Lake Balaton forecast: guest workers to ease labour shortage, relatively low price increase

Service industry professionals expect no major price hikes this year at Lake Balaton. Labour shortages could be eased by the employment of guest workers mainly from third countries, while the difficulties of the construction industry could benefit employers and holidaymakers this summer.

Világgazdaság spoke to László Kovács, president of the Hungarian Caterers’ Association (MVI) about the labour market situation at Lake Balaton this upcoming summer. The president gave promising forecasts for both the labour market and the prices holiday goers may face.

László Kovács pointed out that while in the past two years, the shortage of labour and the price increase have hit both the catering and the service sector at Lake Balaton, “this has changed significantly, with the situation consolidating since 2022”.

Guest workers could alleviate labour shortages

According to László Kovács’s experience, Lake Balaton experienced its largest labour shortage in 2022, which can be attributed to the long-term effects of the COVID-19 pandemic. During lockdowns, a large amount of employees had to change careers, moving, for example, to the construction industry from catering. In addition, the closing of country borders severely limited the possibility of hiring guest workers to fill the gaps.

Now, it looks like changes are on the horizon. First, as László Kovács points out, the construction industry is currently in a period of stagnation. This means that a reverse labour drain is taking place: those who used to work in construction are now looking for work in the service industry near Lake Balaton. This helps hoteliers and restaurateurs a great deal.

Secondly, significant facilitations have been introduced for the employment of third-country workers in Hungary, which will also help to address labour shortages for hotel owners.

“I know of a hotel with 50 Singaporean and Indian employees,”

said the president of the MVI, who also pointed out that guest workers are not more expensive than Hungarians, and that they work to a high standard. The drawback is that they are more difficult to contract because of the bureaucratic procedures, but intermediary companies can help businesses with this.

At the same time, László Kovács explained that guest workers are mainly employed in unskilled jobs: in areas where highly trained individuals are needed, such as for chefs or confectioners, businesses have to find labour through other means.

A price increase of around 8-10 percent is expected at Lake Balaton

A similar positive change is expected when it comes to prices: the factors that have pushed up prices since 2022 are now less present, as raw material costs and energy prices are expected to decrease.

The only factor that remains unchanged is labour costs, but László Kovács thinks that even in this field there is room for compromise. The problem that he highlights is that many places promise an irrationally high income to get workers, that they can only pay in the first month of business when there is a boom in the industry. However, if interest in the restaurant declines, it may close the following month, leaving employees in a tough situation: while initially they received outstanding salaries, now they are jobless.

On the holidaymakers’ side, the president sees a price rise of around 8-10% this year. He says the market will not accept a bigger increase than that: those who raise prices more than that are likely to lose visitors.

This holiday season could be exceptionally strong

Világgazdaság also spoke to restaurant owner Balázs Csapody, who looks forward to a very good season this year. “I have a feeling that Balaton is developing a fan base who are not looking for anything else but Balaton. The feeling of Balaton, the flavours, and everything that makes it unique,” he says.

He also finds that the labour shortage is easing. As far as wages are concerned, he says there is nothing to be surprised about, it is quite normal that wages are much higher today than five years ago.

“It’s good when wages are catching up because the quality of service is rising at the same time.”

He is also optimistic about prices and says that we should not expect the same level of price increases this season as last year or the year before.