Upturn in the Budapest Hotel Market Likely to Continue

The performance of the hotel market in Central and Eastern Europe, and within that, Budapest, exceeded all preliminary analyst expectations in 2024. The sector's growth is likely to continue this year, with the number of international guest nights by the end of the year exceeding the previous record set in 2019, CBRE told MTI on Monday.

According to the regional analysis by the international commercial real estate advisor, the dynamic growth is supported by the revival of domestic demand and the gradual return of international travelers. While the number of inbound tourists increased by 2% in Europe and 8% in the East Central european region. The proportion of Western European and North American tourists is increasing, while the number of visitors from Asia and the Pacific region has declined.

They highlighted that inbound tourism in Budapest is particularly lively during weekends and holiday periods, with the pre-season and post-season becoming increasingly important.

The average occupancy rate of hotels in the capital reached 71% last year, the average daily room rate (ADR) rose to EUR 123, while revenue per available room (RevPar) exceeded the 2019 level by 22%, according to the report.

According to the announcement, the volume of hotel investments in Hungary increased by 15% in 2024. Budapest also played a significant role in the €417 million transaction value measured at the regional level, mainly in the form of sales of existing city hotels and further new developments.

Experts expect demand to continue to grow in Budapest, which is one of the region's leading tourist and investment destinations.

A significant part of Hungary's 60,000-room hotel capacity is concentrated in the capital, and the premium category is growing in importance. Four-star hotels account for more than 50% of the total, while the five-star offering is expanding mainly in downtown Budapest. Three-star hotels dominate in the rest of the country, but demand is gradually shifting towards higher categories at the regional level, and there is growing demand for accommodation suitable for longer stays, including apartment hotels, according to the report.

Currently, two dozen new hotel projects are in the preparation or construction phase, most of which involve the conversion of existing hotels or other types of properties. The emergence of high-quality hotel capacities not only contributes to the rise in average hotel prices, but also further increases the capital's tourist appeal, according to Balázs Csörget, senior hotel advisor at CBRE Hungary, quoted in the press release.