Inside Budapest’s pivot from backpacker haven to luxury destination

Grandiose architecture, epic views and cruises along the Danube River and soothing thermal baths: Budapest has no shortage of perennial draws. But Hungary’s capital has struggled to recoup tourism following the pandemic — not least because of the war in neighbouring Ukraine.

In 2022, while other European cities from Paris to Istanbul saw tourism approximate or exceed pre-Covid levels, Budapest lagged behind, receiving just 75 per cent of its record 4 million visitors from 2019.

Things are looking up, though, as the city reaches the culmination of a five-year investment program in tourism and infrastructure that began in 2017 — revitalising everything from museums to public parks and spurring the development of ambitious new hotels, bars and restaurants. It comes just in time for the 150-year anniversary of the unification of Buda, Pest and Obuda—the three cities that came together to create a single modern metropolis.

It hasn’t been without controversy. The scope of the public works has been so tremendous that an estimate puts the entire project’s budget north of half a billion euro. And with Prime Minister Viktor Orban’s family investing heavily in luxury hotels and restaurants, there’s been public outcry about how all that government spending is potentially self-serving. But for tourism the payoff will be huge. Whereas the city has typically been known as a value destination and a haven for backpackers, Budapest is now primed to draw luxury travellers, particularly those in search of arts, culture, and culinary experiences.

That’s by design, says Csaba Faix, chief executive officer of Budapest Brand, the city’s tourism board. In 2019, he says, the city began pulling back from advertising that positioned it as a value destination, showing a sleeker image rather than one of crowded streets with bar-hopping stag partiers.

“Budapest was on the brink of overtourism, and it is again on the brink of overtourism,” says Faix, noting that the city is projected to reach its 2019 visitor levels in 2023. “We understood that if we want to avoid being the next Barcelona or Amsterdam, then we need to react.” One way to do so, he says, is to encourage travellers to explore neighbourhoods beyond the city centre and to stay for several days rather than on an hourslong river cruise excursion. Diversifying the bar and restaurant scene — as well as promoting the charms of the Hungarian countryside just beyond the urban limits — helps with that.

Two significant challenges remain. First is the lack of direct flight access from countries like the US, Budapest’s most important long-haul market; those routes have yet to restart since the pandemic. Then there are the politics: namely the government’s strict anti-gay stance, which makes some travellers feel more comfortable visiting Vienna or Berlin instead. As of this year, for instance, the government is forcing bookstores to wrap books containing LGBTQ content in plastic so that they can’t be opened.

“I think Budapest gets in its own way just because of its political situation and its leader,” says Gwen Kozlowski, president of Florida-based luxury tour operator Exeter International. She says that when news flares of the government’s conservative stances, it causes travellers to bristle — if not completely reconsider their plans.

Government figures agree. “We receive more and more questions mainly from the LGBTQ community whether it is safe to come to the city or if they should be aware of anything from the government,” says Faix. “It’s no secret, at least in Europe, that the Hungarian government and the leadership of the city are not on the same side —Budapest is definitely a safe place even for LGBTQ people.”

With that considered, the Queen of the Danube has never felt more luxurious. Here’s what to prioritise.

New Museums

The number of just-opened or remodelled cultural institutions — almost all of them flanking the city’s central park, Varosliget — creates nothing short of a new museum district.

And the park itself, which locals dub Liget, has also been part of Budapest’s master-planned face-lift: Formerly somewhat rundown, it’s now a beautiful manicured green space with its own birding trail, a 13,000-square-metre playground for kids and the option to take hot-air balloon rides over a changing city centre. The park’s renovation, once met with scepticism from locals with environmental concerns, is now widely embraced as a real draw for tourists and residents alike.

The Museum of Ethnography, at the park’s entrance, has a collection that ranges from folkloric children’s toys and musical instruments — plus early 20th century phonograph recordings — to special exhibits on Korean fashion.

Through June 2024 a contemporary photography show will feature images of Amazonian tribeswoman taken by the Hungarian artist Claudia Andujar. The €103 million, 700-square-metre building housing it all, designed by Hungarian firm Napur Architect, has a 7,000-square-meter rooftop garden — a great spot to look out over the park and Heroes’ Square.

Roughly a 15-minute walk away is the House of Music, which celebrates Hungarian composer such as Bela Bartok and Gyorgy Ligeti and hosts a popular weekly series of concerts and musical events.

It’s been called one of the world’s most innovative buildings, for its futuristic structure by Japanese architect Sou Fujimoto that somewhat resembles the inside of a hornet’s nest. “I don’t get people coming to me saying, ‘I’m dying to learn more about Béla Bartók,’” says Exeter International’s Kozlowski, in reference to the new museum. “But people love really amazing architecture, and that has been a surprise for a lot of our guests.”

New Luxury Hotels

A central Europe travel specialist, Kozlowski has visited Hungary every year since 2002. She recalls a time when the only luxury hotel available in Budapest was the somewhat-corporate Kempinski Hotel Corvinus. A few posh options have opened since then, but never so many at once. Take Matild Palace, a Marriott Luxury Collection hotel.

It opened in 2021 in a Belle Epoque building where the social elite would gather to exchange ideas in the early 20th century; now it has 111 rooms and 19 suites that ooze old-world charm, with art in gilded frames, gold accents, floor-to-ceiling mirrors and casement windows facing the Danube. (Next year an even higher-end St. Regis will open across the street in an identical building.)

Also new in town is W Budapest, which opened in July in a neo-Renaissance building called the Drechsler Palace that used to house the Hungarian State Ballet Academy. It has suites inspired by Swan Lake, designed in all black or all white, plus 151 jewel-toned rooms that evoke the style of famed Hungarian actress Zsa Zsa Gabor.

For those planning a visit over the winter holidays, the best bet may be the Dorothea Hotel, Autograph Collection, which is taking reservations for Dec. 17 and beyond. It’s right on the upscale Vorosmarty Square, where you’ll find the historic coffee and pastry shop Gerbeaud and one of the city’s most popular Christmas markets. Besides the covetable location, the property has a glassed-in winter garden and heritage rooms with four-poster beds, velvet couches and period paintings.

All three of these hotels have rates that hover around €280 per night — indicating that Budapest’s relative value still persists even as its offerings have become much higher-end.

Also worth noting is that the Dorothea is among the luxury properties that have ownership ties to Orban’s family; the trusted website Hotel Oligarch can help identify others if you’re concerned about where to direct your tourism dollars.

Other Things to See and Do

Even the most familiar landmarks in Budapest are worth a visit — or revisit — thanks to recent investments that have given them new lustre. The 19th century Szechenyi Chain Bridge, a key landmark in the city center linking Buda and Pest, reopened in August 2023 after almost two and a half years of maintenance. Now it’s off-limits to cars—except for taxis and buses—which makes it more pedestrian-friendly.

The city’s three Christmas fairs will be open from Nov. 17 through Jan. 1: Find them at St. Stephen's Basilica, Vorosmarty Square and inside the Castle District. Whereas other cities have skating rinks, Budapest has a skating “corridor,” which looks more like a flat bobsled track — it opens on December 1 on Csepel Island, a less visited area just south of the downtown core. And while you’re in the holiday spirit, buy tickets to Lumina Park, an outdoor light show that celebrates the city’s 150 years of unification; it runs through March 3 on Margaret Island, which is commonly visited for its Palatinus Strand Baths.

Of course, you’ll need to eat. Besides welcoming its first edition of the Michelin Guide in 2022, the city has a growing number of restaurants taking diners beyond the traditional goulash or goose liver.

An hour northwest of Budapest in lakeside Tata, chef Istvan Pesti serves up elaborate degustations at the two-starred Platán. You can reserve one of four tables inside the kitchen to watch the chefs creating consommés in siphons or plating foie gras torchons with rings of violet flowers.

Run by Portuguese chef-owner Tiago and his Hungarian wife, Eva, Essência offers a tasting menu combining both cultures. For each course you can choose a more Hungarian option, such as deer saddle dumplings, or a more Portuguese one, like a fanciful riff on caldeirada fish stew. Umo has a similar fusion of disparate cultures on its menu; its farm-to-table plates blend South American and Asian influences.

None of this would be complete without partaking in the city’s famed bar culture, which has similarly evolved from the charmingly dilapidated venues known as “ruin pubs” to swish rooftop lounges including High Note SkyBar, 360Bar or Leo Rooftop Bar at Hotel Clark. Don’t worry: The ruin pubs are still sloshing beers for crowds of locals and partygoers — and, even for luxury travellers, these emblems of Budapest culture are still worth a visit.