A real fever of development can be felt on Budapest’s four- and five-star hotel market these days, as builders finish high-standard hotels one after the other. Now, a new type of product is added to the mix: The capital city’s first “boutique” hotel opened its doors last August and now there will be a new market player in 2007, offering unique rooms - only in very small proportions.
High standard hotels are opening in Budapest one after the other and with unprecedented speed. Developers seem to have faith in the growing demand for high category hotels in Budapest and want to take part in the process. It is not, by any chance, a surprise that investors focus on the most frequented downtown areas when it comes to buying property, as location is one of the most important factors in this market. Curiously enough, gargantuan projects, spanning hundreds of rooms, are rarely successful and scarcely anybody considers them these days. Medium-sized or rather larger hotels do appear on the market, but these are being built on really varying locations.
The newest Budapest hotel is without doubt, the Hotel Atrium, which has opened on 16 March. Located near Blaha Lujza Square, at the crossroads of Csokonai and Népszínház streets, the building has 57 rooms. The central theme of the interior design was uniqueness. The developers consciously wanted to avoid the usual brown-beige-aubergine decor that most hotels sport. With special and really vivid colors applied throughout various points of the building: Young and fresh colors dominate.
On one hand, you might say, the target group is the foreign corporate business community who clearly comes to Hungary with business purposes. On the other hand, it is also individual tourists interested in sightseeing, says Judit Blandl, the general manager of developer, Mellow Mood Invest Kft. She told Resource that they are also able to accommodate smaller groups. As for bookings, many questions yet remain open, as mid-March events may possibly influence the market. The influence of the October riots was felt in November and December and, what is more, those interested in Budapest and considering a visit even asked about the situation in the city at the international fairs in January. In the long run, a negative effect that hinders the tourism industry can result from a pejorative image of Budapest. Despite that, the developers of Hotel Atrium are optimistic and count on many visitors also coming to the Hungarian capital in the future. “It is not easy to forecast the booking rate of the hotel as of yet, but we would certainly be satisfied with 70 % in the first year,” stated Blandl. She believes there is a good chance of that, as the demand for high standard, well-equipped hotels on the market is clear. Of course, the results of a unit are always strongly influenced by the number and quality of competitors and it cannot be said, in advance, to how the new four- and five-star hotels finished in 2007 and 2008 will reshape the Budapest market. Some crucial questions for all hotels, in the period to come, therefore are: Will they be able to bring enough guests? Attract new visitors to Budapest? Or will they have to cut the cake into more, smaller slices? If they cannot succeed, many market participants will have to accept the fact that their hotels will only be half booked.
Blandl believes that there are already too many hotel projects under way in Budapest these days. According to her, it is hard to find an explanation as to why developers start so many projects at the same time but, by all means, it is undeniable that the number of quality Budapest hotels has increased spectacularly in the past two years.