Low-cost airlines bringing rapid growth to Hungary's off-season tourism

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The Travel, Leisure and Tourism Group of the financial consultants KPMG in Central and Eastern Europe has prepared a research study analysing what low cost airlines have brought to the Hungarian market and how the tourism industry could benefit as the low cost airline segment evolves further.

Radio Budapest spoke with the head of the group preparing the study, Andrea Sartori:

"Low budget airlines really opened up an air travel opportunity to many more Hungarians than before, when basically only traditional airlines were present on the market. I would say that the main finding of the study is that there is one clear winner in this battle over prices - the consumer. It is very evident that on certain routes where there is a lot of competition between budget airlines and traditional airlines, for example the Budapest-London route, prices have gone down dramatically and so it is the consumer, who is benefiting."

Obviously, these passengers who come to region, in particular to Budapest, need to be accommodated somewhere. What challenges do hotels face due to this growth in the low-cost airline industry?

"It's a fantastic opportunity for hotels in the sense that we have many more people coming, especially for leisure and for the weekends. They also come to Budapest when it's not the main [tourist] season, which is very important for the hotels. Last year, for example, there was quite a significant rise in occupancy in hotels in the low season period from November until the end of February. This is also due to the impact that low-cost airlines are making. However, it's also making an impact and putting some pressure on the infrastructure development, especially at the airport."

Speaking of infrastructure, Budapest is hoping to become a hub - the biggest airport in the region. What does Budapest have to do to achieve this goal?

"It is an ambitious plan as we have to realise that Budapest is still lagging behind, not only Vienna where they have 50 million passengers - Budapest has approximately 6.5 million - but also behind Prague, where they have almost ten million passengers. It is an ambitious plan and I am not sure whether Budapest will be able to become the regional hub in the short term."

How about the necessary infrastructure? What does Budapest need to do to be able to handle more passengers?

"There is definitely a need to construct a new terminal. There is also the need to improve and increase the parking space because we are forecasting that by the year 2010 Budapest will have approximately 11 million passengers, which means 4.5 million passengers more than we have today. So it's not only parking that needs to be improved but also the connection between the city and the airport and I think Budapest is in desperate need of a rail connection between the airport and the city centre."