Based on an article from Portfolio, the largest European hybrid hotel network will come to Budapest this year, along with a Russian one as well. As a result, there will be three hybrid chains in the city’s low-budget sector.
In the second half of August, the largest European hotel chain will open its first Hungarian facility. A&O has converted a 108-room office block on Csengery Street into a 412-bed accommodation designed for low-budget travellers.
The service is a hybrid between a hotel and a hostel. It is near identical to Meiningler, which started operating in Budapest a couple of weeks ago. Both offer classic hotel rooms, family-friendly units and dormitories. Visitors can make use of kitchens, working areas and communal areas. Prices are similar to Airbnb, and it mainly targets students. However, more and more families and groups are making use of the arrangements they provide.
A&O opened its first unit in Berlin, which was swiftly followed by hotels in other big German cities. It subsequently expanded to Vienna, Graz, Prague and Amsterdam. Based on the latest statistics, it had 22,000 beds available on the market in 2016. The company’s directors have expressed their desire to open a minimum of two hotels a year. In 2019, they are opening hotels in Venice and Warsaw in addition to the one in Budapest.
Realising its potential, the American firm TPG Real Estate bought A&O in 2017. TPG Real Estate knows the Central European market very well; between 2015 and 2018, it was the owner of the real estate developer TriGranit.
The Russian firm Netizen has been trying to enter the Hungarian hybrid hotel market for the past two years. According to Portfolio, they tried to open their hotel on Rákoczi Street this spring. However, they have not been able to find the right staff to operate their unit. Based on information on their website, they want to open a 400-bed hostel, which offers classic hotel rooms as well.
Netizen hopes that Budapest will be the location of its first hybrid hotel in the European Union. They are also planning to operate units in other European cities; they are currently working on 10 different projects.
According to Péter Takács, a real estate consultant at Cresa, Budapest’s tourism industry is still not a saturated market, which is why so many hybrid hotels are planning to open their chains in the Hungarian capital.
Takács believes that in the next 3-5 years, the number of beds available will increase by 2000 to 5000. He does not rule out that in some of Hungary’s other major towns – namely, Debrecen, Szeged and maybe Pécs – units will open that will offer hostel, student accommodation and co-working area services. He also stated the advantages of opening hostels; they do not need many members of staff to operate, and the facilities offered are also very minimal – most young people are happy with a bed, basic hygiene services and Wi-Fi. Rooms are used efficiently by installing bunk beds, and the breakfast offered is very cheap to make. These hybrid hostels also offer cooking facilities.