long-term solution will involve working on several fronts, to encourage young people to stay, to attract new immigrants here, to increase the number of births and to prolong lives through better care.

The reduction in Hungary’s population has been continuing steadily since 1980.

Accordingly, during the first five months of this year. the total number of citizens dropped by nearly 17,000 in the country, according to the latest data, published on July 22 by the Central Statistical Office (KSH). One reason for hope, however, is that the pace of the so-called natural decrease did slow down when compared to the same period in 2015.

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births has been surprisingly stable. What is totally new is that marriages have been taking place in record numbers,” Balázs Kapitány, vice-president of the Demographic Research Institute told the Budapest Business Journal. Indeed, 22% more people chose to get married in 2016 than in the same period a year before.

As Kapitány explained, however, marriages used to be a lot more closely related to having children. Now it is still subject to research why a rise in weddings doesn’t translate into proportionately more births.

“The real problem is that the number of potential mothers is sinking dramatically.

The last year that produced an exceptionally high number of births was 1976 and those women who were born then are now about to leave childbearing age,” Kapitány said. Since the number of births doesn’t seem to have gone down in parallel, that means that more children are being born to fewer women.

typically in the 20-49 age bracket. “We don’t have exact information, though, about how many are gone. That has to do with a mess in European statistics,” the expert said.

Many babies of Hungarian parents living abroad are registered both in Hungary and their new country of residence, and even during plebiscites they might be counted double. On the other hand, parents might keep their Hungarian address, whilst they don’t actually live here anymore. This also results in double-registration.

The picture is further complicated if you consider that many return after a while. In many cases, parents plan to do so once it is time for their kids to go to school. “Migration is no one-way street,” Kapitány reminded.

Some suggest that more immigrants could make up for the 30,000 to 40,000 per year by which the country’s population is shrinking on average. But

immigration is basically non-existent here. “Being an immigrant presupposes staying in a country for at least a year.

The only significant wave of immigration came from neighboring countries whereby Hungarians living there moved to Hungary,” the vice-president said.

“There is no such thing as a magic formula against a dropping population,” he continued. “You simply can’t push up births by 40-50%.”

Fighting negative trends, which is key for long-term economic reasons too, rather requires a policy mix whereby births, deaths, immigration and emigration are tackled head-on and in parallel.

“The Czech role model could be copied. They were worse off than us, but addressed all four factors. The results were rather moderate in each case, but they did work and the effects added up,” Kapitány said.

Apparently, Hungary has no choice but to go down the same road if the country wants to stop what could be disastrous demographic trends.

But in order to do so, family-supporting measures and improving health care will need to be coupled with a rational immigration policy and creating an environment that keeps the number of people leaving for good under control, Kapitány said.

–Levente Hörömpöli-Tóth

2016. 07. 27. 20:10

News 07

www.bbj.hu

Budapest Business Journal | July 29 – September 2, 2016

Analysts see steady GDP growth New ride

firms would fill gap left

by Uber

Economists for Raiffeisen Bank in Hungary project that growth of more than 2% per annum will stick around until 2019, thanks to strong consumer spending that is helped along by higher wages.

ZSUZSANNA SZABÓ

Rising wages should help drive strong consumer spending, which will keep GDP growth in Hungary at more than 2% for the next couple of years, according to analysts for Raiffeisen Bank in Hungary.

Speaking at a July 19 press conference in Budapest that was billed as a look at the economic impact of Brexit, the analysts had a lot to say about local factors as they discussed the current state of Hungary’s economy and shared their forecast for the next few years.

Although Hungary faces severe challenges in the area of labor availability, this should not slow GDP growth in the near future, according to Zoltán Török, the senior research analyst at Raiffeisen Bank’s Hungarian unit. He said Hungary’s weak economic growth in the first quarter of the year seems to be a temporary set-back, caused by two factors: the reduced production of one car maker and limited EU funds flowing into the construction industry.

Török said he expected GDP growth to get back on track in the second quarter, and projected a 2.3% rise in GDP for this year, and growth of 2.7% in 2017, adding that this growth will be supported by the increase in private household spending.

He said that wage increases as well as income tax reductions should help to promote this growth, and that he expected 2.8% GDP growth in Hungary in 2018.

According to Török, growth will continue in the following year, but the pace will finally cool, and he expects GDP growth to drop below 2% in 2019.

Labor and wage concerns Despite these rosy predictions, Török noted challenges facing the Hungarian market, including the increasing scarcity of labor. He said there is no reassuring solution for this pressing problem. Most of the participants in the government’s workfare schemes cannot be transferred into the private sector, especially in the areas of skilled labor where workers are needed. Efforts to encourage Hungarians working abroad to return have had only limited success, and the economy cannot really count on migrant workers from outside of the European Union, he said.

Economically inactive persons could be the greatest labor resource for the economy, but their qualifications/skills, their residence outside of economic centers or their state of health make it

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Zoltán Török, senior research analyst at Raiffeisen Bank’s Hungarian unit.

Török noted challenges facing the Hungarian market, including the increasing scarcity of labor. He said there is no reassuring solution for this pressing problem. hard for them to join the labor market, Török noted.

The shortage of workers is putting upward pressure on wages, which can help provide equilibrium to the labor market, but according to Török, not all companies will benefit. He said that large, innovative companies can easily ensure higher wages for their employees, and the public sector can also benefit from paying more for the best workers.

For smaller businesses, however, the solution may not be so easy. Török said that increasing salary costs could make smaller firms less competitive. He added that a large proportion of SMEs in the Hungarian market fall into this category, and they will be hurt by the need to pay workers more.

Eurozone: In or out?

According to another Raiffeisen Bank analyst, Gergely Pállfy, the euro area is also primed for growth in the coming years. Last year the overall eurozone economy grew at an estimated 1.7%, mostly driven by the region’s household

spending. Moreover, the increasing number of people in employment and increasing real wages support the economic growth of the area, he said.

While investments and exports fueled some of the eurozone growth in the second half of last year, Pállfy said that household spending remained the main pillar of economic growth in the period.

Pállfy added that the low inflationary environment of the eurozone triggers a growing volume of loans both to households and to enterprises.

Due to the very low interest rate environment, a significant amount of capital is flowing into the peripheral countries of the European Union including Hungary. The Raiffeisen analysts forecast a low interest rate environment in the longer run, so this trend could continue.

In mid-July, Minister for National Economy Mihály Varga brought up the idea of Hungary joining the eurozone by 2020, and then shortly after played down the discussion, noting that the country would have to be ready for the move before it happened.

Török said no argument could be put forward against Hungary’s eurozone membership, and noted that there was more than 50% support for adopting the European currency among Hungarians.

Still, he said, some questions need to be answered, including whether Hungary still needs the flexibility of controlling its own currency, and whether the European Central Bank’s interest rate policy would be beneficial for the Hungarian economy.

Just a few days after U.S.-based ridesourcing company Uber pulled out of Budapest due to stricter regulations, new companies are eyeing the gap Uber left behind, according to reports. Estonian Taxify has announced a launch in August, while a Hungarian app may be launched even earlier.

A Hungarian company, previously a sub-contractor for Uber in Hungary, is planning to launch a mobile application for its services in the upcoming days, Hungarian daily Magyar Idők reported on July 26.

The name of the company has not yet been revealed, but it is believed to circumvent the strict rules on providing taxi services in Hungary by renting vehicles to passengers, according to reports. The company is expected to start operating its service with a small number of drivers and to demand higher fares than Uber charged, while still undercutting traditional Hungarian taxis, the paper reported.

However, the Hungarian company is not the only one planning to fill the hole Uber left behind, as Estonian competitor Taxify has announced the launch of a service in Hungary in August, Hungarian online daily napi.hu reported.

Taxify, which has Skype and many other tech giants as investors, promises to deliver the same technology and concept that Uber offered, while complying with all the relevant Hungarian regulations.

Its mobile applications are available for Android and iOS mobile phones.

Uber announced July 13 that it had decided to temporarily halt services in Hungary after months of demonstrations by taxi drivers led the Hungarian government to introduce tough new laws regulating drivers for hire. If the regulatory environment changes in the future, Uber said it would resume its services.

Uber said in a statement that the new law that took effect on July 24 makes it possible for “Uber drivers to lose their licenses or the license plates of their cars, despite the fact that they have all the necessary licenses and pay the required taxes”.

The company said it does not wish to expose drivers to these risks.

Uber had negotiated with the government in an effort to find legislation that would protect taxi drivers while letting the ride-sharing service operate, but the law finally passed seemed to make it impossible for Uber to work in Hungary.

Hungary’s National Development Ministry alleged in its own announcement on July 13 that Uber would rather leave the country than engage in lawful operations, enter fair market competition with taxi drivers and pay taxes appropriately, according to Hungarian news agency MTI.

2016. 07. 27. 20:10

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COMPANY NEWS Aldi Hungary wins Superbrands award The Hungarian subsidiary of Austria’s Aldi has won a Superbrands award, a quality recognition for retailers in Hungary, for the second time in its history, according to a press release issued on July 26. This year the award was handed out for the 12th time. Aldi was awarded the accolade in 2014, which Tibor Székács, the CEO of Aldi Magyarország Élelmiszer Bt., considered a “great honor”. The CEO added that for “Aldi Hungary it is especially important to offer high-quality products to its customers, and our commitment can be further strengthened by acquiring the Superbrands award”.

Wingholding corporate bonds take wing Hungarian property developer Wingholding sold €11.35 million in corporate bonds at auction on July 20, the company said on July 22, according to Hungarian news agency MTI. Wingholding accepted all offers at the auction at an average yield of 4.21%. The 11,350 bonds will be listed on the Budapest Stock Exchange. The total nominal value of the bond series will be €29.73 mln. The three-year bonds pay fixed annual interest of 4%.

MET makes first LNG deal Hungarian MET Group’s West European natural gas trading arm, MET International AG, has made its first liquefied natural gas (LNG) transaction, the company said on July 22, according to Hungarian news agency MTI. MET International took delivery of the gas from a tanker in Italy. MET International launched its LNG business on March 1.

MET Group’s gas portfolio stands at about 16 billion cubic meters. It is also active on the electricity and crude oil markets. The company has units in ten countries and trades on the gas markets of 25 countries.

The Switzerland-headquartered MET Group was founded in Hungary in 2007.

Hungarian car-sharing startup wins contest

Hungarian car-sharing startup BeeRides won the Ford Mobility Tour startup competition in Budapest on July 21, according to Hungarian news agency MTI. The competition featured startups from the Visegrád Four countries: Hungary,

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Slovakia, Czech Republic and Poland.

BeeRides is also scheduled to attend the 24-hour AppLink Developer Challenge in Berlin in September. BeeRides lets outgoing passengers park for free at the airport for at least two days and rent out their cars with full insurance to other pre-screened travelers, the app’s website explains. Members get free parking and a car wash and are paid if their vehicle is rented out, it adds.

MKB Bank shareholders vote to reduce share capital

Shareholders of MKB Bank decided on July 22 to reduce the lender’s share capital from HUF 225 billion to HUF 100 bln through the withdrawal of shares, according to Hungarian news agency MTI. The ownership structure of the bank will remain unchanged. MKB Bank said the capital reduction was “strictly of a technical nature” and would not affect the overall value of its net assets or its capital adequacy ratio. “MKB’s capital position remains stable and in compliance with regulations,” the lender said, adding that the capital reduction was approved earlier by the National Bank of Hungary (MNB). The shareholders also mandated the board to tap into up to HUF 50 bln in subordinated capital. The MNB recently closed the sale of MKB Bank to a consortium of two private equity funds, Blue Robin Investments and METIS Private Capital Fund, as well as Hungary’s Pannonia Pension Fund, for HUF 37 bln.

The equity funds each acquired 45% stakes in the lender, while the pension fund took 10% of the bank’s shares. A week before, MKB Bank’s employee stock ownership plan (ESOP) acquired 15% of the lender’s shares from Blue Robin Investments.

Erste Bank launches €550 mln credit program

Erste Bank Hungary is launching a threeyear €550 million credit program as part of an agreement with the government and the European Bank for Reconstruction and Development (EBRD), Richard Szabados, head of the bank’s corporate division, told Hungarian news agency MTI. Erste Bank Hungary committed to the program when the government and the EBRD each acquired 15% of its shares, said Szabados. About €250 mln of the credit will go to public sector workers to whom Erste is offering a number of preferential products. Another €200 mln will be used to finance small farming businesses and €50

Dunaferr to invest around €30 mln in Hungary Hungarian steelmaker ISD Dunaferr is planning to make further investments at its plant located in Dunaújváros at the beginning of the next year, ISD Dunaferr Corporate Manager Evgeny Tankhilevich announced July 23. The objective of the investment is to strengthen the production of higher value-added products at both its hot- and coldrolling mills, he said. Though the precise amount of the investment is not yet fixed, it would likely reach several billions of forints, according to Tankhilevich. The investments will specifically serve the development of manufacturing galvanized steel and other coated products, the corporate manager added. The previously suspended €20 million upgrade of Dunaferr hot-rolling plant is expected to be finished by the end of the year, and the €10 mln renovation of the blast furnace is set for completion by August 20, the company said. ISD Dunaferr is one of the largest industrial producers in Hungary. A significant part of its sales goes to foreign markets, especially Germany, Poland, Austria, Czech Republic, Slovakia and Italy. (MTI Photo:/Zoltán Máthé) mln will go to energy efficiency projects.

Erste Bank Hungary aims to secure one of the top three positions on Hungary’s corporate financing market by 2020, Szabados said. Erste Group hopes to see its local businesses among the top three players on corporate markets in all the countries in which it has a presence in the region, he added. To achieve this goal in Hungary, Erste needs to double its lending volume. Erste Bank Hungary has raised its net stock of corporate lending by 10% from HUF 300 billion at the end of 2015, even as the market stagnated, Szabados said.

By year’s end, the stock is set to rise by 25%. New outlays came to HUF 25 bln in the first half, up 50% on the corresponding period a year earlier.

Survey: More Japanese companies in Hungary An annual survey by the Japan External Trade Organization (JETRO) revealed a slight increase in the amount of Japaneseowned companies operating in Hungary, according to a press release issued on July 21. As of June, 151 Japanese-owned companies, including 46 manufacturers, were operating in Hungary, compared

to 147 in total (and 47 manufacturers) last year, the press release said. Exports

by Japanese companies in the country accounted for about 5.5% of total Hungarian exports in 2015, with a value of €5 billion, the press release noted. For the first time, Japanese companies are employing more than 30,000 people in the country, the survey also revealed, according to the press release.

S&P affirms Takarékbank ratings, suggests bank could do better Saying the bank compares poorly with its peers, S&P Global Ratings Services on July 21 said it affirmed its “BB/B” longand short-term foreign and local currency counterparty credit ratings on Magyar Takarékszövetkezeti Bank (Takarékbank) with a stable outlook, Hungarian news agency MTI reported. S&P said it took the ratings actions after noting positive developments in a review of economic and industry risks for the Hungarian banking sector. Among the developments cited were the conversion of FX retail lending stock into forints, the establishment of an asset management company to deal with bad commercial real estate loans

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Budapest Business Journal | July 29 – September 2, 2016

and a reduction in banks’ reliance on external financing. S&P said Takarékbank “compares poorly, in terms of profitability and earnings generation” with its peers in countries with similar economic and industry risk and rated “BB+” or lower. It also noted that Takarékbank had only recently enacted a radical transformation and that “it remains to be seen” if its business model and enterprise risk management will prove efficient.

S&P upgrades OTP Bank to ‘BB+’ Citing positive developments in Hungary’s overall banking system, S&P Global Ratings Services raised its long-term foreign and local currency counterparty credit ratings on Hungary’s OTP Bank and its subsidiary OTP Mortgage Bank to “BB+” from “BB”, Hungarian news agency MTI reported on July 21. At the same time, S&P affirmed its “B” short-term foreign and local currency counterparty credit ratings on both banks. The outlook for the long-term ratings of the bank were said to be stable.

S&P said it took the ratings actions after noting positive developments in a review of economic and industry risks for the Hungarian banking sector. “The upgrade of OTP Bank largely mirrors our revised view of the domestic banking system, while also taking into account the bank’s strengthened overall risk profile,” S&P said. OTP’s foreign units “represent less of a drag on the group’s risk position” as their operations are returning to profitability and their share of loans within the consolidation has decreased, the ratings agency said.

S&P upgrades MOL credit rating to ‘BB+’

Ratings agency Standard & Poor’s on July 19 raised its long-term corporate credit rating for Hungarian oil and gas company MOL from “BB” to “BB+”, Hungarian news agency MTI reported. The outlook for the rating is stable: “The upgrade primarily reflects our expectations that MOL’s credit metrics will be stronger than we anticipated due to the downstream division’s better performance,” S&P said.

S&P sees MOL’s funds from operations (FFO) to debt exceeding 45% on average, and expects the refining business to “generate resilient cash flows,” even assuming a 30% industry-wide decline in refining margins in 2016. S&P said MOL is “progressing well” with an efficiency improvement program, and sees growth projects in its petrochemicals business and investments in retail bringing in about $150 million of EBITDA per year.

However, S&P added that it could lower MOL’s rating “if its performance weakened markedly owing to an even sharper decline in downstream margins, or if the company’s debt increases substantially from the current level due to acquisitions or financial policy decisions”.

Wizz Air shares take off after plans to cut U.K. routes

Shares in Hungarian low-cost airline Wizz Air climbed by 3.9% after the company announced it is halving growth plans for flight routes to the U.K. market due to the Brexit vote to leave the European Union, according to a report on July 20 by online news source Proactive Investors. Net profit of the company climbed 54% year-

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on-year to €51 million in the first quarter of its business year that started on April 1, an earnings report released today shows, according to Hungarian news agency MTI. Earnings rose on higher turnover, an improved margin and a net financial gain, the report added. The drop in value of the British pound after the referendum has led to a weakness in fares priced in euros, Wizz Air said, noting that it will redeploy its capacity to non-U.K. routes, as Proactive Investors reported.

Tesco Hungary sheds 500 after internal restructuring

INNOVATION

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Putting money behind new ideas

Around 500 employees are leaving their positions at the Hungarian unit of Tesco following a restructuring of the business in the spring, daily Magyar Idők reported on July 20, according to Hungarian news agency MTI. The workers are leaving the company after Tesco offered them new positions with reduced pay and greater responsibilities, the paper reported, citing sources within the retailer. When Tesco initially announced the internal restructuring plan earlier in the year, it promised to offer affected employees acceptable pay and different jobs, the paper noted.

BAT eyes HUF 3 bln capacity investment

The Hungarian subsidiary of British American Tobacco (BAT) is planning to increase production capacity at its Hungarian plant in Pécs through an investment of HUF 3 billion, foreseen to create 200 new jobs, Minister of Foreign Affairs and Trade Péter Szijjártó announced on July 19. BAT is eliminating certain capacities in Western Europe and is planning to move investment to Hungary, due to an overhaul of the company’s European production strategy, Hungarian news agency MTI reported.

Szijjártó said the headcount at the Pécs plant is foreseen to reach 800 as a result.

Richard Widmann, CEO of BAT Central Europe, noted that the company has invested more than HUF 57 bln in the country since 1992, and its unit has become one of the biggest investors and employers here. Szijjártó added that the Hungarian Investment Promotion Agency (HIPA) is currently in negotiations with seven other British companies planning to make further investments in Hungary.

The minister noted that trade between the two countries was up by 15%, reaching €5 bln last year.

Budget Hungary wins Business Excellence award

Budget Hungary received the audience prize, chosen by partners and readers of online and print magazine Business Traveller Hungary via online voting, at the Business Excellence awards ceremony, according to a press release issued on July 19. Budget Hungary is the local subsidiary of car rental giant the Avis Budget Group, which is present in 128 countries. “It is real recognition if our clients are satisfied with our services as we are constantly making efforts to offer the best services possible,” said Budget Hungary CEO Hasan Kurt.

“Our services are customized, unique and client-oriented, and are also accompanied by flexibility. We are happy that travelers decided to encourage the quality of our work with this award.”

Viktor Gerő is a partner in the Central Investment Group.

Viktor Gerő is a partner in the Central Investment Group, which operates three different funds that specialize in supporting innovative startups.

Central Investment Group operates three funds: • Első Magyar Kockázati Tőkealapkezelő Zrt. (Conor Seed Capital Fund), a Jeremie Fund with €7.5 million; • Central Fund Kockázati Tőkealapkezelő Zrt. (Centech Fund), a Jeremie Fund with €17.4 million; • Central Tertius Restructuring Fund.

• Gerő answered some questions about how his funds can help support innovation in Hungary.

What are the benefits of funding SMEs – for the firms and for Hungary?

For the firm, the benefits are: Our investment team members have diverse backgrounds and were successful entrepreneurs. We focus on investment sectors where we have experience, and therefore we can support startup founders with our management experience and network on different fields.

For Hungary: We are mentoring talented entrepreneurs who are able to build up successful companies in Hungary.

How can an initiative like Telenor Hungary’s accelerator program impact the market? What are the possibilities for technological advancement through such a program?

The accelerator program - supported and subsidized by a dominant multinational telecom company - can provide a basic foundation of essential entrepreneurial knowledge and makes it possible to prove the concepts behind the startups’ products and services with top mentors.

What kinds of companies is your fund looking to support? Is there a particular profile of activity or age of a company that you look for?

We focus on hardware-software related investment: Internet transaction based solutions, E-commerce, M-Commerce, Shared economy, Mobile apps, Media, Internet of Things, Telecommunication.

We are looking for committed founders with unique products or service where the product market fit is already proven.

As for size of investment, your mission statement says you rarely seek to put in less than HUF 50 million. Why is that?

Based on the Jeremie rules we are able to invest between €150,000 and €300,000 in companies.

Do you believe there are a lot of good candidates for investment on the Hungarian market? Is this a particularly creative and innovative market?

We are in the middle of the startup evolution in Hungary, and as we see we have really talented entrepreneurs here with great ideas! I am sure that a few of them will appear on the global market soon or already they are there!

Can you name some outstanding examples of innovative firms that deserve investment?

In the last three years, we have made close to 30 investments in startups and some of them have already made a mark on the global market with their successes.

Just a few samples include: Be-novative.com, a gamified open innovation platform; Pressenger.com, a pre-call emotion, message sender application; Kwindoo.com, a special sailing regatta organizer.

More infornation: conorfund.com

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REAL ESTATE NEWS

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Budapest Business Journal | July 29 – September 2, 2016

Investors are back with a vengeance

Commercial property investment is set to surpass pre-crisis levels this year, both in Hungary and the region in general.

GARY J. MORRELL

Investors are finally returning to Hungary and overall CEE investment is on the rise as spending on commercial properties this year seems poised to regain heights not seen since before the 2008 financial crisis.

CBRE put the provisional H2 investment figures for Hungary at €734 million on July 19, with a total of €1.2 billion forecast for this year. This would represent the highest annual investment volume since 2007. “Investment into CEE countries for H1 2016 registered a substantial increase (59%) compared to the same period of last year, reaching almost €5 bln, ” said CBRE. “Expectations are that for the entire year, investment volumes will reach and exceed the record volumes of 2015, with all CEE countries expected to perform strongly.”

Another real estate company, JLL, had already issued its own report on July 13, showing that total investment transaction volume for Hungary for the first half year reached circa €910 mln. This has already exceeded the full volume for 2015, highlighting the increasing weight of capital targeting Hungary, according to JLL. Figures are also favorable for the wider CEE region, with CEE investment volume for the first half-year at €5.1 bln, representing a 69% increase on the previous year and the highest first half year since 2007. A total CEE investment volume of over €10 bln for the year is predicted, with Poland remaining the dominant investment market.

Around the region Investment in Czech Republic was close to that in Hungary, a similarly sized country, with €950 mln in assets traded according to JLL. There was a 26% reduction on the same period of last year, due in part to the massive Palladium shopping center transaction in 2015. Rockcastle has just acquired the Forum Liberec regional shopping center for €80 mln. Rockcastle’s investment focus had previously been on Poland, but its strategy is now to expand its retail property portfolio in Poland, Czech Republic and Hungary through the acquisition of existing assets and retail development sites. “A sizeable pipeline across all sectors complimented by a supportive financial environment suggests that H2 2016 will report a high level of activity resulting in a full year figure similar to 2015 at circa €2.5 bln-3 bln,” said Jakub Gajdos, an investment analyst at JLL Prague.

Romania – like Hungary – is regarded as an increasingly attractive investment destination after a difficult period, although the country has yet to attract the major institutional investors as

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The 12,700 sqm V17 office building on Váci út.

CEE property investment volume in millions of euros in H1, 2016. (Source: JLL) those already present in Romania are essentially looking for value-add opportunities. Romanian real estate investment volumes in the first half of 2016 are estimated at €340 mln, 80% higher than that registered in the same period of 2015. JLL estimates that €600 mln-800 mln of deals will be completed in 2016. The country is attracting significant investment to regional cities, with the largest transaction in the first half year the acquisition of the Sibiu Shopping City by South Africa’s NEPI for €100 mln. NEPI is the most active buyer in Romania, along with GTC. In Serbia and Montenegro, the largest ever single asset transactions were concluded with the acquisition of Delta City Belgrade and Delta City Podgorica for €127 mln and €75 mln respectively by the South African-based Hyprop Investments & Homestead Group Holdings. In Croatia, the Kaufmann Group has acquired City Center One East & West from Morgan Stanley RE Fund for €220 mln.

Figures from Poland, the leading market in the region, put the above results in perspective, with €2.07 bln of assets transacted in the first halfyear. The projected year-end figures are expected to exceed €4 bln, despite

“The increasing pool of equity targeting Budapest and the increasing appetite of banks to finance deals is dramatically increasing liquidity.” political concerns and fears of oversupply in the Warsaw office market. In many ways Poland is regarded as a core European market from an investment perspective, with institutional investors active in several major cities. “Whilst end of year volumes are expected to swing in favor of Warsaw, based on projects in exclusivity, the activity in the regional cities underlines the now established maturity, liquidity and performance of the top seven cities in Poland,” said JLL.

Investors snap up Hungarian retail properties According to JLL, investment deals in Hungary accounted for roughly €830 mln with retail assets representing the major share of this volume at 39%, followed by office with 34%, logistics with 26% and

hotels at 1%. The balance of €80 mln is composed of plots and vacant buildings.

Diófa Real Estate Fund was the most active buyer across the office and retail segment with the acquisition of the Inforpark G office building, Europark shopping center and Zala Park retail center. In the office market, the Magyar Posta Takarék Real Estate Investment Fund, managed by Diófa Fund Management, has completed the forward purchase of the 12,700 sqm V17 office building from Wing.

In the logistics sector, leading developer and operator CTP has also been active in building up its Hungarian portfolio with more than 200,000 sqm owned. As part of a CEE portfolio transaction, Blackstone acquired the Immofinanz logistics platform of more than 100,000 sqm located in Hungary.

The year has also seen the entry of new investors onto the Budapest market. As previously reported in this newspaper, Zeus Capital Management completed the purchase of the 21,000 sqm Váci Corner from HB Reavis in March for €55 mln, highlighting the growing attractiveness of the office market.

“The underlying factors supporting the trend remain at play and JLL foresees no change in the coming months,” said Benjamin PerezEllischewitz, head of capital markets at JLL. “Market fundamentals remain robust, with solid occupier demand, declining vacancy rates and recovering development activity. In parallel, the increasing pool of equity targeting Budapest and the increasing appetite of banks to finance deals is dramatically increasing liquidity. Moreover, the yield spread with Western European and other leading CEE markets guarantees the attraction of the market. Finally, as anticipated, Fitch has upgraded its sovereign debt rating for Hungary from junk level to investment grade (BBB-), and a similar move is anticipated from Moody’s later in the year.”

JLL put prime office yields at 7%, shopping centers at 6.75% and industrial at 8.5%. This translates into a 100-125 basis point differentiation between the Czech and Hungarian office markets and a 175 basis point differentiation between the respective retail markets. With regard to Czech Republic, JLL put prime office yields at 5.25%, industrial and logistics at 6.5% and prime shopping center yields at 5%. In Warsaw, a new prime office yield of 5.25% has been established.

The limited supply of assets is regarded as a potential problem for the Budapest office market, although the low pipeline combined with increasing competition among buyers is putting upward pressure on rents. Czech Republic and Poland have established office markets in secondary cities, where product is being traded, a process that has yet to occur in Hungary.

“Domestic buyers [local real estate funds, the Hungarian National Bank] and international investors will drive activity and liquidity should remain high in every asset class. We expect further portfolios as well as landmark buildings to be sold in H2, which will push the 2016 volumes towards the €2 bln level,” concluded JLL’s Perez-Ellischewitz.

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Budapest Business Journal | July 29 – September 2, 2016

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REAL ESTATE NEWS Office vacancies in Budapest rise to 9.7% in Q2 The rate of office space vacancy in the Budapest market increased by 1.1 percentage points to 9.7% in Q2 of this year, compared to the same period last year, the Budapest Property Consultants Coordination Forum (BIEF) said on July 22, according to Hungarian news agency MTI. Currently, there are 182,650 sqm of vacant office space, but only four buildings contain more than 10,000 sqm of vacant area, MTI said.

Take-up in Q2 was 92,100 sqm, approximately 22% less than in Q1 of 2016, and 13% less than in the same period a year ago, MTI said.

BIEF data covers about 90% of the Budapest office property market, and its members include CB Richard Ellis, Colliers International, Cushman and Wakefield, Eston International, Robertson Hungary and Jones Lang LaSalle, MTI reported.

Immofinanz signs leases for 40,000 sqm in Hungary

C&W: Budapest offers 1.9 million sqm of industrial space The chart above, produced with data from Cushman & Wakefield, indicates the available industrial real estate in square meters of various capitals in Central and Eastern Europe. The Hungarian capital has a total of 1.9 million square meters of industrial space on offer, and has followed the regional trend of growth in available space for lease in the CEE region, real estate firm Cushman & Wakefield said in a report on July 18. Budapest finished in third place, following Warsaw’s almost 3 million sqm and Prague’s approximately 2.3 million sqm of industrial space to let, while the region in general saw a 25% rise in terms of available industrial space in the 2013-2016 period. ‘Based on occupancy statistics, vacancy rates in certain places, such as Kraków, Bucharest, Poznań and Budapest, were down by more than 50% in the period,’ Ferdinand Hlobil of Cushman & Wakefield said.

Since the beginning of the year, real estate firm Immofinanz has signed lease agreements in Hungary for property of a total of approximately 40,000 square meters, according to a press release issued July 18.

Of this figure, lease extensions accounted for more than 25,500 sqm, while new or expanded contracts totaled Tenants of CPI buildings expressed 14,500 sqm, Immofinanz revealed. appreciation for the program, the press In terms of lease extensions, the release said. two flagship buildings Globe 13 and “The Human Innovation Program Haller Gardens have been particularly met with an unequivocally positive successful, because of the new leases and welcome among our colleagues. It’s extensions the latter now being almost very nice that the managing company cheers the tenants up. We are happy fully leased.

Viktor Nagy, Country Manager of with this initiative, trying to make Operations for Immofinanz in Hungary, use of it and supporting it to remain said: “40,000 sqm of new leases and for long,” said András Bacskai, project extensions in the last six months is manager of Interticket Ltd. an exceptionally high number for the Ferenc Becker, project manager of Parvis Ltd., said: “We have grasped Budapest office market”.

“With most of our buildings in excellent the opportunity several times to ease locations – both in the city center and our frustration and stress accumulated other areas demanded by customers – our during the day by playing ping-pong success pattern continues,” he added. a little bit. It’s a great help, too, in developing team spirit. The movingmarket and the ice-cream stand give CPI launches Human an opportunity for smaller purchases Innovation Program and bring a refreshing change dayReal estate firm CPI Hungary launched by-day.” its Human Innovation Program, a service package that was introduced to ease the Report sees CEE continuing day-to-day routine of those working in an office by bringing some more color to to outperform their working life, according to a July 18 A consortium of real estate firms issued a report on July 26 that promotes the press release.

CPI considers creating a human- advantages of the CEE region, including centered working environment to be part the impressive economic growth and of its high-level service offer for tenants, stability of Hungary and its neigbors. the company said, so this program The region is one of the least hazardous seeks to improve the ordinary days of parts of the world in terms of business employees working in offices, the press operational risk, and several countries release added. including Hungary are among the world’s

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25 safest, the press release continued, citing information from the Institute for Economics and Peace.

Last year also saw growth in the volume of commercial real estate transactions in Hungary, with €790 million in transactions comprising 9% of the total €9 billion regional volume in CEE in 2015, the press release noted.

“Central and Eastern Europe is viewed as Europe’s ‘darling’ by an increasing number of institutional

investors based in Europe, including the U.K., and more recently from North America, South Africa and the Far East.

It is an attractive and safe region with sustained improvements in the business environment,” said Paweł Dębowski, Chairman of the European Real Estate Group at Dentons, in the press release.

The press release highlighted details from a full analysis of the region as an investment location and is available on Skanska’s website.

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Budapest Business Journal | July 29 – September 2, 2016

A software that works with translators

Used by professional translators in a range of sectors, Hungarianmade memoQ incorporates humans into the process of machine translation.

INNOVATION

“Windows and other computer systems have only recently started processing certain languages, and features of a language can change.”

DIANA SEFTON

Despite the progress made by applications like Google translate, software for translation is far from perfect, and still requires a lot of human input.

Facilitating human input is one of the strengths of memoQ, a computerassisted translation software that was born right here in Hungary, created

by Kilgray Translation Technologies Ltd. The company’s software is used by individual translators, agencies and companies in many industries including law, life sciences and even gaming. memoQ offers users the ability to filter and highlight text, look up references, comment and review translations through a dynamic interface. Some of the key elements that Kilgray stresses are compatibility and collaboration.

“Most companies and translators use multiple tools which have to comply with different systems and requirements” says Kilgray co-founder and CEO, István Lengyel. Kilgray’s success comes from having taken this into account. Users of the software note that project flows can also be much more creative with collaborative translation and online projects.

For instance, espell, a leading translation agency located in Budapest, has been using memoQ in an integrated translation environment since 2011 and as its primary translation platform for the last three years. Gábor Faragó, a translation technology architect at espell, notes: “Turnaround times are more and more pressing each year, so the innovative translation flows enabled by memoQ are vital.”

The three founders of Kilgray originally met while working at a company engaged in the development of spell check software and online dictionaries in 2004.

Lengyel had actually studied economics, but began translating as a side job and realized he had a passion for it, which eventually led him to ELTE University’s doctorate program in translating.

The industry focus at the time was on developing machine translation and, as Lengyel states, “we wanted to support human translation”. Kilgray’s initial idea was an experiment in collaborative translation. Now the company is number two in its market, and has three main locations in Europe; Gyula and Budapest in Hungary, and Bonn in Germany with 78 employees between these locations.

A human side One of the company’s strengths is its incredibly responsive user-base. Kilgray emphasizes that it is a human-faced

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Now businesses and translators are seeking single cloud-based systems not only as a way to collaborate but also as a solution to rising administrative costs.

As the size of translation jobs decrease, bookkeeping becomes a challenge and higher administrative costs are incurred.

Kilgray co-founder and CEO István Lengyel.

“espell needed an integrated approach as the number of languages in any localization project is anywhere between six and 40, with up to a dozen files for each language.” company and it has created a community with its user-base. The company leverages its close relationship with users to gather input and test assumptions.

“We take user feedback into consideration to get a sense of where the industry is moving,” explains Lengyel.

Kilgray organizes a yearly event called “The User Strikes Back”, where the company fields questions, comments and feedback from users in a conference setting. Lengyel says that user input has been elemental in Kilgray’s continued improvement of the memoQ software and the company learns from its users’ trials and challenges. And this approach appears to resonate with users. “Software developers often seem to live in a different world to their endusers, and try to sell them the way they imagine things should be done rather than listening to their users and putting themselves in their users’ shoes. memoQ developers live in our world and listen to the users,” says Faragó. Kilgray can often respond to user problems and inquiries in less than 24 hours.

The software is not the only thing that has continued to develop; the company has also experienced many different stages of growth over the past decade. “There was a lot of momentum at the start” explains Lengyel. Now the company is at a stage of renewing, of

Language changes too “bringing innovation beyond what is there” as Lengyel puts it.

The company has transformed from a garage-style operation and through swift changes, has grown to become more professional. The ownership’s approach to this is to question the status quo and to question its own assumptions. “The rules of the game have changed, we take it seriously and it requires discipline.”

Above all, Lengyel notes that the business’ success depends on its people learning and improving constantly.

Adapting to new roles The Kilgray team is in the process of adapting to new roles, always maintaining a focus on initiatives.

Lengyel recognizes that an important part of the company’s development process was for the original founders to take a step back and to implement some changes in the management team. This comes as a result of the company being created entirely through self-funding. A start-up that receives outside or investor funding may also receive some external management expertise along with it.

Kilgray did not have this type of support in its early years and is currently in the process of bringing expertise on-board in order to beef up its management and internal organization, which is a key step for any company transitioning from a “start-up” to a larger and more established operation.

Another aspect of Kilgray’s evolution is that the basic technology used in the industry has changed and continues to transform. Now translation can be done using a web browser and a lot of work is done online and in the cloud. “The cloud enables collaboration and business transactions with multiple people,” says Lengyel. Traditionally, each company would have had its own separate server.

In addition to evolving technologies, language itself presents some constantly changing variables. One challenge that the profession faces is the internationalization of text and software required for localization projects. When a company opens a branch in a new country or completes an acquisition abroad, they will usually need to “localize” standard materials such as internal operational policies, legal documents and instructional training manuals to the local language. This also requires software that can recognize the structure of different languages such as Arabic, which is written from right to left, or Thai, which does not apply English-style punctuation.

“Windows and other computer systems have only recently started processing certain languages, and features of a language can change,” notes Lengyel. “It is often surprising how many challenges there can be with some languages, as writing systems and other features vary.” Programs like memoQ are tasked with keeping up with these changes and preparing solutions to fit users’ needs. “espell needed an integrated approach as the number of languages in any localization project is anywhere between six and 40, with up to a dozen files for each language,” says Faragó “Serverbased distribution and control of all these resources, workflow assignment of the files to the translators, flexible licensing and a fast learning curve to onboard new translators quickly are the key advantages to using memoQ.” While Kilgray aims to offer tools compliant with other software, it recognizes that it cannot reach 100%, and it may not want to. “You need to find a balance. If you want 100% compatibility between systems, you would need to standardize everything, but then there is no room for innovation,” says Lengyel.

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3Focus BBJ

Customer experience

Winning over the masses

Hungarian firms seem to appreciate that a positive customer experience can turn clients into brand ambassadors, but they may not be doing enough to achieve this goal.

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Holistic approach improves customer experience

Experts say improving a client’s emotional attachment to a product or service means paying attention to every point of contact with the customer, and understanding his or her expectations.

LEVENTE HÖRÖMPÖLI-TÓTH

The “customer experience” concept has been around in the corporate world since 2003, but Hungarian firms began to seriously take up efforts to promote the idea – capturing the power of emotional bonding with a product – only around six years ago.

Now that the internet makes it much easier to gather information, and quickly compare value, service content and prices, customers are a lot better informed. In this environment, the power of customer experience has become essential. As a result, what used to be an odd item in the marketing toolkit of mobile providers is now a lot more widespread than you think. Statistics show that 75% of Hungarian-based firms consider customer experience to be among their top three priorities, and that they are seeking to become a leader in this regard is also clear.

And yet, local shoppers hardly perceive these efforts. Surveys show that customers in Hungary do not feel any improvement in customer experience.

Obviously, Hungarian companies need to do more when it comes to improving matters.

“This proves perfectly that customer experience is not up to strategy, but whether it can be implemented on the front line,” Csaba Szabó, CEO of Develor Hungary points out to the Budapest Business Journal. He maintains that by focusing on efficient implementation, his consulting company can teach firms how to provide improvements in customer experience that customers will actually notice.

“Our method assesses the so-called Customer Experience-Readiness of an entity, whereby it is established to what extent the organization is prepared to embrace it. During the audit, it is examined how far internal conditions comply or how deeply customer experience has been integrated in the organizational culture. In short, how committed the entity is to follow through its ambitious goal to make its clients feel better, that they are heard and valued,” Szabó explains.

Audits tend to reveal that tools, processes and systems – such as sales plans, store operation models, or related templates that are meant to increase the level of service – might already exist, but they are not interconnected, and at the time when they were made they weren’t designed to improve customer experience.

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Csaba Szabó, CEO of Develor Hungary.

“First and foremost, the customer journey itself needs to be identified... It is essential to find those contact points during this journey that make the biggest emotional impact.”

Develor seeks to make sure that existing elements are applied to make full use of them and adds new ones to set up an integral structure. “Companies had better prepare for a long-term development though, since even with targeted prioritizing you can’t do it all at once and it takes time for new practices to turn into daily routine,” Szabó says.

Strategy by itself won’t do “Implementation must take place in every channel and in every transaction and every point of contact. In order to achieve that, first and foremost the customer journey itself needs to be identified,” says Zsolt Pozvai, Global CEO of the Develor international network. “It is essential to find those contact points during this journey that make the biggest emotional impact on you. When you are served in a bank for example, the speed with which you are called to proceed to the counter, or whether you are welcomed at the entrance, might have a bigger impact on you than when you are called by your name.”

To achieve this, Pozvai says, it is important to define critical behaviors – the ones that have the largest effect

Zsolt Pozvai, Global CEO of the Develor international network. during a transaction on the customers and his or her commitment to a brand.

Making staff familiar with expected behavior requires classroom and on-thejob training, where immediate feedback is given and corrections made, Pozvai says.

Meanwhile, direct superiors are in key roles and have homework to do too for long-term benefits via controlling or coaching front line employees. “In their efforts, they are assisted by a so-called operational leadership model, which clearly defines the expected tasks and routines to follow in order to ensure the critical behaviors happen in the frontline. This is what we co-create with clients to ensure measurable changes,” Pozvai notes.

To what extent implementation is successful is measured by different tools.

The most popular customer experience index, the Net Promoter Score (NPS), is said to be applied by 30-40% of Hungarian companies. To apply the NPS, clients are asked at the end of a transaction how likely it would be that they recommend the service to others.

Other methods include the customer satisfaction index and the customer effort score.

Time to adjust your expectations Scoring highly on these indexes involves giving a good overall impression at different points of customer contact, and it depends a lot on expectations.

“We apply all sorts of sources of information in order to get a clear idea of those expectations, since most of the time such preconception is formed subconsciously. Customer complaints are analyzed for that matter, or biological sensors are attached to test subjects in order to measure how stress level

fluctuates in the course of transactions,” Pozvai adds. Experience shows that even small gestures such as a handshake between the loan officer and the customer can make a difference. “In that particular example, a handshake can make you feel that you’re treated as a partner,” Szabó points out. “The problem is that customer expectations are sector-neutral, so if certain sectors are improving, others need to keep up, otherwise they would start lagging behind even if their service remains at the same level.”

Top multinational companies excelling at providing customer experience are successful because expectations are kept high, but everything is designed in a way that helps meet expectations.

Apple, for one, provides product and retail experience by hiring people whose strength is not knowing every technical detail of a device, but to be able to explain how it offers an experience for you. Similarly, Emirates airline applies methods that strike emotional chords with passengers. “When you fly Emirates business or first class, you are always called by your name. Now that doesn’t cost money, but a bit of an extra effort that, again, provides evidence that very minor things can translate into emotional effects,” Pozvai says.

Another small thing that can really matter is reducing waiting time – or at least making waiting time less annoying.

“We trained staff to address waiting people to sell stuff in connection with the business, for instance helping with downloading a mobile banking app and setting up a mobile banking account. You see, this is what magic is, since you don’t have to cut waiting time at all costs, but simply find out how to turn it into a profit while making your client feel more comfortable,” Pozvai explains.

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Budapest Business Journal | July 29 – September 2, 2016

Clients are UPC’s future

As a cable firm offering full-scale business care, while also providing TV, internet, telephone and mobile services, UPC Hungary lives or dies by positive customer experience. Anita Carra, chief marketing and content officer of UPC Hungary, talks about how her company succeeds in building a positive image among its clients.

Q

Q

Q

What goes into the impression that makes for a positive customer experience?

A: I believe that deep understanding of our customers’ needs, including knowing their expectations and using continuous tracking, can lead us to perform successfully in the field of customer satisfaction. Stable and reliable products and excellent customer service is essential. The extra mile starts when UPC focuses on providing added value to customers through its innovative solutions to enhance their lives. As

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“We put enormous effort into improving the interaction between the customers and UPC: We listen to our customers, measure the experience we provide and define actions for improvement.”

Another frequent area of interaction with customers is the website. Can an easy-tonavigate website that solves customers’ problems be as useful as in-person service? How does UPC’s website help?

A: Online importance is increasing, so Liberty Global (UPC’s mother company) focuses on digital excellence to meet future requirements. In this channel we have a smaller window of time to impress customers, so our intention is to provide a user friendly website where customers can find the relevant information easily and quickly and they can instantly order services in a reliable way. That’s why user experience testing is a very important tool for us to further develop our website and webshop. In the meantime, social media – where an immediate response is expected and appreciated – is getting more accepted and more frequently used by our customers to interact with UPC.

BBJ STAFF

Achieving a positive customer experience must be very important for a serviceheavy firm like UPC. What is UPC’s strategy for dealing with this key challenge? What kind of resources are dedicated to it?

A: Under UPC’s strategy, delivering a positive and memorable customer experience has been a high priority for us, both in terms of using our products and services and in terms of each and every customer interaction, for years. We took the highest level company commitment to deliver positive experience to our customers.

We embraced an NPS (Net Promoter Score) as part of the corporate culture, using it as a mechanism not simply to identify and assist unhappy customers, but as an opportunity to identify root causes of loyalty and satisfaction. We also set up a dedicated department within the marketing team to manage UPC’s customer experience activities.

This department is responsible for the entire process of customer experience from strategy and measurement, and to drive actions based on insights. This fully comprehensive approach ensures that customer experience is integrated into our business as a routine activity. But, of course, one small team can’t make a miracle, so it’s crucial that each and every department of the company is motivated to be customer-centric.

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Q

What about your services for businesses? What are the typical services or packages that businesses seek from you?

A: Our core business product in B2B is definitely the internet service: Fiber Power packages for smaller companies and leased line services for the bigger ones. But the bottom line here is the fact that UPC can provide full service to enterprises, whether they need only a small package or a more complex, tailormade solution

Anita Carra, chief marketing and content officer of UPC Hungary. examples, I would mention our cutting edge products and services such as Wi-Free, Horizon Go or the recently introduced Replay TV, or the interactive MyUPC surface we created in order to make the most wanted customer service functions easily accessible to our clients.

Q

What are the opportunities for UPC to improve customer experience? How and when do customers interact with UPC, and what can be done to ensure the interactions are positive?

A: We put enormous effort into improving the interaction between the customers and UPC: We listen to our customers, measure the experience we provide and define actions for improvement. Along with this, key customer journeys were defined and are under continuous improvement based on customer feedback, but customers are also involved in service testing before new service launches to ensure proper service quality. Customers interact with UPC through many different channels, from stores and call centers to online surfaces. Our aim is to deliver a consistent experience through each

channel. Wowing customers with future proof innovation is key as well for the perfect experience.

Q

One frequent interaction with customers happens on the phone, when people call UPC for troubleshooting help with their internet, cable connections or mobile and cable phone service – or to ask billing questions or request new services. What can be done to ensure that the customer experience in these kinds of interactions is positive?

A: Instant availability of customer care agents and first-time resolution are very important to the customers. But beside efficiency, our aim is to improve the empathy in the frontline. That’s why UPC has launched a diagnosis tool for agents to identify realistically, during the contact, if the customer is a detractor/unhappy and try to change his emotions by providing help, solution or compensation. We have implemented this in our incentive scheme to motivate agents to provide a positive experience. Clients should feel that we are there to serve their needs.

Q

How can you improve customer satisfaction with services for businesses?

A: Tailor-made solutions and continuous availability are key factors in B2B customer care. Dedicated account managers serve our business customers, both in professional and “simple” customer care issues. We also provide a dedicated call center for smaller businesses, where our colleagues can assist them on a professional level.

Q

How can dependable service from UPC ensure that its business clients have an easier time giving a positive customer experience to their customers?

A: We know that the service level of our clients greatly depends on our services: if the internet or phone service shuts down, it can cause a negative experience for their customers. It is our responsibility to provide a reliable service. In most cases UPC becomes visible only when something goes wrong. We strive to solve technical problems as soon as possible, but on the other hand it’s also our mission to go beyond expectations and to attract our customers with those innovations that can make their life easier.

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Customer experience survey finds gaps i While research shows companies, and even customers, appreciate the need for a better experience, few organizations in Hungary seem to be acting on this knowledge.

Net Promoter Scores by types of firm Criticize

Mobile phone Filling station Bank Retail supermarket Insurance Cable TV Electric power company Landline telephone Gas utility

“Companies put the topic in their strategy but execution fails as is demonstrated by the dropping sector-specific Net Promoter Score results ... Telecoms, insurers, banks and car sales firms are the frontrunners, while most retailers and utility firms lag behind.”

Change in NPS scores, 2013/2015

According to Pozvai, the drop in NPS indicated by the survey is caused by low or missing implementation of policies Not acting on their knowledge and strategic initiatives to improve Despite the growing awareness of the need the customer experience, and it is a to implant the customer experience into widespread problem. corporate processes, systems and actions, “This is not Hungary-specific in practice companies seem to be lagging phenomenon. This is typical in most Central European countries, but leading behind in the field.

“Companies put the topic in their strategy companies have started to wake up but execution fails as is demonstrated by recently,” Pozvai said. the dropping sector-specific Net Promoter “Telecoms, insurers, banks and car Score (NPS) results,” Zsolt Pozvai, global sales firms are the frontrunners, while CEO at DEVELOR International, told the most retailers and utility firms lag behind.

Budapest Business Journal.

Almost all players in the relevant industries NPS is a measurement tool used to aim to be the leaders of CX, but only a few gauge the loyalty of a firm’s customer have the detailed and clear strategy and – relationships. NPS serves as an alternative more importantly – implementation plan to traditional customer satisfaction in place,” Pozvai said. “Of course, far more research, and its adherents say the claim they took serious steps in this field, measure can be correlated with revenue but it’s nothing more than executing some research and related marketing initiatives. growth.

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Promote

Online webshop

CHRISTIAN KESZTHELYI

Making sure that customers have positive thoughts about your product or services was once considered an interesting new concept. These days, a good customer experience is seen as essential.

More companies, and clients, now understand that a customer’s experience, created over the course of the transaction between a vendor and a customer, is essential to encouraging return sales, and possibly turning clients into unpaid marketers.

The latest annual National Customer Experience Survey by Develor, an international consulting firm based in Hungary with a specialization in customer experience (CX), shows big changes in consciousness of the issue between 2013, when the first survey was made, and last year. The results indicate that more businesses – and more customers – are aware of the importance of customer experience.

One indication of this awareness is the finding that 42% of the Hungarian population said they have already paid more for a higher customer experience.

Apparently customers were happy to spend extra for a better experience: Some 31% of the respondents of the representative survey said they were willing to pay 10% more for higher levels of customer experience, while 17% said they would be willing to pay even 30% more.

The survey also shows that, with each passing year, the number of those who agree that customer experience is becoming one of the most important factors when deciding to choose a business or service provider has gradually been increasing.

Neutral

Retail supermarket Insurance Mobile phone Landline telephone Online webshop Bank Electric power company Cable TV Gas utility In customer experience improvement, the do-it-yourself solutions and old paradigms won’t put you on the top of the list, but regularly create a barrier to real changes.”

Who is doing well?

Based on the results of NPS surveys, Develor found that customers rated the majority of service providers negatively, the survey reveals. This is to be expected, as one-quarter of the adult Hungarian population is critical towards all the service providers active in the country.

Develor said that one of the leading reasons why customer experience is deteriorating is that there has been no significant improvement in terms of either personal or call center customer service accessibility and quality in Hungary.

One half of the Hungarian population apparently believes that customer service

is slow, and service staff preparedness and problem solving skills were deemed mediocre.

Some 92% of the survey’s respondents said they tend to have negative experiences when using services, but only 34% of them are willing to make a complaint to the service provider. This means that the feedback the companies need in order to identify areas for improvement is at a relatively low level, as two-thirds of complaints are never revealed, even though the majority of customers have encountered issues that left a negative stain in their loyalty to the brand.

“Companies have to work not only on how to respond and solve customers’ issues but also how to collect the complaints more efficiently, because our survey also proved that there is no bigger impact on customer satisfaction and loyalty than solving a problem quickly and well,” Pozvai said.

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Budapest Business Journal | July 29 – September 2, 2016

ps in implementation How much more would you pay for a better customer experience?

TEND TO AGREE

COMPLETELY AGREE

I have paid more than the average price to receive a better customer experience.

I would be willing to pay 10% above the market price to receive a better customer experience.

I would be willing to pay 20% above the market price to receive a better customer experience.

I would be willing to pay 30% above the market price to receive a better customer experience.

Three most important qualities for a service company Find a solution quickly Treated as a valued customer My needs are met Contactable at convenient times, locations Staff is friendly and courteous Staff is well informed Have opportunity to speak to ’live’ staff Honest, transperant service I feel like they listen to me Other

Top 3 reasons for emphasizing CX TEND TO AGREE

COMPLETELY AGREE

Providing an outstanding customer experience is one of our TOP3 goals

Our goal is to become a CX leader in our industry

Clients leave us when they are exposed to negative CX

Source for all these charts: Develor’s latest survey

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PROMOTION

Telcos need a new approach to attract Millennials At Telenor, human-centered thinking has replaced productcentered thinking. With the aid of ‘service design’, the company can finally establish new services that users can really become excited about. That approach is a must to attract customers from the Generation-Y, who make serious demands.

Telenor’s newly designed shops offer Many consider service design a better service. buzzword with an unclear meaning, and it’s often mixed up with “customer Telenor’ s service design team has not centricity”. But while the latter is only been cooperating closely with the a reactive approach that analyses technical division: After a short period of customer satisfaction of existing time, the team was contacted by more products, service design supports and more in-house teams, driven by evolving new products and is naturally the desire to develop their own internal customer friendly. processes and services with the new design approach.

Telenor is among the first companies in Hungary to start the shift from product- Before adopting service design oriented thinking to a service- and methodology, Telenor’s operation used customer-centric approach. Today’s to be more contained in individual customers are more demanding – silos. The service design team tries to especially the Generation-Y customers harmonize and optimize the diverse born between 1980 and 1999 – who individual channels when designing want to use services customized internal and external processes. for their specific needs, and want to manage everything online, because IT NOT ONLY AIDS CREATION, BUT they are already banking and shopping ALSO ADJUSTMENT electronically, and many are even dating online.

The process and experience that WHAT IS SERVICE DESIGN?

Minimal effort required on my part

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Because digital services are becoming more and more widespread, telcos and service providers need to undergo a sort of evolution and have to fully understand and satisfy customer needs.

That requires a good deal of empathy from companies that have previously focused on products instead.

customers go through from the moment they enter our renewed shop until they leave it has been developed using service design methodology.

As an indispensable part of this work, members of the service design team visited shops that already use some sort of digital function in customer management, regardless of what they sell. They observed the behavior of incoming customers live, to collect input for designing Telenor’s own customer management process.

Service design involves careful study of customers. It observes their lives and daily activities, in order to understand their needs. Using the knowledge Telenor is thinking in the long term, and information obtained through as the company has realized that its research, it is possible to design responsibility does not end with selling service concepts, or service journeys – a service. The company is monitoring a map of what happens to a customer changing customer needs, and adjusts, who comes to us to seek service. All improves and develops existing components of the service journey services accordingly. This is where are prototyped, to check whether the service design has a great potential and information understood and integrated this is where it can help the company into the process is correct or needs to become its customers’ preferred digital be adjusted. partner.

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4Special Report BBJ

Tourism industry

Tourism sector enjoys sunny times

The upward trend in visitor numbers and revenue are driving growth, but officials say the industry’s impact on the economy can be even greater.

LEVENTE HÖRÖMPÖLI-TÓTH

With natural thermal waters feeding inviting spas, great wine regions, famous music festivals, sprawling Lake Balaton, and beautiful old architecture in the capital and other cities, Hungary has a lot to offer tourists, who are coming in growing numbers.

Foreign visitors bring a lot of tourism revenue, but domestic tourists are also helping drive up the numbers, and this summer promises to bring a bounty to the industry. The next challenge, according to officials, is to increase the business by expanding the length of the tourism season.

As shown by the latest official data of the Central Statistical Office, the Hungarian tourism industry has solidified its position on a growth path and is showing no signs of veering off course.

The number of nights spent by foreign

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and domestic tourists at accommodation establishments went up by 5.4% in the first five months of 2016, compared to the same period last year. Inland tourism has been doing well in particular as locals’ appetite for staying at Hungarian hotels and the like grew by 6.1%. And experts wouldn’t be bothered by the May figures that ended up being slightly more modest.

“All-in-all, May produced last year’s high level which makes us happy. The data for May was further influenced by the fact that May 1 was a Friday in 2015, whereas this year it was a Sunday, therefore there was one less long weekend in May 2016,” Gusztáv Bierneth of the Hungarian Tourism Agency told the Budapest Business Journal. On the other hand, fluctuations in guest night numbers are also natural to some extent. The weather or changing exchange rates of certain currencies may be an additional factor, not to mention a change in the political situation of the country the tourist comes from.

Don’t underestimate voucher power Some have speculated that the rise in terrorism attacks at popular tourist destinations might have contributed to the positive developments, prompting local travelers to stay at home and diverting foreigners to safer havens like CEE. However, Bierneth believes that the full impact of terror attacks can only be

measured by peak season figures, since both Turkey and Egypt are typically summer destinations for Hungarians, so a fall of those markets wouldn’t alter travelling habits in the first few months of the year.

“It is important to highlight that such effects can be only assumed since travelrelated decisions are influenced by several other factors,” Bierneth said. “In the short-term, the turn of events due to the terror threats may be favorable to us, as we can capitalize with great deals and marketing. But in the long run it’s in everybody’s best interest if stability comes about and destinations would compete against one another based only on their own strengths.”

Another key development of inland tourism is that the use of SZÉP national voucher card is also witnessing new records. The vouchers, redeemable at tourism businesses, allow employers to give their workers additional compensation that is taxed at a lower level than regular pay. Hungarian guests shelled out HUF 6 bln in this way, an increase of 8.9% compared to the previous year.

Many attach further potential to this, not least Dr. Ákos Niklai, president of the Association of Hungarian Hotels and Restaurants. As he points out, domestic guests pay some 22% of accommodation bills using this method of payment. “The popularity of the SZÉP card is beyond

any doubt, it is key that it continues to exist. We would like employers, in turn, to make available even bigger amounts of money to employees in order to further speed up their related spending,” he says.

Filling up quickly These positive trends naturally affect occupancy rates, which are now reaching levels that were last seen before the recession. But there is still room for improvement, both on a regional basis and in terms of accommodation categories. “Pre-season and post-season activity should be developed more for this purpose. At the moment existing capacities are fine. There are some projects to build quality boutique hotels in Budapest in the pipeline, but that’s just enough for now,” Niklai said in assessing the situation.

Occupancy rates could be improved in an even more spectacular manner as a result of upcoming international sports events. The World Aquatics Championship in Budapest in 2017, for example, should draw large crowds from abroad. “Television broadcasting adds to image building immensely. Platform diving, for instance, will take place with the Parliament building as a backdrop, which will be of huge marketing value by itself,” Niklai said. But other regular events such as the Formula 1 race and the Sziget Festival add their share to growth

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PROMOTION

Setting the bar high at Buddha-Bar As one of the top-end hotels in Budapest, the BuddhaBar Hotel Budapest Klotild Palace is a standard bearer in the Budapest luxury accommodation business. The hotel’s General Manager, Tamás Fazekas, answers questions about the tourism industry and his hotel.

Dr. Ákos Niklai, president of the Association of Hungarian Hotels and Restaurants, explains the possibilities of Hungarian tourism. On the facing page is one of the country’s biggest draws for visitors: Lake Balaton.

“The dollar is strong, so European travelling for Americans is high on the agenda. The British, in turn, come to Budapest for 2-3 days, typically since the city is perfectly connected with several airports.” too. “During Sziget, not everybody sleeps in tents,” Niklai noted.

Apart from domestic tourists, foreigners have been more active than the year before as well. Certain countries stick out from the crowd, such as Poland from where 35% more visitors came in May than a year earlier. The northeast of the country, namely Nyíregyháza, the wine region around Tokaj, the wellness center at Hajdúszoboszló and Debrecen have in particular been attracting an increased number of travelers from abroad.

From amongst the Western countries, the United Kingdom and United States of America excelled in particular. “The dollar is strong, so European travelling for Americans is high on the agenda. The British, in turn, come to Budapest for two-to-three days typically, since the city is well connected with several airports used by budget airlines. The exchange rate of the pound might become an issue, though, since sterling has now weakened [post-Brexit]. But we still can offer great value for money,” Niklai said. Russia, on the other hand, has sent a lot less people to visit according to the latest figures.

Perhaps the newly restored summer flights to the airport near Balaton will come to the rescue here.

Defying Airbnb The hotel industry’s great performance is even more remarkable in light of

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the rise of sharing economy-based accommodation services like Airbnb.

Some 20,000 hotel rooms now compete against as many as 8,000 places on Airbnb alone. Niklai says, however, that it’s good for Budapest as revenues are increasing as a result. He believes, though, that government regulation is long overdue in order to establish a level playing field.

Regardless of the challenge posed by the sharing economy, revenues in the hotel industry have also gone up, not only guest nights. The jump of 5.1% for May is regarded by some still a bit shy. Yet, experts warn that pushing up prices cannot happen overnight. It must be added that the hike for the first five months of the year was a lot more substantial, nearly hitting the 10% mark.

“That is a wonderful result considering that last year’s base figure was already high,” Bierneth noted.

He believes that Hungarian tourism is markedly underpriced for its quality.

“When the Hungarian Tourism Agency was established, we set the goal to significantly increase revenues, and not the number of guest nights, since we see that this is the area where we’ve got the most to do. We are confident that now that this year’s marketing budget has been doubled for next year, and with the help of EU and domestic development funds, we can achieve a radical positive change in terms of revenues.”

Tamás Fazekas, General Manager, Buddha-Bar Hotel Budapest Klotild Palace.

There seems to be steady growth in five-star and luxury hotel development in Budapest. Do you see the field as expanding? How is the luxury hotel business in Budapest in general?

We experienced a significant growth in the last 1-2 years both in terms of occupancy and average rate, which is very positive. This year looks also very promising, even though the growing trend is slowing down.

What is the busiest time of year, and what kind of business do you see most? Tourists? Conventions?

Business travellers? Where do you see opportunities for growth?

We can see a slight change in the seasonality during the year. The classic peak periods (May-June and SeptOct) are still dominating, however the gap between “high” and “low” seasons has become much smaller – especially during the summer months - and hope we can keep extending the peak seasons. Opportunities we can see are mainly in the convention segment, hopefully the planned congress hall will contribute to the increase of this segment.

What is the secret to staying competitive in this market? How can the Buddha - Bar Hotel stand out?

Service, creativity and added value are key. We are happy we could extend our services, namely we have recently opened a new Lebanese restaurant in the hotel, where we are glad to see a great demand.

What are some of the new developments of interest at the Buddha - Bar Hotel? Are you expecting any changes in the future?

As mentioned before we have just recently opened a new Arabic restaurant, which represents the highest level of this type of F&B outlet in the city. This summer, we are operating on two terraces, to facilitate the demand during the summer months.

How are things going at the Baalbek Restaurant?

We always try to renew our offers in the restaurant and build a returning clientele. We are very happy to see a great demand in the restaurant since its opening, and now during the summer months our cozy shisha terrace is especially popular.

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Hotel spas: A wellness vacation h

You don’t have to be a tourist to enjoy the spas at the best hotels in Budapest. Locals are generally welcome, with monthly memberships available. Here we provide reviews of the various amenities around the capital.

ANIKO FENYVESI

Aria Hotel Budapest Perfectly located amid a cluster of stunning historical buildings in central Pest, the Aria Hotel pays homage to the turn of the previous century by transforming a once dilapidated apartment building into a stunning hotel.

Built up around a central courtyard which houses the hotel’s main restaurant, the Aria Hotel Budapest, like all other hotels in the Aria family, is designed around a specific theme. Here it’s all about music, with each wing of the hotel dedicated to a particular genre, from opera, to classical, to jazz and contemporary music. This concept extends into the hotel’s spa facility as well, allowing guests to choose the music to match their treatment. An elevator down one floor from the lobby opens onto a luxurious subterranean spa

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complete with 15-meter pool, Jacuzzi, treatment rooms and a state-of-the-art gym. Private trainers are also on call to engage all interested in an underwater cycling session or any other form of aqua aerobics. Adjacent to the pool area there is a Finnish sauna, an infra sauna, and a steam bath, all subtly lit for maximum comfort, while cabana style lounge beds are the perfect spot for having a nap post treatment. For those who prefer to take their workout outdoors, the Aria offers rooftop yoga at its High Note SkyBar where you can not only enjoy the morning sun during your asana, but also a beautiful view of the city’s rooftops, in particular the neighboring St. Stephen’s Basilica dome and towers. ariahotelbudapest.com

Buddha-Bar Hotel Budapest The Buddha-Bar Hotel Budapest is part of a trio of properties – including Paris and Prague – that was created as an extension of the popular Buddha-Bar restaurant in Paris. Although the focus of the hotel is primarily on its food and beverage offerings, the spa provides a peaceful respite in this otherwise busy part of the city center. Adorned in the obligatory Buddha statues and accented with red and black, the spa may be compact but it has all the necessary amenities from the 37°C hot Japanese bath, to the cold water plunge pool, as well as an infra sauna, a Finnish sauna, steam room and warm tepidarium beds for relaxing post soak. The Buddha-Bar’s signature treatments feature a deep tissue Swedish massage, a stretching massage and a warm stone massage, which make use

of semi-precious stones. The spa works with products from Hungarian cosmetics maker Adrienne Feller, who made a name for herself outside of Hungary before being sold locally, as well as professional anti-aging products from Natura Bissé, out of Spain. buddhabarhotelbudapest.com

Corinthia Hotel Budapest The Corinthia Hotel spa has an impressive 130-year history and was opened exactly ten years before the adjacent hotel, then called the Grand Hotel Royal. In the early days the complex was fed by the same waters as the Szechényi baths and featured a wave pool as well as steam and pneumatic chambers and electric treatments for ailments such as gout and insomnia. In 1903 the spa was connected through direct access to the hotel at a time when moneyed classes from across the Austro-Hungarian Empire would come to Budapest either to visit the spa or dine at the Grand Hotel Royal or partake in both activities. Sadly, the spa closed in 1944 and lay dormant for several years before it was rediscovered in the 1980s, when plans were afloat to turn the space into a car park for the hotel. Fortunately it was saved and underwent a detailed reconstruction, opening its doors in 2006 as the Corinthia Hotel’s spa. Although the spa is no longer fed by thermal waters it does contain some wonderful amenities including two Jacuzzis and a 15-meter pool covered with a beautiful stained glass roof and framed by sets of massive marble columns. The spa also holds two Finnish saunas, a large steam room as well as several areas for lounging. Lavish

treatments incorporate the exclusive line of spa products from ESPA out of England. Spa treatments begin with a personal consultation to determine the best treatment options, which range from the ESPA body ritual featuring a mud wrap and massage or the back, face and scalp treatment that focuses on pressure points to relieve stress and tension. Relax post massage on the warm waterbed. Preand post-natal pampering is another of the spa’s specialties, as are ayurvedic massages and couples treatments. corinthia.com/hotels/budapest/spaand-wellbeing/

Four Seasons Hotel Gresham Palace Budapest Not only is this one of the city’s most impressive landmark building’s, it also houses one of Budapest’s most beautiful hotels and equal care has been taken in the construction of the hotel’s spa.

Unlike other facilities of its kind, the Four Seasons spa is located on the top floor and receives maximum natural light. Fronted by a small boutique that offers everything from souvenirs to designer clothing, the spa facilities can be accessed by a set of glass stairs leading up to the 12-meter infinity edge pool, which has floor to ceiling windows looking out onto the hotel’s courtyard and the Budapest skyline.

Next to the pool area is a Jacuzzi and a separate steam bath and sauna for men and women. Befitting the lavish surroundings, the spa caters to the whims of clients by offering tailor made treatments from renowned Hungarian cosmetics line Omorovicza that derives

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n here in town

At top: Receiving a facial at the Gresham Palace. Immediately above: The pool area of the Aria Hotel. On the facing page is the lovingly reconstructed main pool of the Corinthia’s spa. its power from Hungarian thermal waters. The spa also uses French antiaging product line Biologique Recherche.

The strange machine that staff lovingly call the DJ deck is actually a faceremodeling machine that exercises your facial muscles through electric impulses.

To work the full body less passively, the spa also contains a 600-sqm fitness area equipped with technogym machines and small windows that offer spectacular views onto the Danube. fourseasons.com/budapest/spa/

extracted from the plains of southeast Hungary, complemented by products from the U.K.’s Elemental Herbology line.

The 90-minute treatment is designed to relieve joint pain and improve circulation and also includes a facial or scalp massage as well as a full body massage. It will leave you feeling refreshed and with dewy soft skin. kempinski.com/en/budapest/hotelcorvinus/

Kempinski Hotel Corvinus Budapest

The InterContinental hotel first opened in 1981 at what is still one of the best locations in the city: on the bank of the Danube, a stone’s throw away from the Chain Bridge. In the early days, guests visiting the hotel’s pool had a view of both but that spot has since been taken over by the hotel’s executive lounge. The new spa is hardly a modest affair though. It still sports a fair sized, heated pool (30°C) and a 24-hour gym that is large by hotel standards. Spa guests are provided with all the essentials, including bathrobes, towels and slippers as well as liquid refreshments and sweets in the front lounge area. The spa’s spacious Finnish sauna runs at 90°C, while the steam bath is set at 45°C. Signature spa treatments for those looking for something extra include the two-hour, full body massage with products that incorporate the healing properties of minerals from Hungary’s Hévíz – the country’s largest thermal lake. The all-encompassing global lift is a popular anti-aging treatment, while the anti-cellulite treatments promise visible results in just a few visits. budapest.intercontinental.com/en/spa

Set on the edge of a central square, the Kempinski Hotel’s spa maximizes on the proximity of this green space by transforming it into poolside views.

The spa facility is quite spacious with a 15-meter pool and adjacent lounge area where guests can sip tea, read a newspaper or listen to music on the headphones provided. The wellness area, separated by a door from the remainder of the spa is a bastion of tranquility with all manner of facilities to choose from including a tepidarium, aromatherapy cabin, steam room, Finnish sauna and Kneipp-bench as well as a crushed ice dispenser to refresh the skin. For many, the highlight of the spa experience is the luxurious treatments based primarily on the seasons, with spring treatments providing rejuvenation, summer treatments focusing on cooling, fall treatments designed for relaxing and winter being the best time for a deep tissue massage to ease joint pain. The spa’s signature treatment – Hungary Holistic – features a full body wrap using mineral rich mud

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InterContinental Budapest

21

PROMOTION

Fine accommodations in Füred

The Hotel Silverine Lake Resort offers luxury accommodations in Balatonfüred, one of the first resort towns on Lake Balaton.

Andrea Rádóczy, hotel owner and CEO, spoke to us about her hotel, and the tourism business.

Hungary has been experiencing a boom in tourism, have you been enjoying high occupancy rates at your hotel?

Naturally, actual trends in the tourism can always be felt at our hotel. The signs of positive trends after the crisis could be felt as early as 2014. We had a really outstanding year in 2015 which was the best year since the hotel opened in 2006 December 15th. I would like to underline one key piece of data from last year. We achieved an occupancy level of 70%, which counts as a serious result for a hotel near Lake Balaton. We trust this trend will continue and through effective National Tourism marketing as well as local and own work, we will be able to reach new markets.

You run one of the higher end hotels in Balatonfured. What is the luxury hotel business like in Fured? Do you get many luxury guests?

Luxury has a different meaning for different people. Therefore I would like to phrase my answer differently. We would like to be forerunners in something that differentiates our hotel from our competitors. And this something is harmony, which is well reflected by the location of the hotel being directly next to the water. The harmony can be found in the colors of our rooms and social spaces, in the direct connection of the wellness section and the fauna and flora of Balaton, and the interior Mediterranean sentiment of our vivid stores.

What about conventions? Do they form an important part of your business?

Some 25% of our traffic is generated by this segment, which we are planning to further improve. Our conference rooms

and section rooms are superbly suited to those who prefer their event, meeting, or conference to be all about them, instead of being one of the many. A special place for team-building exercises is our own yacht port, which can host 52 vessels.

From there we can launch a fleet of 10 boats for 70-80 people.

Why do people choose your hotel over others?

I trust that my previous answers provide a basis for people choosing our hotel.

What is more, I need to point out that as we are a small hotel, our guests always come first for us. The kindness of my colleagues and the guest-centered crew have been mentioned as number one in the feedback given by our guests. Direct contact with our guests is the top priority for us. For example, our chef offers all the food prepared by him personally every evening. I can also mention our Amarillys Cafe with an opening to Zákony walkway, which is one of the most frequented place of our guests, many of whom know my colleagues by name.

The government has been talking about increasing tourism by expanding the length of the season. How can that be done in Füred?

I believe that Füred can offer possibilities that are attractive for tourists during the whole year. The infrastructure is almost done, the city is practically ready for being open for 12 months. The only tasks to be tackled include finding qualified workforce, establishing a good marketing, and making availability flawless. I believe in these terms the government can provide a great help.

Is there anything else you would like to add?

Balaton, especially Balatonfüred and its direct environment, as well as the Káli basin, has unique natural resources which make it a leader among European lakes.

It could be important to communicate this abroad, to increase the number of nights spent by foreign guests in Hungary.

Here availability is really important too, as even if a product is good, but reaching it is difficult, then there will be fewer guests arriving.

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Hotel development: Rooms to grow

Construction of hotels is increasing in Hungary, especially in the country’s busiest tourist market, Budapest.

“This shows the timely reaction of developers to the improving performance of the Hungarian hotel market since 2013.” rooms with the first 80 room phase due to be completed this year. The complex, designed by the KJT Architects Studio, will include student accommodation.

In the central fifth district, the threestar Dorottya 8 Hotel is scheduled to be completed this year with 120 rooms. On Andrássy út, the four-star AB Palace Hotel is set to deliver 110 rooms and the Small Grand Hotel in the seventh district will deliver 107 five/four-star rooms later this year.

GARY J. MORRELL

Hotel development in Hungary has recovered from the 2008 crisis and is now going strong, with 15 hotels opened last year, providing more than 800 rooms according to CBRE. Budapest is the leading tourist destination in Hungary, enjoying a 37% share of guest arrivals. Some 86% of Budapest hotel guests are foreigners.

Last year, more than ten million guests were registered at hotels in Hungary. On the back of such favorable performance, the hotel sector is now considered to be an attractive investment asset for both developers and investors. The current average hotel occupancy rate in Budapest stands at above 80%, and as of the end of 2015 total hotel room supply in Hungary stood at almost 60,000 rooms.

A total of close to 19,000 new rooms were registered in 2015 in Budapest and preliminary data indicates further growth in hotel room supply for this year according to the hotel and hospitality consultants, Horwath HTL Hungary.

Further, year-to-date data for the first five months of 2016 shows a 6% growth in demand with further year-on-year growth for the entire 2016 expected; 19.42 million guest nights were registered in Hungary in 2015 with 7.95 million hotel nights registered in Budapest in 2015.

Major deliveries this year include the five-star Ritz-Cartlon Budapest, the luxury chain’s first hotel in Hungary, which was officially opened on April 12.

The newly renovated facility, on the site of the former Le Meridien Hotel, offers 170 rooms and 30 suites. Also opened this year was the Hotel Moments, an impressive renovation on Andrássy út.

There are at least 33 hotel projects at the construction or preparation stage in Hungary according to the latest research from the Hotel Association of Hungary (MSZÉSZ) and Horwath HTL. It is forecast that 13 hotel projects (approximately 550 rooms) will be completed in the countryside and approximately 20 projects (2,840 rooms) in Budapest between 2016 and 2019, indicating a 5% growth in total room supply outside the capital and around 15% in Budapest. “This shows the timely reaction of developers to the improving performance of the Hungarian hotel market since 2013,” said Horwath HTL.

Flock of hotels completed last year Last year 22 new hotels were completed in Hungary, including four projects in Budapest. These were refurbished historic buildings, mainly boutique hotels, in the town center, with an average of 70 rooms.

The quality is defined as mid- to upperscale. The centrally located boutique style Prestige Hotel delivered 85 high

BBJ_2415_spec_report.indd 22

Longer pipeline

The stunning renovation of the Hotel Moments on Andrássy út.

New Budapest hotels opened in 2015-2016 Name

Location

Category

Rooms

Opened

Prestige Hotel Budapest Bo33 Hotel Family & Suites Aria Hotel 12 Revay Hotel Mirage Medic Hotel Ritz-Carlton Budapest Hotel Moments TOTAL: 7 hotels

V. Vigyázó Ferenc u.

VII. Szövetség u.

V. Hercegprímás u.

VII. Révai u.

VI. Dózsa Gy. út V. Erzsébet tér VI. Andrássy út

4*superior 4* 5* 4* 4* 5* 4*

85 62 52 56 35 200 90 580 rooms

Q2 2015 Q2 2015 Q4 2015 Q4 2015 Q1 2016 Q1 2016 Q2 2016

Source: MSZÉSZ, Horwath HTL research, BBJ

level rooms following a €10 million investment. This is the latest boutique hotel redevelopment project in central Pest by Mazen Al Ramahi.

Outside of the capital, new deliveries tended to be four-star wellness and spa-related hotels in established tourist destinations, comprising on average 50 rooms. The biggest opening last year was the Hotel Füred in Balatonfüred, providing a spa and conference center and 200 upscale rooms. Most of the 25 hotels opened in 2015-2016 were threeor four-star according to MSZÉSZ and Horwath Consulting.

CBRE have traced nine scheduled new deliveries for this year constituting around 800 rooms. According to the estimate, Budapest will account for 72% of new supply with five openings with an average of 115 rooms per hotel project. The company defines the

majority of these as “upscale downtown refurbishments.” Outside of Budapest, CBRE have traced four hotels under development specializing in medical, golf and rural tourism. “The pipeline for 2017 indicates further new supply growth, predominantly in the capital. Two projects in the CBD are under construction, while others are still at the planning stage.

The average size is growing to 120 room hotels,” said CBRE. MSZÉSZ and Horwath Consulting have identified 13 hotels projects outside of Budapest, representing 548 rooms. In Nyíregyháza, the five-star Krúdy Vigadó Hotel is scheduled to be delivered in 2017.

The largest project under construction in Budapest is the four-star Hotel di Verdi by Palermo Properties on Üllői út in the out-of-center ninth district opposite a metro station on the main road to the airport. It is planned to deliver 200

In the longer pipeline, the Mellow Mood Group is redeveloping the listed Párizsi Courtyard in the central fifth district that will deliver a 120 room five-star hotel in 2017, along with retail units and restaurants. Archikon has designed the redevelopment project. The group, owned by Sameer Hamden and Zuhair Awad, will have a portfolio of 13 hotels in Hungary. Close by, the southern building of the Klotild Palace is under development and is scheduled to deliver 156 five-star rooms in the first half of 2018.

Also in central Budapest the Hotel Clark in Clark Ádám tér is planned to deliver 86 four-star rooms designed by the Aspectus Architect Zrt. in 2017.

At the luxury end of the hotel market there are plans by a Qatari investor to redevelop the former Hungary National Ballet Institute building (the Drechsler Palace) on Andrássy út into a fivestar hotel in 2018-19. The 17,000 sqm listed building originally constructed in the 1880s is located opposite the Opera House and has been in disuse for several years. There are a number of under-utilized historic buildings in the center of Budapest that have the possibility of being developed into hotels. Although debt finance is becoming more accessible as the market improves, the development process and planning in the historic center can be long, protracted and expensive.

In Vörösmarty tér the Renaissance Hotel Marriott will deliver 180 five-star rooms in 2017-18. Private Palace hotel is scheduled to complete in 2017-2018 with 200 five-star rooms.

The successful performance of the Budapest Airport is regarded as having contributed to the success of the hotel market in 2015 according to Horwath HTL. Following the bankruptcy of Malév Hungarian National Airlines, the passenger volume dropped by nearly 5% in 2012, falling to 8.5 million passengers. However, since 2013 the airport has experienced a continuous growth in passenger volume. In 2015 the total number of passengers exceeded 10.29 million people. It is projected that the number of passengers will reach 11 million people in 2016.

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Hungarian firm brings augmented reality to tourists

With technology remeniscent of the ‘holodeck’ in ‘Star Trek’, Computing System’s Kft. is hoping to use a device based on gesture control to revolutionize museum tours, education and the real estate business.

LEVENTE HÖRÖMPÖLI-TÓTH

When visiting the great historical sites of Europe, the fear many parents with teenagers have is hearing them complain of boredom. The generation of so-called “screenagers” tends to have a very limited attention span, making it increasingly difficult to keep their attention whether it’s about culture, education or any other field with substance.

A new innovation by Computing Systems Kft., a Hungarian IT firm, aims to help young audiences, but it could also enhance the overall user experience. It uses augmented reality (AR) to engage users by letting them swipe their way through historic sites or simulate highly technical building tasks. Forget prehistoric joysticks, controllers or mice, this is pure gesture control.

And the possibilities of AR go beyond a simple book. Entire landscapes can be recreated with special lighting techniques, turning museum exhibits into something more like the “holodeck” from the Sci-Fi series “Star Trek”.

Turning virtual pages Stakeholders in tourism have showed the biggest interest. One pilot project runs in a winery in Mád, where an interactive AR-based book is available to visitors.

Guests forced to wait in lines, or those who find it hard to move around, should welcome its features, which allow users to turn the pages of a virtual book by simple hand motion.

“Imagine being able to tour any historic site in its ancient form, as it originally looked. This can become a reality now, not to mention the fact that you could gain virtual access to sections of a tourist site that are not open to visitors. That’s what the novelty is all about,” Marcell Kovács, CEO of Computing Systems Kft. tells the Budapest Business Journal.

No heavy lifting needed Computing Systems’ tool focuses on AR, but development has taken a turn to engage virtual reality (VR) as well.

“You can attach your cell phone to a VR helmet and your phone communicates with our software via streaming. The software interprets your motions by using the data transmitted by the phone’s camera. The point is you are not hanging on a cable like in the case of, say, an Oculus helmet. You are free to move,” Kovács notes.

Apart from tourism, all levels of practice-oriented education could benefit,

BBJ_2415_spec_report.indd 23

Augmented reality can help visitors learn about wines in Mád. from vocational schools to R&D centers.

“You can avoid risky operations where contagious or heavy material is dealt with; this technology enables you to lift and put into place items that weigh tons in reality,” Kovács explains. “You can equally dismantle highly complicated tools and examine their parts to the tiniest detail. The range of possibilities is truly infinite.”

Augmented reality real estate The real estate business has reasons to welcome the invention too.

Developers can model planned buildings in 3D, which enables them to make modifications based on a real lifelike experience.

“Our solution is costly, therefore it is ideal for large construction projects only such as big budget office facilities or residential buildings with a high number of apartments. But in those cases it can be part of a killer sales pitch. If you are thinking about buying a flat or renting an office, wouldn’t you be fascinated if you could inspect the venue as if it was already there?” Kovács says.

The residential rental and property sales markets will need to wait, though, at least until costs come down. Computing Systems has the prototype for now and a breakthrough could be close at hand, but word-of-mouth helps at this stage. The company also channels in available EU funds, while continuously fine-tuning its product.

“We are talking to mayors, facility managers and other key decision makers at major tourist sites in Hungary. We are spreading the word in education and our product should soon step into the limelight abroad. The hype is out there, it won’t be long before it catches fire,” the CEO predicts.

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Budapest Business Journal | July 29 – September 2, 2016

PROMOTION

Hungarian customers prefer watching sports broadcasts on projectors

According to recent research, conducted

by Kutatópont on behalf of Epson, to review sport-viewing habits in Hungary, if sports fans ran a hospitality establishment they would invest in purchasing a projector.

We asked Gáspár Tőrös, Product and New Business Solutions Manager for Epson Hungary about the results of the research.

Is it true that sports fans are committed to the large format display technological solutions?

In the age of smartphones and tablets it is remarkable that only a small number of people follow sports competitions on smart devices having smaller displays, according to the research. Almost two-thirds of those sports fans who organize a gathering for cheering at their friend’s house during international sport events own a television with its screen bigger than 100 cm. Some 23% of this group would rather change their TV to a projector right now, if they had the opportunity to do so. The study revealed that people prefer watching sports broadcasts on bigger screens.

The research shows that the majority of the respondents prefer to follow sports broadcasts during popular international events together with friends, and only 10% of them plans to purchase projectors. What is the reason behind this?

We found that those who plan to purchase a projector had noted the lack of space to project on in their homes and the price of the product had been keeping them from buying one. However, the majority (55%) of them would be willing to spend between HUF 151,000 to HUF 250,000 on a projector. Epson’s widespread portfolio contains projectors with 3LCD technology and user friendly set up, available for the price of a television. What is more, short distance projectors can easily set up to project on smaller surfaces as well, so that Epson, as a leading manufacturer, meets customer demands.

The study also revealed that onethird of catering establishments would switch to projectors. In terms of customer experience, what are the benefits of using a projector in the hospitality business?

During popular international sports events and continental championships, catering

BBJ_2415_spec_report.indd 24

establishments expect an increase in the number of guests, while the guests have demands of high image quality, even in outdoor places like beer gardens. Epson projectors offer an equally high white brightness and color brightness (or Color Light Output – CLO) which helps to create sharp, smooth and flowing images, even in daylight conditions. The members of hospitality and catering businesses now have the solution in their hands to meet the needs of sports fans. Most of the establishments possessing a projector believe displaying sports events with a projector comes with many benefits, including that it increases the number of guests, and raises the standards and appreciation of the establishment across social media channels.

What are the trends in Hungary regarding meeting customer demands in the hospitality segment?

Most of the respondents of the survey acquire a beer house, a pub or a bistro with the capacity of hosting 10 to 500 people, but restaurants, inns, wine bars and coffee houses took part in the study as well. According to the research, one of the most important aspects when choosing a public place to watch sports events is whether the place is equipped with a projector or not. In addition, most (63%) of respondents suggested that they would invest in purchasing a projector if they were running a pub or a beer garden. Nearly one-fourth of the catering establishments already uses projectors, yet one-third of the hospitality establishments who lack projectors are planning to purchase one. Thus, the rise in meeting the customer demands is clearly visible, and more and more businesses have been realizing that they need to widen their range of services to stay competitive.

What are the most important factors when choosing a projector?

Respondents consider the image quality, the functionality (i.e. easy transportation) and Color Light Output (CLO). The latter is notably essential to one-fifth of the hospitality establishments surveyed – those who own a place with a terrace or a garden – because it is crucial in their case to project bright and sharp images day and night.

Travel agencies go upmarket

Not pushing trips to Hungary: The website of OTP Travel. The firm’s director, Judit Molnár, says the company’s main business comes from booking trips to exotic places and serving the high end of the market.

With the internet making it easy for anyone to shop around for the best deals in cheap flights and hotels, travel agencies say they keep busy by serving the top end of the market with exclusive offers.

CLAUDIA PATRICOLO

Given how easy it is to shop for cheap flights and hotels online, does anyone need travel agencies anymore?

Well, someone must need them in Hungary, as there are 1,150 registered travel companies in this country, according to the Association of Hungarian Travel Agencies (MUISZ).

Less than one-fifth – only 180 – of the travel agencies are members of MUISZ, but those firms are obviously the busy ones. Out of the HUF 170 billion in business handled by travel agencies, those 180 firms were responsible for roughly 80% of the business, said Judit Molnár, vice president of MUISZ, and director of OTP Travel.

Apparently, keeping up with the stiff competition online means ceding the territory of super-cheap travel to websites.

“Some say offline is the new luxury travel, and we play on that,” said a statement from Vista Travel, one of the largest travel agencies in the country.

“Our goal is to offer something different from others in the market.”

Along with simply booking, Vista said, the firm also seeks to provide information that others might not.

“Customers need prompt and responsible information regarding destinations,” the statement insisted.

Molnár agreed that, these days, travel agencies need to provide more services, for more money, and aim for the top end of the business.

“The internet changed lots of things.

Now it is possible to book tours online, so we face competition from booking websites, like Expedia. It is better to bet everything on quality and offer unique, organized trips, like cruises or travel to exotic places,” she said. “There are two kind of travelers: corporate and leisure.

Today we are focusing on corporate travel, so we are dealing with business travelers, politicians, diplomats or people too busy to organize a trip themselves, like doctors or lawyers. We offer quality tours, so we address our services to high market clients.”

While they do serve some tourists coming to Hungary, to enjoy music, spas and wine tasting, a lot of OTP Travel’s business involves serving Hungarians who leave the country.

“Most of our profit comes from outbound travel, and we could fail if we focused only on neighboring countries.

Today we are focusing on cruises, group travel, and trips to far-away places like Iran or China. The most requested destination now is Israel,” Molnár said.

Another key to being successful in the business is to be known. Vista said it has been able to make a big name for itself by developing a following well before the internet mattered. “We started business in 1989, just at the right time, when Hungary fist opened its borders to the world. We built a very strong market during those years,” the statement said.

OTP Travel goes back even further, as it was founded back in 1984, under communism, when there was little competition, by OTP Bank, now the country’s largest bank.

According to Vista, reputation is all.

“Our frequent travelers – 60-70% of our customers – trust our brand, our solid knowledge of what we sell and our cooperative attitude,” the statement said.

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Five-stars hotels in Budapest

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2

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5

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357 700 56 17

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1051 Budapest, Széchenyi István tér 2.

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349 698 33 10

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1051 Budapest, Erzsébet tér 7-8.

(1) 429-3777 (1) 429-4777 hotel.corvinus@ kempinski.com

zoltán árvai Katalin Miszkiewicz Éva Keller

1014 Budapest, Hess András tér 1–3.

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top local executive cfo maRketing diRectoR

addRess pHone fax email

claus geisselmann Éva Alexa Michael Borges

1052 Budapest, Apáczai Csere János utca 12–14.

(1) 327-6333 (1) 327-6357 budapest@ihg.com

Jean pierre mifsud Csaba Pálos Ralph Mehrabani

1073 Budapest, Erzsébet körút 43-49.

(1) 479-4800 (1) 479-4333 budapest@corinthia.com

Hilton budapest / danubius Hotels zRt.

321 642 23 24

3,323

270–560 270–560

✓

✓

–

–

✓

✓

✓

–

–

–

1976 2015

Danubius Hotels Nyrt. (100) –

tHe aquincum Hotel budapest / tHeRmal Hotel aquincum zRt.

2,291

265 265

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

www.aquincumhotel.com

310 620 8 14

1991 2006

– Corinthia Investments Ltd. (100)

gábor nemes Orsolya Dobosi –

1036 Budapest, Árpád fejedelem útja 94.

(1) 436-4100 (1) 436-4156 info@aquincumhotel.com

Hilton budapest city / West end Szállodaüzemeltető kft.

230 460 29 13

2000 2015

West End Magyarország Zrt. (100) –

Rainer gieringer – –

1062 Budapest, Váci út 1–3.

(1) 288-5500 (1) 288-5588 info.budapestcity@ hilton.com

✓

2000 2016

– Al Habtoor Group, Dubai (100)

marcus a. loevenforst Octavio Calderin Claudia Venturini

1051 Budapest, Erzsébet tér 9–10.

(1) 429-5500 (1) 429-5555 reservations@ ritzcarlton-res.com

–

2006 2015

– Boscolo Hotels S.p.A (100)

oliver Hutten Margit Mátyás Adrienn Musits

1073 Budapest, Erzsébet körút 9–11.

(1) 886-6111 (1) 886-6192 reception@ budapest.boscolo.com

www.budapest.hilton.com

www.budapest-city.hilton.com

9

31 30

sofitel budapest cHain bRidge / accoRpannonia Hotels zRt.

www.kempinski.com/ budapest

6

Ÿ

364 478 22 17

www.sofitel-budapest.com

oWneRsHip (%) HungaRian non-HungaRian

383

budapest maRRiott Hotel / duna szálloda zRt.

www.marriottbudapest.com

4

402 603 26 12

seRvices

yeaR establisHed yeaR last Renovated

1

Hotel name / name of opeRating company Website

no. of Rooms no. of beds no. of suites no. of meeting Rooms

Rank

Ranked by number of rooms

tHe Ritz-caRlton, budapest / adRia palace kft. www.ritzcarlton.com/en/ hotels/europe/budapest

boscolo budapest Hotel / boscolo Hotels HungaRy kft. www.boscolohotels.com

BBJ_2415_spec_report.indd 25

200 216 30 6

185 414 29 12

2,485 (2014)

110–310 110–310

2,440

290 290

5,630

250-450 290-540

✓

✓

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–

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–

2016. 07. 27. 20:14

www.fourseasons.com/ budapest

12

boscolo Residence / boscolo Hotels HungaRy kft. www.boscolohotels.com

13

14

maRRiott executive apaRtments / duna szálloda zRt.

www.marriott.com/hotels/ travel/buder-millennium-courtbudapest-marriott-executiveapartments

ibeRostaR gRand Hotel budapest / ibeRostaR HungaRy kft. www.iberostar.com

18

19

aRia Hotel budapest / ik Hotels kft. www.ariahotelbudapest.com

st. geoRge Residence all suite Hotel de lux / st. geoRge apaRtmanHáz kft. www.stgeorgehotelbudapest. com

20

baltazáR boutique Hotel / zsidai csopoRt

www.baltazarbudapest.com

Ÿ= would not disclose, NR = not ranked, NA = not applicable

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✓

✓

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–

✓

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–

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–

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addRess pHone fax email

✓

2004 2015

– (100)

yves giacometti – –

1051 Budapest, Széchenyi István tér 5–6.

(1) 268-6000 (1) 268-5000 budapest.pbx@ fourseasons.com

–

2011 –

– Boscolo Hotels S.p.A (100)

oliver Hutten Margit Mátyás Eric Montagnon

1073 Budapest, Osvát utca 2–8.

(1) 424-4700 (1) 424-4799 reservation.residence@ newyork.boscolo.com

✓

1997 2015

– CEE PROPERTYINVEST Immobilien GmbH (100)

Rick enders John Majosi Mária Kocsis

1052 Budapest, Piarista utca 4.

(1) 235-4888 (1) 235-1900 budapest.reservations@ marriotthotels.com

–

2012 2012

Mellow Mood Invest Kft. (100) –

tamás fazekas Kata Szalóky Noémi Oláh

1052 Budapest, Váci utca 34.

(1) 799-7300 (1) 799-7301 info@buddhabarhotel.hu

✓

2007 –

– (100)

andrea kunos – –

1074 Budapest, Dob utca 63.

(1) 882-3000 (1) 882-3099 welcome@queenscourt.hu

✓

2007 –

– CPI Hotels a.s. (100)

istván nagy-szász – –

1063 Budapest, Andrássy út 111.

(1) 462-2118 (1) 322-9445 reservations.andrassy@ mamaison.com

–

2011 2011

– IBEROSTAR Hotels & Resorts (100)

antonio montoro – Anikó Udvaros

1051 Budapest, Október 6. utca 26.

(1) 354-3050 (1) 269-0687 grand.hotel.budapest @iberostar.com

– Henry Kallan (47.50), Alexander Rovt (47.50), Robert Izsak (5)

mario magalhaes Dorottya Drén Renáta Hupuczi

1051 Budapest, Hercegprímás utca 5.

(1) 445-4055 (1) 445-4046 stay@ ariahotelbudapest.com

– (100)

gábor Jusztin – Andrea Farkas

1014 Budapest, Fortuna utca 4.

(1) 393-5700 (1) 393-5705 info@stgeorgehotel.hu

Zsidai Group (100) –

zoltán Roy zsidai – –

1014 Budapest, Országház utca 31.

(1) 300-7051 (1) 300-7051 hello@ baltazarbudapest.com

otHeR

event

caR Rental

inteRnet in Rooms

gaRage

beauty salon

Wellness

family fRiendly

business coRneR

RestauRant

5,630

200–400 250–500

✓

top local executive cfo maRketing diRectoR

160 160

1,962

350 370

570

100–300 100–300

61 136 7 4

868

120–160 120–160

50 124 3 1

555 (2014)

Ÿ Ÿ

44 58 5 4

625

370 370

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✓

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–

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–

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–

2015 –

26 52 26 2

248

129-269 139-279

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–

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2007 2007

74 266 – 1

mamaison Hotel andRássy budapest / cpi Hotels HungaRy kft.

Ÿ

270–480 295–505

oWneRsHip (%) HungaRian non-HungaRian

6,208

queen's couRt Hotel & Residence / md Hotel management kft.

www.mamaison.com/budapest-andrassy-hotel.html

17

108 216 – –

102 208 27 3

www.queenscourt.hu

16

138 193 138 –

buddHa-baR Hotel budapest klotild palace / melloW mood invest kft. www.buddhabarhotel.hu

15

179 358 17 6

yeaR establisHed yeaR last Renovated

fouR seasons Hotel gResHam palace budapest / fouR seasons Hotels inc.

single Rate (euRo/nigHt) double Rate (euRo/nigHt)

Hotel name / name of opeRating company Website

seRvices

total net Revenue in 2015 (Huf mln)

11

www.bbj.hu

Budapest Business Journal | July 29 – September 2, 2016

no. of Rooms no. of beds no. of suites no. of meeting Rooms

Rank

26 4

11 22 4 1

Ÿ

100–300 100–300

–

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2013 –

This list was compiled from responses to questionnaires received by July 27, 2016 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

2016. 07. 27. 20:14

5 Socialite BBJ

Sziget season

One of Europe’s largest music festivals, Sziget takes over Budapest’s Óbuda Island from August 10-17. We pick some highlights in our What’s On column on Page 28.

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5 Socialite

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Budapest Business Journal | July 29 – September 2, 2016

WHAT’S

ON

Fun things to d o in Budapest for the nex t t wo weeks.

MUDHONEY July 29, A38 Mudhoney began its foray into music in 1980, when teenager Mark Arm formed the band Mr. Epp and the Calculations in the Seattle suburb of Bellevue with a few high school friends, including Steve Turner. After the disbanding of Mr. Epp, Arm and Turner went on to form Green River and later the Thrown Ups; with the addition of drummer Dan Peters and bassist Matt Lukin, they became Mudhoney in 1988. The new foursome took the punk metal formula of Green River and the Melvins, added a dollop of ʼ60s garage rock swagger and a large portion of Fun House-era Stooges. Their first release came out on the Sub Pop label in 1988 at a time when the heavy Seattle Sound, later known as grunge, was growing in popularity. The band released their 25th Anniversary blowout album, “Vanishing Point”, in 2013. a38.hu DANCEBAZAAR July 29-August 14, Royal Garden Pavilion The National Dance Theater’s outdoor dance series features a colorful variety of dance styles from tango, to flamenco, to contemporary and traditional folk dances. In addition to talents from the Hungarian scene, guest dancers will also be arriving for the festival from Costa Rica and Uruguay. nemzetitancszinhaz.hu FRENCH ROOFTOP CINEMA Through to August 18, Corvin Club Every Tuesday until August 18, the Corvin Club rooftop will screen old and new gems from French cinema including “Two Days in New York” (dir.

Julie Delpy) on August 4 and “That Man from Rio” (dir. Philippe de Broca) on August 11. Screenings begin at 8:45 p.m. and will be shown in French with English subtitles.

Franciaintezet.hu GIUSEPPE VERDI’S “OTELLO” July 29-30, Margaret Island Open-air Stage Verdi’s “Otello”, an opera based on Shakespeare’s tragedy, will be performed in the great outdoors as part of the Budapest Summer Festival,

BBJ_2415_socialite.indd 28

with world-renowned soprano Andrea Rost and American tenor Marc Heller in the leading roles. The tragic tale of the Venetian Moorish general Othello addresses themes of jealousy and devotion. “Otello” is one of Verdi’s last pieces and embodies a magical union of drama and music. This performance follows a successful run at the Hungarian State Opera House. The critically acclaimed young conductor Gergely Madaras will lead the Budapest Philharmonic Orchestra and choir.

Presented in Italian with Hungarian subtitles. szabadter.hu TOKYO-BUDAPEST ENSEMBLE July 30, BMC The Tokyo-Budapest Ensemble has performed in Hungary every summer since 2002 and at least 40 times at the Budapest Music Club (BMC) to a near full house every time. The ensemble’s artistic director Kálmán Berkes has his fingers in many pies, as a teacher at the Japanese Musashino Academia Musicae and as the artistic director of the Győr Philharmonic Orchestra. He directs the young members of the ensemble, who change every year and are made up principally of students from the Japanese academy and young members of the Győr Philharmonic. bmc.hu WOMBO ORCHESTRA August 1, A38 The Wombo Orchestra is like a large musical family, frequently travelling with their horns and other instruments and putting on intensely energetic shows wherever they land. Whether on the streets or a concert hall stage, the band reveals its musical universe through unconventional brass band arrangements and helps audiences rediscover the horn and percussion in all its rhythmic glory. Melodic vocals add the finishing touches, often delivered with gusto through a megaphone. a38.hu 100-MEMBER GYPSY BAND August 4, Vajdahunyad Castle The Summer Music Festival at the Vajdahunyad Castle will close its 25th year with a concert from one of Hungary’s favorite gypsy bands, which

Rihanna. is currently made up of 138 members.

This world-renowned orchestra pays homage to traditional gypsy and folk music and more popular classical tunes

by Brahms, Erkel, Monti, Sarasate, Liszt, J. Strauss, Bizet and Tchaikovsky. The concert will be held in the renaissance style Karoly courtyard, which is rarely open to the public. vajdahunyad.hu PLACIDO DOMINGO August 10, St. Stephen’s Basilica World-renowned opera singer Placido Domingo will make a stop in Budapest to perform popular opera arias, excerpts from musicals and traditional Spanish tunes. Young musicians and new talents discovered through the “Operalia” song contest will join Domingo for the event, alongside Hungarian musicians and singers accompanied by the Hungarian State Opera Orchestra. The concert is free to attend and will be held in front of the Basilica or inside in the event of bad weather. en.bazilika.biz THE CHEMICAL BROTHERS August 10, Sziget Festival, Main Stage It was precisely ten years ago this year that Mancunians Tom Rowlands and Ed Simmons transformed the world into a massive dance floor with their albummonster “Dig Your Own Hole”, which remains a trademark of electronic dance music. Subsequent releases have carried on in that vein with the latest, “Born in the Echoes”, coming out last year and quickly making it to the top of the U.K. Album Chart. To date, the band has had more number one albums than any other dance act in the U.K. szigetfestival.com RIHANNA August 11, Sziget Festival, Main Stage Rihanna is one of the world’s most successful pop singers and at 28 she is the youngest female artist to achieve 14 number one singles, win eight Grammy Awards and 12 Billboard Music Awards.

“Work” the first single off her much

Placido Domingo. anticipated new album, had more than 100 million plays in the first two weeks after being posted on YouTube. Her immense popularity is sure to be a big draw for Sziget and is quite a catch for the festival organizers. szigetfestival.com SIGUR RÓS August 13, Sziget Festival, Main Stage Icelandic post-rock band Sigur Rós have over the past two decades become known for their ethereal sound and the falsetto vocals of front man Jónsi Birgisson, as well as the use of a bowed guitar. The band’s sound also incorporates elements of classical and minimalist aesthetic.

After three years of relative silence, the band released new material through a “slow-TV” event in Iceland entitled “Route One”, which is part music video, part road trip and part travelogue. The song premiered at the Primavera Sound Festival in Barcelona this month. szigetfestival.com

2016. 07. 27. 20:11

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www.bbj.hu

Budapest Business Journal | July 29 – September 2, 2016

29

A weekend break in sunny Szeged When it’s time for a day or two away in Hungary, but you’ve already done Lake Balaton, this scenic southern city offers a dramatic change of scenery with no need to leave the country.

DAVID HOLZER

An easy drive or train ride away from Budapest, Szeged lies on the banks of the river Tisza in the deep south of Hungary, and offers a great weekend break out of the capital. Szeged is known as “the city of sunshine” because of the high number of hours of sunlight in which it bathes annually.

In the height of the Hungarian summer, sunshine is perhaps not such a big deal.

But maybe it’s those extra hours that have given Szeged its relaxed, laidback, The splendid Ferenc Móra Museum, near the river Tisza, above. Heroes Gate, below. almost Mediterranean vibe. So when you’re contemplating a relaxing weekend trip outside the always bustling capital, Szeged offers another flavor of Hungary Built in 1869, after the railway altogether.

Strolling through history Visitors to Szeged are spoilt for choice when it comes to comfortable, affordable hotels in the compact city center. After checking in, your first taste of the city should perhaps come from a stroll along the banks of the broad Tisza.

One of the most surprising things about the center of Szeged is the grandeur of its architecture. The splendid Ferenc Móra Museum near the river is an excellent example. Built in 1869, after the railway reached the city and Szeged regained its status as a royal free town, the museum was originally the Palace of Education.

Today, Szeged University is one of the highest-ranked in Hungary and among the top 100 in Europe. Its popularity with international students helps give the city a welcome cosmopolitan flavor that complements the broad avenues and leafy parks of the city center.

We have the great flood of 1879 and the actions of Hapsburg Emperor Franz Joseph to thank for these. After the flood, which wiped away almost all of the existing town, the Emperor promised that Szeged “will be more beautiful than it used to be”. He was as good as his word.

Aficionados of Hungarian Secessionist architecture, a close relative of Art Nouveau, will be pleased to know that there are several notable examples in Szeged. The remarkable Reök Palace in the city center, built in 1907, now houses the Regional Arts Center and is open to the public from Tuesday to Sunday.

Another beautiful example of Hungarian Secessionism well worth visiting is the New Synagogue, built

by Lipót Baumhorn in 1903 and still regarded as one of the most beautiful in Hungary.

BBJ_2415_socialite.indd 29

reached the city and Szeged regained its status as a royal free town, the Ferenc Móra Museum was originally the Palace of Education.

The finest fish soup For many Hungarians, Szeged is the true home of paprika, the potent spice made from powdered capsicums – more commonly known as peppers. Peppers are an excellent source of vitamin C. As any proud Hungarian will tell you, the benefits of vitamin C for health were first established

by Albert Szent-Györgyi, a researcher at the University of Szeged in 1933.

One night Szent-Györgyi’s wife served him fresh red paprika for supper. He realized this was the one plant he’d never tested for vitamin C. Testing the pepper in his lab, Szent-Györgyi discovered it was “a treasure chest full of vitamin C”, as he wrote in his autobiography. SzentGyörgyi was awarded the Nobel Prize for his discovery in 1937.

Paprika is a vital ingredient in Szeged halászlé, a fiery fish soup made of carp and catfish caught in the Tisza. If you’re especially brave, you can add fresh peppers to your fish soup as a garnish.

But, be warned, these are seriously hot.

Have a glass of something long and cold standing by.

There are many places to taste halászlé in Szeged. But working on the principle that locals always know best, head for the Kiskőrössy Halászcsárda, a friendly, unpretentious joint a five-minute drive upriver from the city proper. The halászlé here is famous for being the best in Szeged. Your only problem is that, once

you’ve tried it, no other halászlé or fish soup of any kind will ever come close.

(A word or warning, though. While Kiskőrössy Halászcsárda is a must for lunch, mosquitoes make it a nightmare on a summer evening.)

Should you have the inclination – and space – for dessert, head back into the city center. The newly renovated and reopened Virág Cukrászda és Kávéház on Klauzál tér is a Szeged institution, famous for its grand interior, its ornate cakes and its ice creams. Try the Esterházy, made to a recipe unchanged since the café first opened its doors.

However, if more food is out of the question, you might like to try the Anna Gyógy thermal baths, a short walk across the city’s charming central park. Popular with locals, the baths are arranged around a central lawn, ideal for a siesta.

Bring an empty bottle with you and fill it from the water fountain outside the baths. It’s believed to have healthgiving properties.

Szeged Open-Air Festival This is the 85th year of the Szeged Open-Air Festival, deservedly one of the highest profile cultural events in the whole of Hungary.

Gyula Harangozó, the festival’s artistic director, has made sure that this year’s program is a good mix of new productions and highlights from past years. It includes opera, dance, operetta, musical theater, prose drama and symphonic music. If you’re a lover of “Les Misérables”, the performances on July 29 and 30 are sure to be particularly spectacular.

Festival performances take place in Dóm tér (Cathedral Square), where you’ll find all of Szeged’s most important monuments and buildings.

It has to be said that tickets for the festival are often like gold dust at this time of year but you should definitely try to take in a performance. To be honest, you can always listen for free under the stars at one of the cafés near to the square: Far more romantic.

A dip in the River Tisza On a fine summer morning, there’s no doubting the charms of Szeged. Why not rise early and stroll over Belvárosi híd?

Make your way to the tiny sandy beach on your right and begin your day by dipping your feet in the water and contemplating the view of Szeged across the wide, majestic Tisza. Fix it in your memory until the next time you visit.

2016. 07. 27. 20:11

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Budapest Business Journal | July 29 – September 2, 2016

Wine: Vagaries of vintages all part of a winemaker’s job Mother nature is hitting some wine regions pretty hard this year.

ROB SMYTH

While we have been able to enjoy the recently-released fruits of the fine 2015 vintage for white wines, the current growing season is already proving to be a challenging one for Hungary’s vintners.

On July 13, the smallest Hungarian growing region of Somló, source of some of the country’s biggest white wines, was hit by a severe hailstorm that saw golfball sized hailstones beat down of the fledging grape bunches, devastating this year’s crop and even causing damage to the vines themselves. The Kreinbacher Winery, fresh from the impressive feat of bagging Hungary’s first two gold medals ever at the prestigious Champagne & Sparkling Wine World Championships (CSWWC) in the U.K., saw a whopping 90% of its grapes wiped out. This just shows how much the wine industry is at the mercy of nature, which is appearing to behave increasingly erratically. Thankfully, fans of Kreinbacher can still get their hands on several back vintages and Somló wines do pick up serious complexity with age. The Káli Basin, close to Balaton’s

Swiss-German winemakers Erhard and Evelyne Heumann from Siklós. northern shore, was also hit but not as badly. France, especially Burgundy, has also taken a beating by hail.

There are also reports of fungal diseases in many parts of Hungary with heavy rain followed by hot temperatures providing ideal conditions for the likes of downy and powdery mildew to develop. These can seriously impact both yields and quality, as they did in 2014 – when insult was added to injury by heavy rain at harvest time arriving to dilute the flavors of those grapes that had happened to come

through unscathed. Heavy rain also hit the 2015 vintage but only once most of the grapes had been picked, although Szekszárd winemakers are not expecting the best vintage for reds as the lateripening grapes were still out on the vine when the heavens opened in early October.

Those who pursue organic winemaking, of which there are now quite a few in Hungary – using only the likes of copper, sulfur and orange oil to spray their vines and protect them against disease – will likely find it particularly difficult in 2016.

While the 2016 growing season started early in Hungary due to above average temperatures in early spring bringing about early budding, it unfortunately raised the risk of damage from frost and nature duly obliged. The night of April 25, followed by further sub-zero nights, saw alarming levels of frost damage.

However, just like in neighboring Austria, the situation does not appear quite as grave as the original prognosis. Many winemakers have spoken of strong second growth. Robert Gilvesy, the CanadianHungarian owner of the Gilvesy Winery in the region of Badacsony, on the northern shores of Lake Balaton, said that two lower lying plots had what looked like drastic damage. “We earlier thought these areas we had 80-90% loss. However, the fine weather and resilience of the vines shows now in these areas maybe a 20-30% loss,” he said.

Frost in Villány Jack Frost made it all the way down to the southern region of Villány and hit the Heumann Winery’s rows of the usually frost-resistant Riesling, whereby many of the first buds were destroyed. While initially the worst was feared, replacement bunches have now appeared and owner Erhard Heumann hopes that the younger bunches may even synchronize with the earlier bunches that survived and can

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Budapest Business Journal | July 29 – September 2, 2016

10% Cabernet Sauvignon, but the 10% of Kékfrankos gives it a nice local touch, both in terms of composition and style.

Heumann’s single varietal Kékfrankos is among the country’s finest. The grape also makes up the lion’s share (70%) of the crispy yet substantial rosé, along with 30% of Merlot, in 2015.

The Heumann Winery is actually situated in relatively bleak surroundings on the Siklós industrial estate but the decision to concentrate on the wine first and foremost is admirable and has paid dividends. They’ve now also opened a wine bar in a cute old cellar on Villány’s high street, at Baross Gábor u. 39, for the tasting public. Here, it was nice to get the opportunity to taste an older Kékfrankos, from the 2007 vintage. It’s a grape that truly ages well – as countless Blaufränkisch wines from Austria’s Burgenland prove – although you can hardly find any old vintages of the good stuff in Hungary. The Heumann 2007 Kékfrankos still has lots of fresh red fruit going for it, which is beautifully coupled with tertiary complexity. A good option in the hot weather is the lighter but still quite concentrated Kadar o (sic), which is 95% Kadarka and 5% Portugieser (formerly known as Kékoportó or just Oportó and hence the “o” on the end of the name). Its floral aromas and plethora of primary red fruit, as well as a touch of Kadarka’s rose hip and spice, but with more body than the grape usually has thanks to the high extract, make it the ideal serious wine for summer. It can even be chilled a touch.

Hungary to host 21st Hungarian Wine Route Rally tour of Balaton in August The Hungarian Wine Route Rally is being organized for the 21st time this year, aiming to explore the Lake Balaton Wine Region on August 26-28, according to a press release issued on July 25. The event, dubbed by organizers as a “gentlemen’s rally”, starts from Budapest’s horse-racing track at Kincsem Park, with 100-120 cars setting off on a 700-kilometer drive to discover the Somló, Badacsony, Balaton Highlands, Boglár, Zala and Balatonfüred-Csopak wine subregions of the Balaton area. One of the key objectives of the rally is to introduce the wine regions of Hungary to a wider public. The promotion of responsible driving is traditionally also a key objective, with wine-tasting strictly forbidden to all the drivers, who can count on several tests and speed controls during the competition. The patrons of the 21st Hungarian Wine Route Rally are Interior Minister Sándor Pintér and Minister of Agriculture Sándor Fazekas. Besides the sponsor cars provided, the professional partners in organizing and conducting this year’s event are the National Chamber of Agriculture (NAK) and the National Food Chain Safety Office (NÉBIH).

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Customer experience means everything in medical care How important is the customer experience for people seeking health care? If a patient has a better customer experience with their care provider, will it increase the quantity of care they seek and improve the quality of care they receive?

At Dr. Rose Private Hospital, we place special emphasis on making sure our patients have the maximum possible satisfaction in the services they receive from us.

In the long-term this differentiates us from our competitors, and is one of the key aspects of the hospital. From the very beginning of their treatment, our patients are taken through a perfectly harmonized and professional treatment, which goes a long way to guaranteeing that patients will return in the future, as well as explaining the high numbers of people signing up with us in the first place. The increasing number of patients positively affects the internal operations of the hospital and further raises the standards of our treatments and services. Our experiences show that those who are willing to get better are willing to make a sacrifice to sign up for our treatments, as we offer the highest professional standards possible, with no waiting lines, in 28 specialist areas and all in a modern and pleasant environment. The options for a wardroom with one or two beds,

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and also the à la carte menu, add to our patients’ comfort levels.

hospital fully satisfied. Our workers consider client treatment from a team mindset, and offer customized What sort of things do you do at services for our clients, as patients and your healthcare facilities to improve as individuals at the same time. The customer experience? basis of outstanding client treatment All of our staff –receptionists, nurses and at our hospital includes fast, careful doctors – work in maximum harmony, and problem solving attitudes. As our concentrating on the needs of the patients are in the center during their patients. This is a form of teamwork treatment, all operational activities and where everybody makes the effort to processes in our hospital are adjusted offer premium services. The ability for to this “ars poetica”. patients to chose the appointment time and the doctor contributes to Do you obtain feedback from the comfort of our clients, while they you patients? Do you use their can experience the same level of suggestions to improve the professionalism at every stage of their experience? treatment. All of our doctors excel Naturally, after each treatment we in their area of expertise and are ask our patients to fill in a form so we internationally renowned. The hospital can receive direct feedback on the uses the most up-to-date technology services and standards our hospital for its treatments, while both the layout offers. All of the forms are evaluated, and the interior design shows that it and if necessary, the patients and is really important for us to make our the doctors are consulted to find patients feel good. possible shortfalls in our services, and to fix them immediately. Our How many members of staff are work processes are continuously focused on customer experience? being evaluated in this way, and our What contributions do people employees enroll in constant training, like receptionists, administrators, so they can develop their skills and nurses and doctors make to the stay up to date, to generate added overall experience? value to our high quality standards.

Every member of staff at Dr. Rose works on making the best impression Is there anything else you would like on our patients, so that they leave our to add?

We strive to establish a relationship with our patients that stems from trust, and that can only be achieved if we are doing our absolute best to meet the requirements of all our patients to the highest standards. We are convinced that the best advertisement for us is a satisfied customer; we therefore invest a lot in our clients being satisfied with us. We put more emphasis on this than on advertising in the classical sense.

The gradual growth of our results and patients proves that this theory works especially well in this sector.

TEL: (+36) 1 377-6737 WEB: www.drrose.hu ADDRESS: Széchenyi square 7/8, 1051 Budapest

NOTE: ALL ARTICLES MARKED PROMOTIONAL FEATURES ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

thereby be harvested at the same time.

Riesling tends to favor cooler climates so it may be a surprise to find it down in the sweltering climes of Villány, but some of the world’s best Riesling comes from Australia (such as Claire Valley) and I have even tasted an excellent example of this noble German-Alsatian grape variety in Israel (from the Sphera Winery). It’s more a matter of finding a cooler site, as the Heumann Winery has done on the Siklós side of the Villány region, and harvesting before the structure-building acidity dips off. The limestone-rich soils of Siklós also serve to preserve the acidity and related freshness that makes Riesling so unique. Heumann’s 2014 Riesling (Rajnai rizling) is varietally pure with lime, peach and green apple aromas, as well as that characteristic freshly-opened tin of tennis balls scent. The 6.4 g/l of residual sugar is balanced out by the rather high acidity of 8.7 g/l. Incidentally, the aforementioned Gilvesy makes some of the purest Riesling I’ve tasted in Hungary.

Heumann is a name that tends to fly under the radar in Hungary but this SwissGerman couple, the Swiss part being Erhard’s wife Evelyne, along with their talented Hungarian winemaker András Theisz, are causing a stir internationally with their reds striking a great balance between liveliness, concentration, intensity and finesse. Lagona 2012 recently scooped 90 points from the U.K.’s Decanter wine magazine. This wine is almost a Bordeaux-style blend, being composed of 40% Cabernet Franc, 40% Merlot and

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GRUPPO T.F.M. KFT. 1068 Budapest, Király u. 102.

5TH DISTRICT

10TH DISTRICT

13TH DISTRICT

60 SQM – 3 ROOMS, MAGAS STREET

67 SQM – 3 ROOMS, BOGLÁR STREET

90 SQM - 3 ROOMS, VERES PÁLNÉ STREET

1000 SQM – 20 ROOMS, SÖRGYÁR STREET

122 SQM – 4 ROOMS, VÍGSZÍNHÁZ STREET

200 SQM – 5 ROOMS, RÁKOSPALOTA

At the foot of the Buda Castle, this very well divided, quiet apartment in good condition has nice view over the city.

Nice view from the balcony, this apartment in good condition benefits of kitchen with window and it is located close to the Danube.

42.900.000 HUF

16.900.000 HUF

The building is elegant and completely renovated with elevator. This very nice apartment has 2 bathrooms and the fully fitted kitchen is included in the price.

This two storey villa house that needs renovation has 8.392 sqm of lot, original oak staircase and nice garden. It was the summer residence of a famous Hungarian brewer family.

Beautiful view over the Víg Theatre, this sunny, top floor apartment has separate rooms, 2 bathrooms and private gas heating. It is situated in a nice, period building with elevator.

This two storey family house built on 380 sqm of lot, has 2 bathrooms, wardrobe room, big terrace and parking space. It is located in a family house area.

56.000.000 HUF

160.000.000 HUF + VAT

65.900.000 HUF

57.500.000 HUF

1ST DISTRICT

+36.1.201.0403

1ST DISTRICT

3RD DISTRICT

+06.1.379.0506

3RD DISTRICT

+36.1.351.0446

6TH DISTRICT

+36.70.646.6818

11TH DISTRICT

+36.70.701.2348

15TH DISTRICT

14TH DISTRICT

+36.70.398.8754

DUNAKESZI

113 SQM – 3 ROOMS, SZILÁGYI DEZSŐ SQUARE

54 SQM – 2 ROOMS, TÖRZS STREET

60 SQM – 2 ROOMS, TERÉZ CIRCUIT

72 SQM – 2 ROOMS, BARTÓK BÉLA STREET

51 SQM – 2 ROOMS, GYARMAT STREET

116 SQM – 5 ROOMS, DUNAKESZI ALAG

Beautiful view over the Danube, on one of the most imposing square of the city, this very spacious apartment in good condition is situated within a nice period building.

This completely renovated, very sunny, high floor apartment has separate rooms, balcony and it is situated within a well maintained building with elevator.

This apartment is situated within a nice period building, adjacent to Oktogon Square. It is perfect for anybody seeking a renovation project in a perfect area.

This high floor apartment in good condition has 2 balconies and it is situated in a well maintained building with elevator.

27.900.000 HUF

36.000.000 HUF

This very well divided family house built on 1074 sqm of lot, has 4 bedrooms, 1 living room, 2 car garage and beautiful, well kept garden.

58.900.000 HUF

29.300.000 HUF

This very sunny, garden facing apartment benefits of separate rooms, closed balcony and private gas heating. It is located in a very green and quiet area.

19.900.000 HUF

47.400.000 HUF

+36.1.201.0403

2ND DISTRICT

+36.1.430.1403

3RD DISTRICT

+36.70.3156.087

6TH DISTRICT

+36.1.720.2433

11TH DISTRICT

+36.1.612.5475

14TH DISTRICT

+36.70.399.0399

DUNAKESZI

65 SQM – 3 ROOMS, FILLÉR STREET

59 SQM – 2 ROOMS, GYENES STREET

78 SQM – 2 ROOMS, KIRÁLY STREET

127 SQM – 4 ROOMS, KALOTASZEG STREET

53 SQM – 2 ROOMS, TÖRÖKŐR STREET

350 SQM – 7 ROOMS, DUNAKESZI CENTRE

Beautiful view over the Rózsa Hill, this completely renovated, very bright apartment benefits of separate rooms, fully fitted open kitchen and large windows.

This park facing, completely renovated, well divided apartment with balcony is situated within a condominium with elevator, in a silent and green area.

In a beautiful, renovated period building with elevator, this very bright, high floor apartment that needs renovation benefits of 2 separate entrances.

In a new building, this completely renovated, well divided, sunny apartment benefits of separate rooms, sauna, terrace and garage.

In a green area, in a building with nice common garden, this completely renovated, sunny apartment has nice view over the nearby gardens, air conditioning system and balcony.

This three storey, luxury family house has 684 sqm of lot, 4 bathrooms, big terrace, swimming pool in the beautiful garden and 2 car garage.

49.000.000 HUF

27.900.000 HUF

95.000 EUR

67.000.000 HUF

22.900.000 HUF

115.000.000 HUF

+36.1.336.1706

2ND DISTRICT

+36.1.430.1403

4TH DISTRICT

+36.1.351.0446

6TH DISTRICT

+36.1.720.2433

12TH DISTRICT

+36.1.612.5475

15TH DISTRICT

+36.70.399.0399

FOR RENT

2045 SQM – LOT, TÁRKONY STREET

58 SQM – 2 ROOMS, LŐRINC STREET

69 SQM – 3 ROOMS, Ó STREET

104 SQM – 4 ROOMS, ISTENHEGYI STREET

110 SQM – 5 ROOMS, PESTÚJHELY

500 SQM – 2 APARTMENTS, HUNYADI JÁNOS STR.

This lot has beautiful panorama, 15% coverage possibility and the possibility to build a 4 apartment condominium. Electricity and water on it, gas is in the street.

This completely renovated apartment benefits of fully fitted kitchen, wardrobe room and air conditioning system. It is located in a silent side street. Good connection to public transport.

This penthouse apartment is situated within a new development, only a few minutes away from Andrássy Blvd. Benefits of a 24 hours concierge service. Fully fitted kitchen and furniture.

This renovated, three storey terraced house has 2 bathrooms, 2 terraces and a parking space in the courtyard. Good connection to public transport.

In a new building, this very spacious apartment benefits of fully fitted kitchen, balcony, air conditioning system, 50 sqm of private garden and parking space in the courtyard.

2nd district: Beautiful view over the Buda Hills, 2 separate apartments within a villa house with balconies, terraces, sauna and 5 car garage. It is located in a silent side street.

99.000.000 HUF

21.900.000 HUF

79.900.000 HUF

58.000.000 HUF

38.500.000 HUF

2.500 EUR/month

+36.1.376.6080

2ND DISTRICT

+36.1.782.7275

4TH DISTRICT

+36.70.3156.087

9TH DISTRICT

+36.1.789.2846

152 SQM – 5 ROOMS, ÚJPEST

77 SQM – 2 ROOMS, RÁDAY STREET

220 SQM – 6 ROOMS, MÁTYÁS KIRÁLY STREET

In a new built building, this duplex apartment has panoramic views, living room, 3 separate bedrooms with 3 bathrooms, balconies, terraces and 4 parking spaces in the garage.

This new built, two storey family house has 360 sqm of lot, 2 bathrooms, terrace, garage in the garden. It is located close to Újpest Centre.

In the city centre, in a pedestrian street, this very bright apartment in good condition has private gas heating and it is situated within a renovated period building with elevator.

On the Sváb Hill, next to forest, this duplex part of a house has panorama from the balcony over the Buda Hills, 2 bathrooms, private garden and garage.

59.900.000 HUF

34.900.000 HUF

85.000.000 HUF

+36.1.336.1706

3RD DISTRICT

+36.1.782.7275

5TH DISTRICT

+36.1.351.0446

10TH DISTRICT

+36.1.789.2846

13TH DISTRICT

57 SQM – 3 ROOMS, GYŰRŰ STREET

72 SQM – 2 ROOMS, SZALAY STREET

180 SQM – 6 ROOMS, SZÁRAZ STREET

41 SQM – 2 ROOMS, DAGÁLY WALKWAY

This garden facing, bright apartment in good condition has separate rooms, kitchen with window, wardrobe and it is situated within a renovated building with elevator.

Very nice apartment with nice view from the balcony, on the top floor of a period building with elevator, near the Parliament. Price includes furniture.

This park facing, two storey family house has 2 bathrooms and 2 car garage. It is located in a quiet and green area.

In a new built building with elevator, this garden facing apartment has fully fitted open kitchen and 22 sqm of terrace. Price includes furniture.

15.999.000 HUF

52.900.000 HUF

67.000.000 HUF

28.500.000 HUF

+36.1.379.0506

+36.1.351.0446

+36.70.646.6818

+36.1.376.6080

12TH DISTRICT

140 SQM – 4 ROOMS, KILÁTÁS STREET

112.000.000 HUF

+36.70.398.8754

+36.70.701.2348

WELCOME

ARE YOU LOOKING FOR APARTMENT?

WWW.TECNOCASA.HU CONTACT US: INFO@TECNOCASA.HU

EACH AGENCY INDEPENDENTLY OWNED AND OPERATED. • THESE OFFERS ARE VALID, TILL THE APARTMENTS ARE SOLD. • THESE INFORMATION DO NOT CONSTITUTE A CONTRACTUAL ELEMENT.

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