Europe -  Budapest, Hungary

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Budapest is the capital of Hungary and the 15th largest city in the EU by population. The city traditionally had a strong industrial focus, but has since become a major centre for banking, finance, real estate and accountancy. The city is home to almost 400,000 companies, including the first foreign office of the China Investment Promotion Agency (CIPA) and the European Institute of Innovation and Technology (EIT). Major multinational firms with headquarters in the city include the Fortune 500 company Mol Hungarian Oil & Gas, OTB Bank Group, Magyar Telekom and many others.

Budapest is also a cultural and historic centre, which makes it very leisure oriented, with well-known monuments such as St Stephen’s Basilica, the Hungarian Parliament Building, Buda Castle, the Chain Bridge and the Opera House. As such, the city has gained international recognition as a ‘must-see’ destination in Europe, which translated into phenomenal performance for hotels in the most recent years following the recession in 2008/09.

The city has welcomed an ever-growing number of arrivals, both of transient passengers and cargo aircraft; this has been largely possible given the new routes now offered by many low-cost airlines travelling to Budapest. Overall arrivals increased at a compound annual growth rate of 7% between 2009 to 2019, or almost doubled in that period, reaching 4.6 million arrivals in 2019. The combination of hotel performance and airport arrival levels has meant Budapest has been outperforming regional competitors such as Vienna, Prague, Bratislava and Warsaw, in terms of growth in recent years.

Ever since its recovery from the 2009 downturn, however, Budapest’s hotel market has enjoyed constant year-on-year RevPAR growth at an almost double-figure compound annual rate in local currency (2010-19), with 2014 and 2015 standing out as particularly successful years. Like many other European cities, Budapest also experienced significant decline in arrivals and performance due to the COVID-19 pandemic, with hotels facing lengthy closures and Hungary’s borders remaining shut for tourism a significant time.

The pipeline for this market is large, with approximately 4,800 rooms due to enter the market in the next four years. Budapest will welcome several luxury brands including W Hotels Worldwide, with the 162-room W Budapest (currently under construction) expected to open its doors in mid-2022 after several delays. Making its debut sooner in mid 2021, however, will be the 133-room Hard Rock Hotel Budapest and the 130-room Matild Palace A Luxury Collection Hotel Budapest.

There was little Hotel transaction data in Budapest in 2020, with most notably the sale of the Sofitel Chain Bridge by Starwood Capital to Indotek (price undisclosed). The NH NY Palace and NH NY Residence were also sold as part of a European portfolio of eight hotels (allocated sales price per key of €410,000 for each hotel). Finally, the B&B Hotel Budapest also transacted for an undisclosed sum in December 2020.

Budapest hotel values decreased by 19.7% in euro terms and 2.6% in local currency in 2020, as reported in our 2021 European Hotel Valuation Index.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)