Airbnb has been rapidly expanding in Budapest, but future growth is very much dependent on EU regulations and competition with Hungarian hotel companies.
As communicated by Forbes.hu, the number of guest nights spent in Budapest has risen to 1.8 million in 2018, which is a 25% increase. Airbnb has exceeded this growth, with the number of nights booked via the platform having risen by 70% since 2016. Indeed, by the end of 2018, Airbnb’s market share of guest nights spent in Budapest has reached 20%, which is one of the highest proportions in Europe.
This implies that the regulations imposed by Budapest authorities to control Airbnb expansion in the capital have not been effective just yet.
Unsurprisingly, the majority of bookings are made in the city, with Districts V, VI and VII accounting for 69% of guest nights spent in Budapest via Airbnb. The most popular area of Budapest is District VII, where 29% of reservations are made. Despite prices here being above the Budapest average, they did not increase in 2018.
The most popular form of accommodation in 2018 was a full apartment, with around half of the guests opting for this option. The average cost of a night in a full apartment and a room were €48 and €31 respectively.
60% of Airbnb hosts in 2018 had more than one property, which is higher than the 40-50% European average. This suggests that professional landlords dominate the Budapest market.
Despite the company’s rapid growth, Airbnb’s expansion is set to slow in the next two years. The domestic hotel market is becoming increasingly more competitive, with a range of Hungarian companies opening up hotels in the capital.
Authorities are also more involved with the regulation of Budapest’s Airbnb markets. Hosts may be charged a one-time registration fee of up to €4,500 per room. Since 2019 landlords also have to pay an annual property tax after subletting an accommodation.
European city authorities have been battling with Airbnb over the last few years. Airbnb subletting increases property values in popular areas, pricing out the local population. This has been the case in several European capitals, including London, Paris and Berlin. As we reported earlier this year, there is evidence of this happening in Budapest too.
Are you interested in visiting Budapest? Last week we put together a 24-hour travel itinerary for the Hungarian capital.