In a significant development affecting Hungary's tourism sector, the Ministry of Economy has announced the withdrawal of a draft regulation pertaining to the accommodation rating system, initially set to impose fees on lodging providers.

This decision comes in response to widespread concerns from tourism organizations and businesses regarding the proposed fee and the criteria governing the rating process.

According to a statement from the Ministry, 'Acknowledging the opinions of tourism organizations and businesses, the Ministry of Economy has decided to withdraw the legislative proposal on accommodation ratings, maintaining a free rating process.' The decision aims to support the growth of small and medium-sized enterprises, which form the backbone of Hungary's tourism industry, and to contribute to the prosperity of families reliant on tourism.

The accommodation rating system, introduced on January 1, 2022, requires all lodgings—from small guesthouses to luxury hotels—to undergo a mandatory classification process ranging from one to five stars.

However, the criteria and procedures governing this certification were not established in law, leading to criticisms of the system's transparency and objectivity.

The rating operation is conducted by a private entity, the Hungarian Tourism Quality Assurance Nonprofit Ltd. (MTMT), which has been criticized for making arbitrary decisions based on subjective evaluations.

Concerns raised by industry insiders include evidence of disproportionate inspection processes favoring hotels and community lodgings over private accommodations.

For instance, in the case of hotels with fewer than 150 rooms, only a sample of room types is inspected, whereas private lodgings are subjected to full inspections of all available rooms.

Such inconsistencies have fueled discontent among smaller lodging operators, who argue that the mandatory classification system is unsuitable for the diverse nature of small accommodations.

Feedback from the sector highlights issues of fairness and transparency, with operators reporting subjective assessments impacting their ratings unfairly.

The lack of clear guidelines has resulted in accusations of arbitrary decision-making by the MTMT.

Stakeholders in the tourism industry brought forward multiple instances where operators met objective criteria but received lower ratings based on 'general impressions' without clear justification.

Originally intended as a consumer protection measure, the rationale for mandatory accommodation ratings has come under scrutiny.

No significant consumer dissatisfaction was reported that warranted such a system, particularly among private and alternative accommodations, according to the heads of industry associations.

Furthermore, associations allege that the private company's authority to set rating criteria without legal backing has led to a lack of consistency and widespread discontent among operators.

In light of the Ministry's decision to scrap proposed fees, the issue of operational sustainability within the sector remains critical.

Earlier proposals under consideration included a fee schedule that would impose financial burdens disproportionately on smaller lodging businesses, raising concerns of fairness when compared to the lower fees for hotels and community lodgings.

The financial implications for the MTMT, which could have generated substantial revenue from the fees, highlighted the challenges smaller providers face in maintaining competitiveness.

Industry bodies have been vocal about their demands for a transparent and fair rating system that acknowledges the unique nature of private and smaller accommodations.

They argue that the classification process should enhance the chances of diverse accommodation types while ensuring customer safety and comfort.

Moves towards greater inclusivity in rating processes will need to be established to ensure the sustainability and growth of the tourism industry in Hungary.