The Hungarian hotel industry is booming

In the first quarter of 2025, the number of inbound tourists to Europe increased by 2% year-on-year. The Central and Eastern European region saw an even higher increase of 8%.

"Weekend and holiday demand is particularly strong in Budapest, and the increasingly popular pre- and post-season will also help balance visitor numbers in 2025. Our capital could reach or even exceed the 2019 level of visitation by the end of the year," said Gábor Borbély, Senior Director of Market Research for Central Europe and Hungary at CBRE.

According to a survey by CBRE, the proportion of people returning to Central and South-Eastern European regions varies depending on their country of origin. There has been a significant increase in visitor arrivals from Western European countries, particularly Germany, Austria and Italy, as well as from the UK and France. There has also been a notable rise in tourists from the United States as long-haul travel has resumed.

Another emerging trend is the growing number of visitors from the Gulf countries who are showing an increasing interest in premium, wellness-based accommodation. According to data from 2024, the largest increases in visitor numbers were seen for tourists from the US (+18%), Austria (+17%) and Spain (+14%). However, there was a decline in visitors from Northeast Asia (-43%) and the Asia-Pacific region (-33%), according to the research.

Growing demand, positive hotel indicators

In 2024, the average hotel occupancy in Budapest reached 71%, which is an increase of 4 percentage points compared to the previous year.

The average daily rate per room (ADR) in 2024 was around €123, while revenue per available room (RevPAR) increased by 22% compared to 2019.

"Budapest's hotel market had a strong year in 2024 and is set to grow further as demand continues to increase. New quality hotels are entering the market year on year, contributing to the increase in average hotel prices and further enhancing the capital's tourism attractiveness," added Balázs Csörget, Senior Hotel Consultant at CBRE Hungary.

The rise of the premium segment in Hungary

There are around 60,000 hotel rooms in Hungary, a significant proportion of which are in Budapest. The premium category is growing, with four-star hotels now accounting for over 50% of the total. Five-star hotels are mainly expanding in the centre of Budapest, particularly through the renovation of listed buildings.

While the rest of the country is dominated by three-star accommodation, demand is gradually shifting towards higher categories at a regional level. As travel patterns evolve, the demand for accommodation suitable for longer stays is growing. Consequently, the number of apartment hotels is expected to increase, particularly in Budapest.

Investment recovery - Hungary in the lead

Last year, the total hotel market in Hungary grew by 15% year-on-year. Of the €417 million worth of hotel transactions registered in the Central and Eastern European region, Budapest accounted for a significant proportion, primarily through the sale of existing city hotels and new developments.

"From an investor's point of view, Budapest stands out in the region thanks to its steadily growing demand, developed infrastructure and rising average prices. Currently, there are almost two dozen new hotel projects in the preparation or construction phase, the majority of which involve the conversion of existing hotels or other functional properties," the consultant stressed.

Bright outlook

Despite economic difficulties and geopolitical risks, tourism remains one of the main drivers of the Hungarian economy. This is evident from the steadily increasing passenger traffic at airports and ongoing hotel developments. Mixed-use developments, combining office and residential spaces with hotels, are also becoming increasingly common.

The hotel industry in Budapest is strong, as evidenced by the steadily growing demand and the ability to increase room rates and occupancy. These dynamics create favourable conditions for further market expansion, underlining the city's attractiveness as a prime destination for hotel investment,

summarised Balázs Csörget.

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