According to Unitravel, a Hungarian travel agency that has operated for 40 years, they’re shutting down not because of any misstep in business, tour organising, or marketing, but because foreign competitors engaged in unfair competition that ultimately drove them out of the market.

Did unfair competition force out a Hungarian travel agency?

In a market economy, competition and efficiency go hand in hand: a business or service can only survive long-term and profitably if it gains consumer trust through reliability and high standards. Success hinges on efficiency and smart deals, allowing a company to undercut competitors and push them out of the market.

However, Unitravel, a Hungarian travel agency, says that wasn’t the case for them. In a recently released statement, the company argued that lax regulations in Hungary allowed in foreign competitors who routinely offered trips below cost solely to drive domestic businesses like theirs into the ground. They claim this is why they were forced to close their storied agency after four decades of success.

While the statement does not specifically name the foreign company that edged them out, it describes a competitor with seemingly unlimited financial resources, aggressive marketing tactics, and prices set below cost, which enabled them to poach Unitravel’s customers. The company argues that such tactics make survival impossible for local Hungarian businesses.

They emphasized that this rival accumulated losses of 1 billion forints in 2023, yet continues to expand aggressively across Hungary, opening new offices in what Unitravel views as an attempt to monopolize the market. Though not stated outright, the implication is that once the competition is eliminated, this player will be free to dramatically raise prices.

A message for customers

The travel agency added that they can no longer serve their customers and advised anyone who hasn’t yet departed for a trip not to do so. However, they will make sure travelers already abroad have a way home. They assured customers that proper financial guarantees are in place to provide full refunds of all deposits and participation fees, in compliance with regulations.

They concluded with an apology for any inconvenience caused.

Could the foreign competitor be Itaka travel?

Dr. Andrea Varga-Damm, former member of the Hungarian Parliament for the Jobbik party, named the foreign competitor in a Facebook post two hours ago. She identified the foreign competitor alleged to be engaging in unfair practices as Itaka, a travel agency. According to her post, the company already lost its equity—earning 1 billion forints in revenue but also losing 1 billion in 2023. She claims that by law, the firm should no longer be operating and should have declared bankruptcy.

“It is the duty of the Competition Authority to investigate those selling products below cost price, impose fines, and, if necessary, suspend their operations,” she added.

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