Upscale hotels see above-average growth in first half

In the first half of 2011, the number of foreign guests and guest nights spent in Budapest grew by 10% and 8% respectively, compared to the same period of 2010 partially due to that Hungary held the rotating presidency of the EU. Growth of 12–14% was recorded by four-star hotels. The second half of the year will be indicative of whether the rate of growth will decrease and if so, to what extent.

“Hotels continued to perform above average, with the number of guest nights rising by 7%. Four-star hotels performed particularly well, with growth exceeding 11%,” said Norbert Szircsák, researcher and valuation consultant at the real estate advisory firm.

Average occupancy at hotels was 43%, within which five-star hotels recorded the highest level, at 61%, followed by four-star units at 49%. Total revenues of accommodation establishments increased by 6% at current prices, from the same period of 2010. Average room rates at three-to-five-star hotels in Budapest were between HUF 9,000 and HUF 31,000 in the January–June period.

The number of tourist nights spent by foreign and domestic tourists at Lake Balaton decreased by 2.3%. The second half of the year may bring an increase, although this will be largely dependent on the weather, the turnover in holiday vouchers and on how widespread the use of the newly introduced Széchenyi Leisure Card will be.

“We expect the latter to be more likely to have a beneficial effect on turnover in 2012,” the Colliers report notes.