Budapest hotel market prepares for boom

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Four new hotels have opened in Hungary in the first half with a total of 590 new rooms, chiefly in and around Budapest, the latest survey of CBRE shows. Projects in the pipeline indicate the Budapest hotel room supply could grow considerably in coming years as investors and developers have confidence in domestic tourism.
Budapest hotel market prepares for boom
Despite the increase in the number of hotel rooms, guest nights decreased by 0.5% in the first half, primarily due to more moderate domestic tourism. However, revenues continued to grow and were 7.6% higher than a year earlier. The average daily rate rose 6% year on year to EUR 87.3 (HUF 28,400) as occupancy rates fell 0.8% to 74%, which is still second highest in the region after Prague.

Development projects currently in the pipeline could add another a further 1,400 rooms by the end of the year, while the total volume of rooms in projects under construction exceeds 3,000, with 85% of these in Budapest.

The first half of 2019 brought two hotel investment deals on the market as well as the acquisition of an office property that will be developed into a hotel. The combined amount of these investments came to EUR 102 million (HUF 33 billion). In the first quarter, FLE bought the 135-room Achat Premium Budapest, while WING acquired the conversion project Angyal Irodaház with the intention of turning it into a hotel. The second quarter saw one of the biggest local hotel deals in recent years as Indotek bought Hotel Gellért from Danubius Hotels.

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