Freedom Has Hurt Once-Prosperous East Bloc Resorts

SIOFOK, Hungary —  On the sun-splashed shores of Lake Balaton, signs hawking draft beer, disco-dancing and nude sunbathing cruises are all in German--evidence of the resort’s popularity as a pleasant meeting ground for the divided families of East and West.

That was the case until this summer, anyway.

Reunification and freedom to travel have opened the rest of the world to East Germans, who for decades provided resorts such as Lake Balaton with the bulk of their summer clientele.

Fledgling private enterprises at spas from the Black Sea to the Baltic have fallen on hard times, losing anywhere from a quarter to all of their usual foreign patronage, as Eastern Europeans sample the waters of the once-forbidden West.

What last year’s democratic revolutions have given Prague, Berlin and Budapest in the way of a hard-currency tourism dividend, they have taken away from the more rural playgrounds of the proletariat.

“This is a funeral for Hungarian tourism,” lamented Laszlo Pinter, comptroller for the Pannonia network, which operates dozens of hotels and pensions along Balaton’s 50-mile-long southern shore. “At first we thought it was the soccer, that Europeans were taking their vacations to see World Cup games in Italy. But German reunification has dealt us a second blow.”

Balaton’s quaint old boardinghouses and shallow-water beaches were a favorite with East Germans and Czechoslovaks because of their proximity to the Austrian border, where West German friends and relatives could inconspicuously obtain visas and join them for lakeside reunions. Visits from one of the German states to the other were expensive and tangled in red tape.

East German visits to Hungary this year are down 70% from the pre-democracy volume, said Lajos Kudar, spokesman for Hungary’s giant, state-owned travel agency, Ibusz.

Likewise, Czechoslovakia is suffering from the Germans’ decision to stay home or spend their marks on low-cost holidays in Spain or Greece.

German visitors accounted for roughly half of Hungary’s and Czechoslovakia’s foreign tourism before this year.

Jan Kucera of the state-run Cedok travel agency, based in Prague, said 400,000 East Germans visited Czech resorts during the first half of 1989, compared to only 65,000 through June of this year.

The Tatra Mountains of northern Slovakia have for decades been jammed with smoke-spewing Trabant and Wartburg autos during July and August, as East Germans headed for the hills and hot springs. This year the roads are empty, and new hostels and restaurants could face bankruptcy before the end of their first season.

East German tours were called off en masse this spring after the announcement of the July 1 monetary union, which traded relatively worthless East German marks for the powerful West German currency. Kucera said a single hotel in Stary Smokovec had 3,500 cancellations, and the East German airline Interflug has dropped all charter flights to the region.

Resorts in East Germany’s Harz Mountains and along the Baltic Sea have lost the intra-bloc trade as well. Rooms and restaurant meals are now valued in precious marks, putting them beyond the reach of most other Eastern Europeans still saddled with unconvertible currencies.

Black Sea coastal resorts in Bulgaria and Romania are also being bypassed. Vacationers from the emerging democracies are not only free to go elsewhere, but they are worried about the political stability of the Balkans, especially Romania.

Although the outlook is bleak for watering holes favored under the former regimes, the capitals of Hungary, Czechoslovakia and East Germany are enjoying bumper years in the more lucrative realm of Western tourism.

This year Hungary and Czechoslovakia have seen 80% increases in the number of Western visitors, who have booked the best hotels in Prague and Budapest through the end of November.

Although Eastern Europe and the Soviet Union drew only 3% of Americans traveling abroad last year, according to the U.S. Travel and Tourism Administration, interest in the region has skyrocketed since the headline-grabbing events of 1989.

A survey released by the American Society of Travel Agents at an annual meeting in Dubrovnik, Yugoslavia, this spring showed that 65% of Americans who were polled considered Eastern Europe the most interesting part of the world to visit.

The revolution venues are also this year’s prestige vacation spots. From rock stars to royalty, jet setters have been imparting snob appeal with their presence in the capitals newly liberated from the Soviet yoke. Even the British royal family has broken with postwar practice, dispatching the Prince and Princess of Wales on a four-day tour of Hungary in May.

The region is not entirely ready for the influx. Hotel space is at a premium because the rush has overwhelmed even the most enterprising builders’ ability to create accommodations.

Budapest needs at least 18,000 more hotel rooms to meet demand, said Laszlo Horkai, owner of the 84-room Sas (Eagle) Hotel in the Buda Hills.

Complicated financing and the uncertainty of future tax rates have discouraged Hungarian and Czech entrepreneurs from plunging ahead with large-scale projects.

Ibusz has begun renovating barges and riverboats to open up new “waterfront” rooms on the Danube River. Several hotels are under construction, mostly in partnership with West German and Austrian firms, but they will not be ready for occupancy until two or three years from now.

Home owners with a room to spare in the capitals are cashing in on the tourism bonanza, accommodating visitors who can’t get into the big, Western-owned inns.

Austrians, Dutch, Scandinavians and Japanese arriving by train in the Hungarian capital are besieged on the platform by armies of housewives, offering bed and breakfast for as little as $5, and cabbies, offering transport to Balaton, 90 minutes to the west, for whatever they calculate that the customer can pay.

Hungary is hurrying to create spa hotels on the site of Soviet military bases that are being closed by a June, 1991, deadline. The nation’s first charter plane service, Danube Air, was inaugurated in July to shuttle visitors to the newly opened resorts in the east.

“After the Red Army leaves, we will have lots of regional airports in the country,” noted Ibusz’s Kudar. “This is very important for us because the bases were in the areas of thermal baths, which we can now develop for tourism.”

American Express Travel Related Services in London has encouraged cardholders to “see history in the making” by visiting Eastern Europe this year. But, referring to the hopelessly overwhelmed services in the region, the agency warns that travelers should approach the trips “with patience and a sense of adventure.”

Although Westerners are warmly welcomed, Hungary and Czechoslovakia are seeing a simultaneous boom in other visits that could spell disaster for their fragile economies, which are in the throes of transition.

Visitors from impoverished areas of Poland and the Balkans have been flocking to the more prosperous regions of Eastern Europe, not to loll on the beaches but to scour stores and markets for goods they can’t get at home.

“We have had an invasion of Romanians. But are they tourists?” asked Kudar. “They are here on shopping tours, which in the end will not benefit Hungary’s economy.”

Since border formalities were relaxed late last year, residents of other nations in the Soviet-led Comecon economic alliance have descended on Hungary and Czechoslovakia to buy up cheap food, electronics, housewares and liquor with the forints and crowns that they can easily acquire with their own soft currencies.

Some of the spoils are hauled back home for personal use. But East Bloc economists fear that much of it is being trucked to black markets that have been flourishing at the region’s most heavily traveled border crossings. The unsanctioned trade threatens to deplete the stocks of Hungarian and Czech stores.

The bloc’s big buyout is not restricted to Easterners, either.

Encouraged by the new tourist rate for cash at hard-currency exchanges, Austrians have been crossing into Czechoslovakia in droves to stock up on cheap commodities from Pilsener beer to state-subsidized hardware. And services such as haircuts, shoe repair and car washes cost only a fraction of the Western price.

State tourism authorities are also skeptical about the worth of certain attractions being offered to generate a new sex trade.

Laszlo Voros, who calls himself the porn king of Hungary, has applied for business licenses to open four bordellos in Budapest as part of his highly publicized goal of creating a “Bangkok on the Danube.” He already publishes an array of pornographic magazines and has made a fortune franchising within the bloc.

Parliamentary action to decriminalize prostitution is expected this fall, after which, Voros said, his new businesses can get started. He operates daily nude sunbathing cruises and a nudist camp at Balaton.

But, like other ventures aimed at the crowd now heading for the West, Voros’ boats are virtually empty, and his Balaton business is deeply in debt.