Energy crisis forces Hungary’s largest hotel to close for winter

The European energy crisis is coming straight at Hungary’s largest hotel: the 499-room Danubius Hotel Hungaria City Center, will be closed for four months starting on Tuesday.

According to a statement on its website, the hotel in the heart of Budapest will reopen on February 28, Xinhua news agency reported.

Other hotels of the Danubius chain, however, will remain open, management of the hotel said in a letter to Xinhua news agency.

The main reason behind the temporary closure is the difficulty in efficiently running such a big hotel in winter in an overall gloomy economic situation, said the hotel.

The hotel has informed its guests of the closure and relocated its staff.

The hotel has been struggling with high utility bills since August 1 when the government released an amendment to the relevant legislation, asking businesses to pay market prices for gas and electricity.

Although the Hungarian government has capped energy prices for households up to the “national average consumption,” those who consume more than this average volume — including businesses — have to pay market prices which are twice more expensive for electricity and seven times more expensive for gas.

In addition to the Danubius Hotel Hungaria, many other businesses are facing shutdowns. According to Hungary’s local media, dozens of small businesses, including bakeries, butchers, and small theatres, are closing down, or planning to close.

“Kiado/Elado”, which means “to let/for sale”, are among the most frequently seen signboards along the streets of any Hungary city nowadays.

Tamas Flesch, honorary President of the Hungarian Hotels and Restaurants Association, gave a gloomy picture of the situation in a recent interview on Inforadio.

“Hotels with high gas and electricity consumptions will most likely have to close due to their staggering energy bills.”

Flesch said the monthly energy bill for a 150-room hotel has rocketed from 10-12 million Hungarian forints ($24,128-$28,953) to 100 million forints.

“Working together with the National Hospitality Employers’ Association, we are trying to get state support for hotels,” he added.

The hotels that will remain open will inevitably raise prices considerably, he said.

While hotels and restaurants are waiting for a state subsidy, up to half of the spas in Hungary will be forced to close in the first six months of next year due to energy price hikes and a significant drop in the number of guests, said Zoltan Kantas, President of the Hungarian Spa Association.

Hotels, restaurants and thermal spas are the backbone of Hungary’s tourism industry that plays a major role in the national economy. (1 forint 0.0024 US dollars)

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