Hungary's restaurant and hospitality sector is in a deeper slump than anywhere else in the European Union. Between 2021 and 2024, the number of venues fell by 6 percent, while 22 member states recorded growth. Over the past ten years, the decline is even starker: 18.5 percent of hospitality businesses have disappeared, according to a recent study by the Raconteur Agency.
The study points to a peculiar competitive dynamic: cheap, low-quality street-food outlets catering to foreign tourists are pushing out established restaurants. These outlets, often serving inflated versions of Hungarian classics like lángos and goulash, operate on high margins and attract visitors who spend little—such as stag-party tourists. This not only hurts quality establishments but also damages Hungary's culinary reputation.
Áron Reményik, the study's author and a communications expert at Raconteur Agency, is blunt about the problem. "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," he told Euronews. "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."
Costs at European levels, revenues far behind
Even a record tourism year in 2025 failed to give the sector a real boost. This year, the problems have multiplied. After the election, the strengthening of the forint made Budapest 12–14 percent more expensive for tourists paying in euros, and nation-branding campaigns were halted. In August, foreign tourist arrivals were down 14 percent year-on-year.
Zoltán Kőrössy, founder of Eventrend Group, which operates 35 hospitality venues, says Hungarian restaurants now face a severe competitiveness gap. "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," he explained. "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."
Yet revenues are not at European levels. Austria, with a similar number of venues, generates twice the turnover of Hungary's hospitality sector. The gap is not just about tourists—it reflects the spending power of local customers.
Economist Zoltán Pogátsa notes that two-thirds of Hungarian society live on less money than the EU's lower middle class. Without a broad, solvent middle class, restaurants that rely on returning guests cannot survive. This is a structural problem that no amount of tourism marketing can fix.
The numbers from Budapest are telling. In 2024, for the first time since measurements began, the number of hospitality venues in the capital fell below 8,000. By the end of 2025, the Central Statistical Office recorded just 7,778.
Possible remedies: certification and limits on tourist traps
Reményik suggests extending the certification and inspection system for Hungarikums and authentic Hungarian cuisine to the street-food segment. This would help distinguish genuine local food from tourist-oriented imitations.
He also proposes limiting the number of purely tourist-oriented street-food outlets in the busiest tourist zones. That would not directly give Hungarians more money to eat out, but the likely fall in rents caused by weaker competition could give struggling quality restaurants a slightly better chance.
The broader economic context is challenging. Hungary's inflation has been among the highest in the EU, and energy costs across the bloc remain elevated. For Hungarian households, eating out is increasingly a luxury. As one Budapest restaurateur put it, "We can charge European prices, but our customers earn Hungarian wages."
The situation is part of a wider European trend where farmers and food producers face squeezed margins, but Hungary's decline is uniquely steep. Without a stronger domestic middle class or a shift in tourism strategy, the country's hospitality sector may continue to shrink, leaving only the cheapest and most tourist-oriented options behind.
