Determining factors for tourist arrivals in Hungary

Abstract

This methodologically focused study examines the relationships between inflation and unemployment rates, political stability, and tourism, with particular emphasis on the impacts on tourist arrivals in Hungary. The research aims to uncover the direct and indirect influences of these macroeconomic indicators on the volume of tourism, specifically international tourist arrivals. The significance of the study lies in the clear correlation between economic stability and labor market conditions with tourism volume, where rising inflation and unemployment rates negatively correlate with the number of tourist arrivals. This relationship is further strengthened by the observation that improvements in political stability enhance tourist numbers over the long term, while political instability, such as conflicts and terrorist acts, negatively affects tourism demand. These correlations are crucial for aligning tourism policy with economic policy, as macroeconomic indicators and the political environment directly influence both domestic and foreign tourists’ willingness to travel. The research methodology focuses on forecasting using Random Forest and neural networks, which enables more accurate predictions of tourism volume and supports informed tourism policy-making. The findings indicate that the development of the tourism sector is closely linked to economic growth and underscore the necessity of boosting tourism to expand employment and maintain economic stability.