Europe -  Budapest, Hungary

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Budapest is the capital of Hungary and the 14th 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.

Lately, 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. 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.

2017 was further boosted by the World Aquatics Championships and the Junior Swimming Championships, attracting some 485,000 spectators. Going forward, challenges similar to those of other CEE countries remain, including the shortage of qualified personnel. In Hungary, hoteliers are experiencing skyrocketing payroll expenses, but the pressure remains as emigration continues to dent the labour pool. This is likely to remain a serious drawback for hotels in Budapest, to balance the personnel needs associated with strong demand growth while protecting profit levels.

In 2009, Budapest’s hotel market struggled like many others given the widespread presence of a harsh economic setting, and staggering decreases in RevPAR, occupancy and average rate were therefore reported. Ever since its recovery, however, Budapest’s hotel market has enjoyed constant year-on-year RevPAR growth at an almost double-figure compound annual rate in local currency (2010-18), with 2014 and 2015 standing out as particularly successful years.

The pipeline for this market is large, with approximately 2,300 rooms due to enter the market in the next three 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-2020. Making its debut sooner in Q3 of 2019, however, will be the 133-room Hard Rock Hotel Budapest.

There was little Hotel transaction data in Budapest in 2018. In 2017, however, the Bosco Hotel Group was sold as part of a buyout, and in Q4 of the same year the Sofitel Budapest was sold. Other worthy transactions in Budapest’s luxury segment in recent years include the Le Méridien which was converted to a Ritz-Carlton, the Four Seasons and the InterContinental.

Budapest hotel values increased by 6.0% in euro terms and 9.3% in local currency in 2018, as reported in our 2019 European Hotel Valuation Index.

Change In Value For Market: (€Euro)

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)
Magali Castells
[email protected]
  • +44 20 7878-7710 (w)
  • +44 7 850205149 (m)