As a result of rising visitor demand, there is a significant hotel development pipeline in Budapest, with international brands entering what is considered an attractive tourism market.
Several high-end hotel redevelopment and renovation projects are underway in the historic center of Budapest, while the mid- to high-level strata are also attracting developers and leading hotel brands.
With many current visitors on short-stay breaks via budget airlines from European cities, Budapest is looking to attract more high-end, longer-staying tourists and is hoping for the development of large congress facilities to attract conference participants. City authorities are also striving to improve the transportation infrastructure, with a direct express rail link from the airport to the city center seen as a priority.
Budapest, like Prague, needs to work on three things: give reasons for existing travelers to stay longer, attract the upper end of the travel market, and tap into the congress and convention travel business, says Péter Takács, a partner and hospitality expert at Newmark VLK Hungary.
“We expect continued strengthening across the hotel market over the next year, supported by further growth in inbound tourism, alongside increases in both ADR [average daily rate] and RevPAR [revenue per available room] performance indicators. The strategic question then becomes operational structure: whether to pursue owner-operation models or lease arrangements with professional operators. We continue to see successful examples of both approaches in the Hungarian market,” comments Mihály Schrancz, CEO and founding partner at investment fund manager Realis WAM.
Cushman & Wakefield has traced rising RevPAR rates, primarily driven by higher occupancy in 2025. Reflecting this robust demand, the pipeline in the Budapest hotel market remains strong. For the period from 2026 to 2029, CBRE has identified 3,000 rooms under construction. A further 2,000 are at the planning stage. However, in the countryside, the pipeline is weaker and appears to be shrinking, with around 1,000 rooms at the planning stage and expected to be completed by 2028.
“It is particularly interesting to observe the performance of five-star hotels. Although these assets have been delivered to exceptionally high architectural and interior design standards, achieving sustainable profitability has proven more challenging than initially expected,” says Schrancz.
“Nevertheless, these projects contribute significantly to the overall quality and international image of the city, and I remain confident that they will ultimately establish their position within the market,” he adds.
Between 2025 and 2027, more than 60% of Budapest’s new hotel supply will come from the Upper Upscale (653 rooms) and Upscale (466 rooms) segments, signaling a clear shift toward higher-end offerings. This aligns with the growing presence of international hotel companies and brands, such as Radisson Hotel Group, Accor S.A., InterContinental Hotels Group PLC, Puro Hotels and Mamaison Hotels & Residences, according to the hospitality consulting firm Horwath HTL.
The CEE hotel investment market saw a 170% growth in volume for 2025, according to Cushman & Wakefield. This was primarily driven by heightened activity in the Czech Republic and Hungary. Most transactions in the region involved Upper Upscale assets, followed by Upscale properties. This is expected to continue with several deals in the disposition process.
Despite wider European headwinds, Budapest’s hotel market shows strong resilience and a clear strategic direction. The concentration of Upper Upscale and Upscale projects reflects rising investor confidence and a deliberate shift toward higher-value tourism. Continued infrastructure upgrades, notably airport expansion, and focused tourism strategies are expected to reinforce this premium repositioning and attract a more affluent, experience-driven traveler base, argues Attila Radvánszki, director of Horwath HTL Hungary.
A notable trend in Budapest and its regional peer, Prague, cities with several UNESCO-protected locations, is the renovation and redevelopment of heritage buildings, giving them new use value while also preserving the classic feel of the cities’ historic centers.
The best-performing hotels are in these interesting, historic buildings, the redevelopment of which offers a unique branding opportunity and capitalizes on Budapest’s rich cultural heritage, appealing to all levels of tourism demand, says Takács.
“However, such projects often face regulatory hurdles and higher renovation costs due to preservation requirements. A new building is just more efficient; on the other hand, empty plots and buildings in good locations that can be demolished are hard to find. That is why there is an obligation to convert or renovate; therefore, we will see more conversions. […] Given that tourism primarily occurs in the city center, the only viable option for the future will be to convert older, historical buildings,” the Newmark VLK Hungary partner predicts.
In one such notable hotel redevelopment project, investment firm Equilor Befektetési Zrt. (controlled by the BDPST, owned by István Tiborcz, the son-in-law of the former Prime Minister Viktor Orbán) acquired the Sofitel Budapest Chain Bridge hotel overlooking the Danube on the Pest side of the river. It is currently redeveloping the building to re-launch it as Accor’s luxury lifestyle brand, SO/. The complex will consist of 350 rooms, 56 suites, a spa, fitness, and wellness area, and an events area. It is scheduled to reopen this year.
In another heritage redevelopment, this time of a former office building, the Forestay Group, in a strategic partnership with Recorde Asset Management, purchased Váci utca 81 for redevelopment into the 283-key Moxy Budapest Downtown upper-midscale hotel and apartment hotel. The developer is targeting BREEAM “Excellent” accreditation, the first such high-sustainability hotel accreditation in Hungary, according to Forestay Group.
“The best any government can do is to intervene and regulate as little as possible and let the market work its way,” concludes Takács. “Governments should focus on large-scale developments that make an entire destination attractive and generate macro demand: build a congress center, support the introduction of transatlantic flights, integrate an express airport train shuttle to the main public transport network, etc.,” he argues.
“The only things holding development back are the unpredictability of construction costs and the lack of end investors who are eager to buy newly built hotels with lease or management agreements,” he adds.
Work has already begun on the third terminal at Budapest Airport. The operator now refers to the project as Terminal+ to reflect that the development is not just a standalone terminal but a comprehensive expansion and reconfiguration of the existing complex.
The scheme includes a new central terminal hall built in front of the current Terminals 2A and 2B, expansion of Terminal 2A with a new “L”-shaped pier, modernization of existing passenger processing areas, expanded security screening and baggage handling, and associated apron and landside infrastructure.
The foundation stone for the new terminal complex was officially laid on Feb. 20, this year, in what will be a HUF 1 billion project. The first elements of the third terminal are expected to open in 2033, according to Budapest Airport.
This article was first published in the Budapest Business Journal print issue of July 3, 2026.
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