A few new hotels such as the Buda Castle Fashion Hotel and Promenade City Hotel opened late in 2008, while more hotels are being built as of this writing. The Mercure Hotel Budapest Nemzeti is closed for remodeling and rebranding, and (at the time of writing) will not reopen until spring 2010 as a Mercure MGallery Hotel. The most distinctive of the Budapest hotels include the historic Gresham Palace Four Seasons, Corinthia Grand Hotel Royal, and Castle Hill's Hilton Hotel, being among the city's most elite lodgings.

Lodging rates in Budapest have risen considerably, becoming more comparable to the rates of other European capitals. With that said, hotel occupancy has been decreasing over the last few years and dramatically in 2009. Reports have shown that many hotels are fewer than 50% occupancy during some peak periods, so deals can be had if you are a savvy Internet bargain hunter. After doing your research, compare the rates you have found with the hotel's website to look for specials. Don't stop until you try e-mailing the hotel directly to see if there are any unadvertised specials or discounts they are willing to offer.

In the past, during the high season from April or May to the end of September, it was difficult to get your first choice of a room in your first choice of hotel, but this has eased over the last few years. However, if you wait for the last minute to book, it could still hold true. During the Hungarian Formula One weekend or the Sziget Festival (both in August), it can be quite difficult to secure a hotel or pension room or even a hostel bed, so make reservations and get written confirmation well in advance of your stay.

Buda Hills -- Unless you have some special reason to want to stay in the Buda Hills, be aware that you will be using precious time to travel to the Pest side where the lion's share of sights are located. These accommodations are good, but they take two transport connections to reach the center of Pest.

Budget Lodgings -- There are a number of recommendable budget accommodations in Budapest. Travelers have the advantage of choosing from a wealth of perfectly acceptable options. Small pensions sometimes called panzios, self-catering apartments, and a number of good youth hostels make the city inviting to travelers on any budget. Remember the realtor phrase: location, location, location. The location of your accommodations is a significant factor in cost. Normally, one can expect to pay more for the location, the history, and the reputation of a place; being in the center of the city will inflate the cost. Note that with construction of the new metro 4 line, transportation services on the Buda side are continually in flux. This can make it difficult to get to and from your hotel. Returning late in the evening to some parts of the city can be trickier than in the past. Question the transportation options carefully. There is nothing worse than having to end a pleasant evening early just to catch the last transport back to your hotel. Remember, time is precious and you don't want to spend too much of it on public transport.

Accommodations Agencies -- I generally hesitate recommending a private accommodation for most people, because of potential language barriers. Hungarian is so different a language that travelers may feel isolated if they book with non-English-speaking families. However, if you are feeling brave and want to try this option, the most-established accommodations agency is the former state-owned travel agent Ibusz. The main Ibusz reservations office is at Ferenciek tere 10 (tel. 1/501-4911; fax 1/501-4915; www.ibusz.hu), accessible by the Blue metro line. This office is open year-round Monday through Friday 9am to 6pm.

Seasons -- Many, but not all hotels and pensions in Budapest, divide the year into three seasons. High season is roughly from March or April through September or October. Easter week and the period of the Budapest Spring Festival (mid- to late March) are also considered high season by some hotels. Special season includes the weekend of the Hungarian Formula One in August, and New Year's Eve. A few places consider Easter part of this season also, but it seems fewer than in the past. Low season is roughly November through February, with the exceptions above. Some hotels discount as much as 30% in low season, while others offer no specified winter discounts, yet with occupancy rates at an incredible low they do sneak in web specials, so be sure to inquire.

Price Categories -- The majority of hotels and pensions in Budapest list their prices in euros, so the rates are listed in this guide as the hotel designates. Listing rates in euros is not just intended as a means of transition to the E.U. currency (Hungary is not expected to join the euro zone until 2012 at the earliest and most likely later), it is also a hedge against forint inflation (though the forint has had significant highs and lows over the past few years). All hotels in Budapest accept payment in Hungarian forints as well as in foreign currencies, but their rates will be much more to their advantage than yours. If paying with a currency other than Hungarian forints or euros, exchange your currency on the street at authorized booths and then pay the hotel. Exchange rates fluctuate daily, of course, so the price of a room in euro-to-forint and other currencies will change accordingly.

All hotels are required to charge a whopping 18% value-added tax (VAT), an increase instituted in July 2009. Most build the tax into their rates, while a few tack it on top of their rates. When booking a room, ask whether the VAT is included in the quoted price. Unless otherwise indicated, prices in this guide include the VAT.

Hotels in Hungary are rated by the international five-star system. In our view, however, the ratings are somewhat arbitrary and are not included in our entries for that reason. You can find an explanation of the Frommer's star ratings used throughout this guide in the front matter.

Note: I have discovered that just about every accommodation has some Internet specials or packages on its website. Just like the airlines, hotels continually gauge their occupancy and change rates according to room availability; but they all say that the early bird gets the biggest discount. Unless noted otherwise, the hotels listed have Internet deals, so check their website. Once you have booked, confirm the rate and the room desired by getting a confirmation number.

I have found that smaller hotel and pension websites are not frequently updated with respect to rates. If they don't have online booking capabilities, make sure to call or e-mail them to confirm rates. If you can book online, the rates should be current and accurate.

Alternatives to Hotels

Let me first state that not all hostels are created equal and should not be considered for young party people only. There are alternatives out there and I have listed a couple of good ones. There is intense competition in Budapest between the leading youth hostel companies and various privately run hostels since there are more than 85 hostels in the city.

Representatives from the Budapest Tourinform office sometimes board inbound trains early to pass out tour information and maps. In the past, international trains arriving in Budapest were also assaulted with people trying to book backpackers into their property. Some representatives even boarded Budapest-bound international trains at the Hungarian border crossing so that they could work the backpacking crowd before the train reached Budapest. This is not as common as it once was, but your best bet is to book a bed in advance at one of the recommended hostels. Otherwise you can check with the booking agency at the train stations or airport for assistance once you arrive. You can try your luck with a hostel hawker, but for your own safety, it is wise not to. Shop around and don't let yourself be pressured. If they are pushing you, you have to wonder why they need to do so. Most hostels that solicit at the station have a van parked outside. The ride to the hostel is usually free, but you may have to wait a while until the van is full.

Mellow Mood Ltd. operates a youth hostel placement office for their own hostels at Keleti Station (tel. 1/343-0748), near the Baross Restaurant. This office is open daily 7am to 9pm. For other hostels, check out the website www.hostelworld.com for other offerings in the city.

In July and August a number of university dormitories and other empty student lodgings are converted into hostels. Their locations (as well as their condition) change from year to year, so we haven't reviewed any of them in this guide. The youth hostels and budget lodgings listed below are all open year-round. All hostel rates are per person, not per room.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.