The ban on short-term rentals in central Budapest is beginning to take its toll. With tourists staying away, restaurants and cafés in Terézváros (6th District) are struggling to survive. An industry association is already warning of a wave of bankruptcies.
Since January 1, 2026, a ban on short-term rentals via platforms such as Airbnb has been in effect in the 6th District of the Hungarian capital. The economic consequences for the local hospitality industry are clear. As turizmus.com reports, citing a statement from the Hungarian Hospitality Association (MVI),
restaurateurs in the district recorded a drastic drop in revenue averaging 30% in the first half of the year.
As the industry representatives see it, the administrative crackdown on mass tourism in the residential sector has virtually wiped out high-spending demand in the 6th District. The number of domestic and foreign tourists has plummeted noticeably, leading to deserted streets and a shortage of guests in the otherwise lively neighborhoods. Many businesses are now facing a crisis that threatens their very existence.
What is particularly bitter for the owners is that while policymakers have drastically decimated their customer base, they have made no concessions whatsoever on the cost side. Despite the sharp drop in revenue, businesses must continue to generate the full amount of high municipal taxes—namely, business and property taxes. Morale among local business owners is at an all-time low.
Nearly a third of our revenue has vanished, but our bills and district taxes have not dropped by 30%.
We are expected to generate the same amount of property and business taxes, even though their ordinance has driven away the very guests we depended on for our livelihood. This decision, in its current form, is not only ill-conceived but also unfair,” said one affected restaurant owner, summarizing the situation.
In response to the flood of complaints, the MVI has sent an official letter to the mayor of Terézváros. The association is calling on policymakers to assess the economic impact of the restrictions and to consider tax relief measures for the affected businesses. If no concessions are made, the 6th District faces bleak times ahead. The association warns of widespread business closures, the loss of numerous jobs, and the permanent decline of the previously vibrant cultural and culinary scene in the heart of the Hungarian capital.
Despite the alarming signals from Terézváros, a citywide trend is emerging in Budapest. Other districts are also planning drastic cuts without waiting to see the economic consequences:
8th District (Józsefváros): Starting January 1, 2027, existing Airbnb licenses are set to expire, and no new permits will be issued. An analysis of a public survey conducted in May showed a majority in favor of the stricter measures; approval by the district council is expected by the end of June.
7th District (Erzsébetváros) and 1st District (Castle District): Here, too, local authorities are preparing restrictive measures that could follow the example of the 6th District.
While the bans are intended to solve the housing problem for locals, the tourism and hospitality industries in central Budapest face the threat of lasting structural damage.
Via turizmus.com; Featured image: Pexels
