Where to stay in Budapest: An insider’s guide to the city’s best neighborhoods

Best for: Nightlife, markets

Also referred as District VII or Erzsébetváros, this busy quarter behind the Great Synagogue is the nightlife hub and home of Budapest’s ruin bars. Streets around the pioneering Szimpla Kert and party-focused Instant-Fogas pack solid after dark, diners attracted to Mediterranean delights at Mazel Tov and Dobrumba. You're also close to the Time Out Market Budapest, just the other side of Rákóczi út.

As you wander, look out for murals illustrating local culture – Rubik’s Cube, revered Habsburg Empress Elisabeth – as well as sights related to the district’s dark past as the Jewish Ghetto. Walking tours are available for both. For a cool souvenir, head to Printa, imaginative and eco-friendly.

Stay here: While sleeping may not be your priority, you can recline in style at the Continental Hotel Budapest or book an en-suite room at the funky Maverick Budapest Soho.

Best for: Shopping, dining and sightseeing

For many years, District V or the Belváros (‘Inner City’) was all that foreigners saw of Budapest, shopping along pedestrianised Váci utca, sleeping and dining at higher-class hotels. North, between the tourist sights of the Basilica and Parliament, is still District V but officially Llpótváros, a business quarter and gastro hub containing Michelin-starred Borkonyha and Essência. Fashion brands line Deák Ferenc utca, though you’ll find edgier outfits at design-forward Nanushka. After dark, catch a band or DJ at Akvárium.

Stay here: While landmark lodgings such as the Kempinski, InterContinental and Marriott have long upped the ante in the dining and spa stakes, they face stiff competition from the Párisi Udvar, Gresham and Matild Palace, each a historic landmark overlooking a major bridge. 

Best for: Culture, dining and sightseeing

Considered a place to visit rather than stay, the cobbled streets at the top of Castle Hill offer prime panoramic views and, once the many tourists vanish after dark, tranquillity. Budapest's major sights are all on your doorstep – Matthias Church, the Fishermen’s Bastion and the former Royal Palace itself, home to the National Gallery – with several other more obscure attractions a short stroll away, including the Museum of Military History. Mini bus 16 regularly chugs up and down Castle Hill from focal Deák Ferenc tér and Széll Kálmán tér, connecting you with both sides of the river.

Stay here: Its walls incorporated into the remains of the medieval ones, the Hilton Budapest has long been the main luxury lodging in this lofty part of town. Recently, contemporary competition has been provided by the Baltazár Boutique Hotel and Pest-Buda Design Hotel, both attached to recommendable restaurants.

Best for: Culture, nightlife

The grandiose properties here once provided noblemen with a pied-à-terre in Budapest, away from their country estate but close to Parliament convening at the National Museum. But this is now the Palace District, which we named one of the world’s coolest neighbourhoods for 2024. Its name acknowledges its illustrious past but ignores decades of neglect and notoriety. Budapest’s influential alternative music venue, the Tilos, once thrived on Mikszáth Kálmán tér, a cobbled square now awash with terrace cafés, including its contemporary iteration, Tilos a Tilos. Arty types prefer to gather at both Lumens, and photography-focused Főfotó. By day, they browse for vinyl at Kalóz and shop for retro clothes at Typo Showroom. And soon the district will also be bookended by Time Out Market Budapest, opening later in 2025 at the Corvin Palace.

Stay here: Out-of-town artists, writers and film crew lodge at funky but discreet Brody House, now complemented by its Brody bistro.

Best for: Art, cafés, spas

The main artery running through Újbuda (‘New Buda’), Bartók Béla út, climbing up from the Gellért Hotel, is the reason for the newly found fashionable status of Buda’s District XI. Lining it are more than enough galleries to host the art-inspired Eleven festival twice a year, though you can always explore the Godot, the KAS and the B32, among others, at your leisure. Art also features at bars such as Kelet and Szatyor, whose adjoining Café Hadik honours its literary heritage with regular events. For relaxation, the Gellért Baths still operate despite the reconstruction of the adjoining hotel, while the Rudas spa is a tram stop away.

Stay here: Behind the Gellért, the affordable Kalmár Pánzió offers old-school hospitality.

Best for: Culture, dining, spas

The transformation of City Park into a cultural zone akin to its role model, Vienna’s MuseumsQuartier, has changed the nature of staying nearby. Don’t worry, you can still soak at the Széchenyi Baths, splash out at the legendary Gundel restaurant, and take in an exhibition at facing institutions, the Museum of Fine Arts and the Műcsarnok on Heroes’ Square – but now there’s much more to do here in District XIV. The House of Hungarian Music is not only a wonder of contemporary architecture but a prominent concert venue, and even if the exhibits at the Museum of Ethnography are somewhat niche, the revolutionary building offers prime rooftop views.

Stay here: Nearby Mamaison provides stylish stays on Budapest’s Champs-Elysées, Andrássy út.

Best for: Culture, sport, festivals

The third of the three districts whose merger created the city of Budapest in 1873, Óbuda (‘Old Buda’) is often overlooked after Buda and Pest. Served by the HÉV suburban train that runs from Batthyány tér and Margaret Bridge to Szentendre, District III may seem a trek but it’s a swift ten minutes from the main hubs of Buda immediately south. Activity is concentrated around the Római embankment, lined with eateries and the occasional destination bar – most notably, the Fellini Római Kultúrbisztró – close to where Roman centurions would have bathed 2,000 years ago. In more recent times, nearby Óbuda Island has hosted the Sziget Festival, the region’s largest annual music event. As well as the locally found Roman remains in the Aquincum Museum, there’s art a-plenty around the main square of Fő tér, including a gallery dedicated to Op-Art maestro Victor Vasarely.

Stay here: A recent change of ownership should see improvements at four-star spa hotel Verdi Budapest Aquincum, close to most cultural and recreational attractions.