Hungary’s hospitality sector shrinks as costs rise and tourist spending disappoints

Hungary’s hospitality industry is facing a deepening crisis, with the number of venues declining faster than anywhere else in the European Union. Between 2021 and 2024, the country saw a 6 percent drop in hospitality businesses, while 22 other EU member states recorded growth. Over the past decade, nearly one in five Hungarian hospitality businesses have disappeared.

A recent study highlights a proliferation of cheap, low-quality eateries targeting foreign tourists—such as lángos and goulash bars—that undercut quality restaurants with high margins. Áron Reményik, author of the study and communications expert at Raconteur Agency, criticized the trend: “I dare say that we are the only country in the world where you can get lángos with Greek salad, lángos with beef stew, and I could go on. There is nothing wrong with a simple dish being good. That is not a problem at all. The problem is when we try to serve this simple dish in a way that means it is no longer that dish, and on top of that we try to attach a gastronomic culture to it.”

Rising costs and weak domestic demand

Despite record tourism in 2025, the sector has failed to benefit. A stronger forint after the election made Budapest 12–14 percent more expensive for euro-paying tourists, while nation-branding campaigns were halted. In August, foreign tourist numbers fell by 14 percent year-on-year. Zoltán Kőrössy, founder of Eventrend Group, which operates 35 venues, told Euronews: “We have reached European price levels in almost every cost category. We pay almost the same for energy and wages. Today, it is cheaper to employ hospitality workers in southern Italy or southern Spain than in Hungary. In Austria, it may still be a little more expensive, but overall, there is not much difference. Raw material prices are almost at the same level.”

The problem is compounded by weak domestic purchasing power. Economist Zoltán Pogátsa noted that two-thirds of Hungarian society lives on less than the EU’s lower middle class, leaving restaurants without a broad base of returning customers. In Budapest, the number of hospitality venues fell below 8,000 for the first time in 2024, dropping to 7,778 by the end of 2025.

Reményik suggests extending certification and inspection systems for authentic Hungarian cuisine to the street-food segment and limiting purely tourist-oriented outlets in busy zones, which could ease competition and lower rents for quality restaurants.