Hungary, and the region in general, is again seen as an increasingly attractive tourism and business destination. Guest nights have been on an upward trajectory; however, they are still below pre-pandemic levels, with the market negatively impacted by broader geopolitical, economic and financial concerns around demand, and rising development, labor and operational costs.
The first four months of the year have been promising; guest nights and occupancy have increased compared to previous years but have not reached pre-COVID levels, but average room rate increases have compensated, and revenues are looking good. Profitability is still behind, though, due to increased cost levels,” says Péter Takács, a partner at Newmark VLK Hungary.
“Everyone is watching the luxury sector because this is where there is significant new supply coming in: St. Regis (ex-Buddha Bar), W (the former Ballet Institute), Autograph Collection, Sofitel (under refurbishment), and the Gellért should start renovation soon. Budapest and these properties need to attract a significant volume cf upscale travellers for these investors to make a good return,” comments Takács.
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