Posted: 10/29/2023 | October 29th, 2023

Budapest is one of the most fun — and most underrated — cities in Europe. While it’s become more popular in recent years, it still sees only a fraction of tourists compared to London or Paris (about 80% fewer, to be exact).

Popular with backpackers who come to enjoy the lively nightlife, it is also bursting with incredible historic sights, lots of cheap eats, and a plethora of relaxing thermal baths. There’s a ton to see and do, and it’s super affordable compared to Western Europe.

Since it actually comprises three cities (Buda, Pest, and Obuda), picking the right area to stay in is important. While Budapest isn’t massive, you’ll waste a lot of time in transit if you don’t pick the right area for your plans.

To help you save time and money, here’s my list of the best neighborhoods, so you know exactly where to stay in Budapest. These are the areas I stay in myself, because they are close to all the action, so you never have to travel far to get around.

Where to Stay for Sightseeing: Castle District (District I)

Located on the Buda side of town, this popular district is home to Buda Castle, Fisherman’s Bastion, and the towering Gellért Hill, which offers stunning views over the city. The famous Rudas and Gellért Baths (popular thermal spas) are also here. It’s a gorgeous area to stay in and leans upscale, with plenty of luxe accommodations and many fancy eateries. The photogenic Széchenyi Chain Bridge, which connects to District V, is nearby too.

Best places to stay in the Castle District:

• BUDGET: Hotel Orion Várkert – This is a small three-star hotel with simple but comfortable rooms featuring desks, electric kettles, and a small fridge. A simple but varied breakfast buffet is included, but what I loved most was the location. It’s right near the castle and the Danube, and just a short walk to all the major sights.
• MIDRANGE: Monastery Boutique Hotel – Located in a 300-year-old abbey, this modern four-star hotel boasts original exposed brick in many of its rooms. The beds are all large and comfy and the showers have good water pressure. There are desks and electric kettles in each room too. Breakfast is delicious, featuring fresh pastries, fruit, and yoghurt. The hotel is right near Fisherman’s Bastion and Castle Hill.
• LUXURY: Hotel Clark – This five-star property is for adults only. The rooms are huge and have multiple sections, featuring desks, flat-screen TVs, and plenty of outlets. The beds are comfy and plush and the showers have strong pressure. There’s a bar on-site with a chic, stylish atmosphere, and while the hotel’s location is perfect, I especially loved the breakfast (the chef will cook you eggs to order).

Where to Stay for Convenience: Parliament and Belváros Districts (District V)

This is the heart of the city, so if it’s your first time or you only have a few nights, stay here. You’ll be within walking distance of many of the top sights, including the massive Parliament building as well as St. Stephen’s Basilica. The photogenic chain bridge is nearby too, as is the massive Central Market. Just keep in mind that this district isn’t the cheapest. But if you want to splurge (a little or a lot), then it won’t disappoint!

Best places to stay in Parliament & Belváros:

• BUDGET: Central Market Hall Hostel – This chill, cozy hostel is right near the huge Central Market hall. The beds are comfy and have decent mattresses, privacy curtains, and individual outlets. I really liked the common area — it’s social while still feeling like you’re just hanging out at a friend’s house. There’s free tea and coffee too.
• MIDRANGE: Bohem Art Hotel – Staying here feels like you’re staying in an art gallery. The lobby has a retro feel to it and I loved the art in the lounge and rooms. The beds are comfy and the rooms have desks and plenty of outlets (as well as an electric kettle). The breakfast is great and has lots of options (including a freshly-squeezed orange juice) and the showers are super powerful too. It’s right near the river and the Váci utca pedestrian shopping street.
• LUXURY: Matild Palace – This luxe five-star hotel looks like a palace. The breakfast spread is amazing and has lots of options, and there’s a large gym with a sauna and multiple restaurants on-site. The rooms are super lavish and ornate, with stylish chairs and sofas, comfy beds with thick mattresses, and a large bathroom with beautiful tiles. You’ll feel like royalty staying here.

Where to Stay for a Local Vibe: Terézváros (District VI)

This budget-friendly area, located on the Pest side of town, is home to the most popular thermal bath, Széchenyi. There are many other tourist sites too, such as the Terror Museum and the Opera House. Andrássy Avenue, a UNESCO site meant to imitate the famous Champs-Élysées in Paris, is also here.

While there is plenty to see and do, the neighborhood is not crammed with hotels like other areas. That means you get a good mix of convenience (you can still walk downtown) while also experiencing a bit more of the local pace of life.

Best places to stay in Terézváros:

• BUDGET: Silver Hotel – This three-star hotel is right near the Andrássy Avenue shopping street. The rooms are basic but bright and airy, and the beds are comfy. There are plenty of outlets as well as desks in case you need to work. The tasty continental breakfast has a good variety of food but the real highlight is eating out on the balcony and enjoying the view over the city.
• MIDRANGE: Mirage Medic Hotel – The rooms here may feel a bit dated, but they’re clean, spacious, and the beds are comfortable. There’s a desk and electric kettle and the shower pressure is good too. There’s a simple free breakfast of bread, coffee, and cereals each morning too. The main draw, however, is how close this hotel is to Széchenyi, the most popular thermal spa in Budapest.
• LUXURY: W Budapest – I really liked the large and colorful rooms here. Each had a unique interior design, with different colors and styles, including hardwood and parquet floors. The bathrooms are huge and gorgeous, with beautiful tile and walk-in showers with perfect water pressure. The lounge has a retro chic atmosphere and since it just recently opened everything is fresh and new. There’s an indoor pool too.

Where to Stay for Food & Nightlife: Jewish Quarter (District VII)

The Dohány Street Synagogue is a must-see stop for anyone who visits Budapest. However, the main draw in this district is the nightlife. Specifically, the ruin bars.

Once underground party venues hidden away in abandoned buildings, they are now a massive part of the city’s thriving nightlife. The bars are unique and eclectic, unlike any other bar you’ve been to — a must for first-time visitors. The most popular (and coolest) bar, Szimpla Kert, and the massive Instant-Fogas Complex (a ruin bar and club) are both in this district.

The popular Karaván outdoor food market (right near Szimpla) is also here, offering a wide variety of amazing eats. And if you’re vegan, some of the best veg restaurants in town are nearby.

Best places to stay in the Jewish Quarter:

• BUDGET: Onefam – This social hostel is perfect for solo travelers as the staff organize all kinds of events, including free walking tours during the day and free communal dinners at night. The pod beds have thick mattresses and curtains for privacy, as well as individual reading lights. It’s the perfect mix of being social without being too wild. It’s also right near the Karaván Street Food Market and Szimpla Kert, the famous ruin bar.
• MIDRANGE: Vagabond Grand’Or – This modern apart-hotel features spacious rooms with balconies and kitchens, perfect for families or travelers who want to cook their own meals. There are sofas and flatscreen TVs, a dinner table if you want to eat in, and free Wi-Fi (with Netflix). The rooms have comfy beds and the overall design is stylish but minimal. There’s a simple continental breakfast offered each morning too (with vegan options).
• LUXURY: Anantara NY Palace – A lavish five-star hotel with an opulent interior and palatial lobby, the property has an indoor pool, sauna, steam bath, and large fitness center. I really loved the cocktail bar, which has live piano music and great drinks. The rooms are huge, with super comfy beds, desks and sofas, a minibar, and a flatscreen TV. The bathrooms are also huge, with beautiful tiles and massive bathtubs.

While there are lots of other districts to stay in Budapest, these are the neighborhoods most travelers spend all their time in — including myself. If you’re here to see the main sights, enjoy the nightlife, learn about the city’s past, and feast on its incredible cuisine, these are the best neighborhoods to focus on. They won’t disappoint!

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