The impacts of COVID-19 have been felt far and wide across industries, and especially so for the travel and tourism industry. Cushman & Wakefield has published its Q3 Budapest Hospitality Marketbeat report.
Key findings:
- Total transaction volume in the first 9 months of 2020 reached €245 million, representing a 22.9% increase compared to the same period in 2019. 5 hotels have been transacted in 2020, although some deals were agreed on pre-COVID. Nonetheless, investor appetite for the Budapest hotel market has been relatively positive.
- There is no evidence so far of COVID-related yield change, however, some upward pressure is expected given the increased uncertainty and restricted access to financing. Nevertheless, the relatively high number of investors looking for opportunities and lack of assets on the market should prevent any major change.
- Budapest hotels saw a major RevPAR decline in the first 9 months of the year, down by 78% to €16. This was driven by a significant fall in occupancy to 20%. As COVID-19 concerns continue, uncertainty remains on the timing of the recovery. However, recent news of a potential vaccine may offer positive signals.
- Following the second wave of COVID-19, a number of hotels may once again choose to close temporarily until restrictions have been eased. Pipeline projects under construction are expected to see greater delays, while projects in the planning stage are likely to remain on hold in the near future.
- The current pandemic has notably impacted demand in the first half of 2020, as many countries imposed restrictions. While demand has shown positive signs of recovery in summer, the uncertainty remains with rising restrictions.
