Heviz, Hungary – The tourism and economic impact on a hot springs destination (part two)

This is the second installment of an in depth analysis by the Tourism Observatory for Health, Wellness and Spa (TOHWS), led by László Puczkó, uses a Destination Impact Model (D-TSA) to assess the impact of hot springs tourism on the economy of Heviz in Hungary. Read part one of Heviz, Hungary – The tourism and economic impact on a hot springs destination.

Modelling of impacts

The healing city of Hévíz attracts some 220,000 guests every year who spend 1M guest nights at the destination. There is a roughly 10,000 accommodation capacity in the town. There are also around 300 retail outlets and 150 catering places in town, as well as a total number of 23 hotel accommodation facilities. Many of the hotels are either wellness or medical hotels (note, that in Hungary there is special legislation for medical hotels by law and industry self-regulation is for wellness hotels!).

The main purpose of modelling was to assess how much direct expenditure in billions of HUF (1BN HUF is app. 4.2 M USD) was generated from tourism (and hospitality) in Hévíz. This includes the expenses of domestic and foreign tourists at the accommodation place and other expenses.

The development of tourist traffic in commercial and other types of accommodation

D-TSA collected data and information from guests staying in Hévíz, as well as from accommodation and retail operators. The key input for the D-TSA is the spending, and the structure of spending in particular. We separated the information about spending regarding the mode of transport travelling to Hévíz.

Key indicators

The D-TSA resulted in the following data which can describe the contribution of Hévíz tourism (i.e. some 225,000 health tourists) to the town’s (and national) economy:

• Total direct spending of tourists are realized, which means the generation of GDP of USD 30.6 million (number of visitors multiplied by the spending value meaning some 0.03% of national GDP).
• The total spending generated (i.e. spending generated by people arriving to the destination) of USD 49.6 million
• Thanks to the multiplier effects (suppliers, suppliers of suppliers, etc.), this spending means a total output of USD 127 million in the country (total products and services produced by tourism for other units besides productive and service provider economic units and for own end consumption).
• The multiplier effect is 1.89% i.e. a direct expense of HUF 1 generates a total production of HUF 1.89.
• Tax revenues for the central budget realized in connection with Hévíz tourism amount to USD 19.7 million in total (local taxes mean the taxes of hotels, catering places, retail units, but only the part which is generated as a direct impact of tourism).
• The total value of local business tax relating to tourism and local tourism tax could amount to USD 2.3 million, which is an important piece of information because in lack of this modelling, only the local tourism tax could be quantified for the local government. The local business tax value presented in our model is based on the fact that several service providers have a connection with touris m activities only indirectly or partially, therefore they are not included in local business tax totals, but the D-TSA can present their role.
• Number of employees engaged directly or indirectly in tourism can be estimated to be 2,459 people (note, that the total population of Hévíz is 4,663 persons!)

Tourism is present and becomes increasingly important in the lives of many cities. So is the case for cities with hot or thermal springs! Leaders, residents and businesses of such cities are typically proud of being visited by domestic and/or foreign tourists who will remember the town and its services and residents while being enriched with pleasant memories.

However, this becomes a mere utopic picture if the local government of the city, the businesses and other organizations do not cooperate to achieve this common goal. The idealistic picture often can be nuanced by many factors, such as:

• Local governments are generally unaware of their duties in tourism, therefore they cannot meet the expectations raised either by the visitors, the businesses or the residents (this is not the case in Hévíz as presented in this case study!).
• Tourism creates conflict situations in the life of the cities which, in lack of cooperation, are answered with delay and only partially.
• Service providers in the cities are not prepared for offering an appropriate level of service to their guests, such as health-savvy tourists.
• Destination and city management does not have up to date and quantified data, therefore tourism (and everything related to it) can suffer disadvantages from political and economic point of view.

The application of the D-TSA to Hévíz as a health tourism destination highlights that every destination has different characteristics; therefore this model needs to be adapted according to the local characteristics in each destination.

Results of the Destination Impact Model, 2013

Data defined by the D-TSA offered both the city and destination’s management and their partners’ data and information which supported not only the strategic planning, but also the development and cooperative work with professional arguments and facts.

The D-TSA-type modelling can only offer more accurate/reliable data about the economic impacts of the destinations tourism if the primary data collection is pursued and supplemented with data collection which allows the acquisition of detailed information about visitor spending.

Want to know more?

Should you wish to learn more about the methodology, feel free to contact Laszlo Puczko at The Tourism Observatory for Health, Wellness and Spa (www.thetourismobservatory.org, [email protected]) or Orsolya Horváth ([email protected]).

About the Tourism Observatory for Health, Wellness and Spa

The Tourism Observatory for Health, Wellness and Spa (TOHWS) was created in the Spring of 2012 by globally renown advisors and researchers. TOHWS provides platform for industry, investors and academics. To us travel for health means travel for total health, either medical, wellness, well-being, holistic, spiritual, spa or medical wellness travel. This holistic approach to health makes TOHWS the only global initiative looking at every aspect of the spectrum.

TOHWS experts have been involved in over 100 industry and academic projects in the field of health and travel during the last 20 years. We have written professional books and articles and participated in international and global, as well as very local research and development projects, and spoke over 50 professional and academic conferences worldwide in the last 3 years.