In the first quarter of this year, the number of inbound tourists in Europe increased by 2 percent year-over-year, while the Central and Eastern European (CEE) region experienced growth of 8 percent.
“In Budapest, weekend and holiday demand is particularly strong, and the increasingly popular pre-season and post-season will also contribute to balancing visitor numbers in 2025. Our capital could reach or even exceed the 2019 visitor level by the end of the year,” Gábor Borbély, CBRE’s chief market analyst for Central Europe and Hungary, told Portfolio.
The CBRE survey found that the largest increases in 2024 were seen in tourists from the U.S. (+18 percent), Austria (+17 percent), and Spain (+14 percent), but there were decreases in visitors from North-East Asia (-43 percent) and the Asia-Pacific region (-33 percent).
Meanwhile, the proportion of visitors returning to the Central and South-Eastern European regions varies depending on the country of origin. Visitors from Western European countries, especially Germany, Austria, and Italy, have increased significantly, as have those from the U.K. and France. The notable increase in tourists from the U.S. is seen as a result of long-haul travel resuming post-Covid.
Another emerging trend is the increase in visitors from the Gulf countries, who are increasingly interested in premium and wellness-based accommodation.
The average hotel occupancy in Budapest reached 71 percent in 2024, an increase of 4 percentage points compared to the previous year. The ADR (daily room rate) in 2024 was already around 123 euros on average, while RevPAR (revenue per available room) increased by 22 percent compared to 2019.
“Budapest’s hotel market had a strong year in 2024 and faces new growth opportunities as demand continues to pick up. New, quality hotels appear on the market every year, which not only contribute to the increase in average hotel prices, but also further increase the tourist appeal of the capital,” added Balázs Csörget, CBRE Hungary’s leading hotel consultant.
The total hotel capacity in Hungary amounts to around 60,000 rooms, a significant part of which is concentrated in Budapest, with the premium category gaining importance: the proportion of four-star hotels now exceeds 50 percent, and the five-star offer is expanding most in the city center of Budapest, especially in the form of the conversion of historic buildings.
In the rest of the country, the three-star offer is dominant, but demand is gradually shifting towards higher categories as well. Visitors are looking more for longer stays, meaning apartment hotels are expected to continue to expand, especially in Budapest.
Last year, the investment volume in the entire Hungarian hotel market increased by 15 percent year-over-year. Budapest also took a significant share of the €417 million worth of hotel transactions registered in the CEE region, mainly in the form of sales of existing city hotels and further new developments.
“From an investor perspective, Budapest stands out in the region, characterized by constantly growing demand, developed infrastructure, and rising average prices. Currently, nearly two dozen new hotel projects are in the preparation or construction phase, most of which will be realized by transforming existing hotels or properties with other functions,” Csörget emphasized.
Despite economic difficulties and geopolitical risks, the tourism sector remains one of the driving forces of the Hungarian economy, as evidenced by the continuously growing airport passenger traffic and the ongoing hotel developments. Mixed-function real estate developments, where a hotel function is also included in addition to office or apartment development, are also becoming more common.
“Budapest’s hotel industry has strong fundamentals, supported by continuously growing demand and room rates, as well as the ability to increase occupancy. These dynamics create favorable conditions for further market expansion and underline the city’s attractiveness as a prime destination for hotel investments,” CBRE’s hotel consultant concluded.
