The Ritz-Carlton Budapest has been rebranded, and I just don’t see this ending well based on what has been revealed so far (assuming the goal is to make money, or lose as little money as possible)…
In this post:
Al Habtoor Palace Budapest replaces Ritz-Carlton
As of January 6, 2025, the Ritz-Carlton Budapest has been rebranded as Al Habtoor Palace Budapest. Rather bizarrely, as of now the property continues to be bookable through Marriott channels as a Ritz-Carlton, even though that branding no longer applies, and Marriott is no longer managing the property.
For those with cash stays booked at the hotel, reservations will be honored, though don’t expect to be able to earn points, or take advantage of elite perks. Those who redeemed points for a stay will be moved to another Marriott Bonvoy property in the city.
For context, the 200-key property has been branded as a Ritz-Carlton since 2016. From 2000 to 2016, it was branded as a Le Meridien. The property has a ton of history, as it dates back all the way to 1914, and is housed in the historic Adria Palace.
For those curious about the Al Habtoor Palace branding, the property is owned by Emirati investment firm Al Habtoor Group, and rather than branding the property in partnership with a major hotel group, it’s just acquiring the standard Al Habtoor branding.
Al Habtoor Group also owns the InterContinental Budapest. The company also controls Al Habtoor City in Dubai, which initially opened in 2014 under Marriott’s St. Regis, W, and Westin branding, before being rebranded in partnership with Hilton several years later. Then in 2024, Al Habtoor Palace Dubai went fully independent.
Here’s how Khalaf Ahmad Al Habtoor, Founding Chairman of Al Habtoor Group, describes this development:
“The introduction of Al Habtoor Palace in Budapest reflects our vision to expand our homegrown luxury brand to Europe. Nestled within the historic Adria Palace, Al Habtoor Palace represents the pinnacle of hospitality while offering an unforgettable experience in one of Europe’s most vibrant cities. This marks the global debut of our ultra-luxury Al Habtoor Palace brand from Hungary, the jewel of Central Europe, and a significant milestone for our Group.”
Will this hotel really maintain independent branding?
I’ve gotta say, this is one of the more perplexing hotel rebrandings that I’ve seen in quite some time. Presumably Al Habtoor Group wasn’t pleased with the performance of the Ritz-Carlton — after all, that’s the primary reason hotel owners choose to rebrand their properties.
I mean, I can’t say I’m surprised the hotel might not be performing that well. Budapest is a very competitive hotel market, it’s one of the better value luxury hotel markets in the world, and it’s also, umm, an interesting time for Hungary politically.
So maybe the property wasn’t performing well, but does Al Habtoor Group think it’ll perform better independently, with a brand that a vast majority of visitors have never heard of? Now, the owners are probably thinking “we’ll save the X% fee we have to pay Marriott for managing the property,” and that’s true.
But I think it’s delusional to think that going independent won’t lead to a massive dip in revenue. For that matter, a lot more bookings will roll in through online travel agencies, significantly increasing distribution costs.
I think the concept of having an independent property works if it’s a boutique hotel, or there’s something really special about a property, so that it’ll be known as “the” place to stay in a given market. But I just don’t see that being the case here.
Anyway, I’m curious to see if this property actually fully maintains independent branding in the long run, or if we eventually see it join something like Hilton LXR, which is Hilton’s collection of independent, luxury properties. Then again, Al Habtoor Group recently withdrew Al Habtoor Palace Dubai from Hilton LXR, so that seems unlikely.
Bottom line
The Ritz-Carlton Budapest has been rebranded as Al Habtoor Palace Budapest, named simply after the Emirati company that owns the property. I just don’t see this rebranding ending well, assuming that the plan is for the hotel to remain fully independent.
Al Habtoor has virtually no name recognition in Budapest, and while the owners might save a percentage on fees for running the property, I have to imagine that revenue will decline significantly as well. I’m curious to see for how long this hotel maintains its independent branding.
What do you make of the Ritz-Carlton Budapest’s rebranding?
This is the kind of property that would do well under the Preferred Hotels & Resorts umbrella. I wouldn't be surprised to see them show up in that collection.
I got Bonvoyed on this yesterday. Had a reservation in March. Got an email confirmation of my booking at the Dorothea. Wasn't till hours later that I got an email explaining it. They changed my booking but not my rate. The Dorothea was 7K points per night cheaper, so I had to call to have them refund that. From what I hear now the Dorothea is actually a better property.
So, now it's confirmed. The "odd" reason for the property's exit is litigation/arbitration between Marriott and the owner. Presumably, it's over fees, management practices or perhaps a clause in the agreement that gave him a geographic franchise and he feels Marriott has undercut him by opening new hotels within the same market.
Oh no got some good value here couple years ago during a summer trip using multiple Marriott 35k certificates for nights at this Ritz when cash rates were just around $500/night!
The article makes no mention of how much the fee is to have the Ritz name.
It's not a fee. With two or three exceptions (Montreal, Chicago and, I think, Kuala Lumpur), Marriott does not license or franchise Ritz-Carlton. You are required to hire Marriott to operate the property. So, there are lots and lots of fees involved.
Even SG is not francised? They have such a long exclusion clause of benefits.
I don't know about Singapore. But I thought YTL had a license to own and operate the Ritz-Carlton in Kuala Lumpur. I know Chicago and Montreal are both licensed. I believe the rest of the Ritz-Carlton property is not.
Vanity project/flagging for the family. Maybe he will do a deal with Trump who also likes his name on things.
This episode illustrates that property owners simply lease a brand name. Over the last 10 years, this property has had three brands. Such a thing is not uncommon. Non-compliance with brand standards are not necessarily enforced. In the end, brand means nothing. Even being within a common ownership group means nothing. One must assess each property individually.
It would suggest the owner has a problem with management companies. So he's decided to assume direct management.
"But I think it’s delusional to think that going independent won’t lead to a massive dip in revenue."
Is it though? When you're caught up in the miles and points game, it's easy to forget that there are a vast number of independent hotels, of all sizes, operating successfully.
Selling based on affiliation to a global brand is just one possible business model. The royalties you pay to use a global brand, and everything that comes with that, is a substantial expense.
You don't need a big international chain if you're the best or one of the best luxury hotels in a market. But you most certainly need the chain if you're only a mediocre or average hotel in a city full of hotels.
Agreed. There's something called social consanguinity. In essence, birds of a feather. This property's owner is Middle Eastern. Those traveling from the Middle East to Budapest might be drawn to that. This effect occurs with the Dorchester Collection, which is owned by the Sultan of Brunei.
There aren’t enough wealthy traveling Brunei nationals to fill Dorchester hotels most of the year.
These are investments, vanity projects and/or brand recognition plays for some party or another.
Isn't not Brunei nationals. I can tell you from direct personal knowledge that Muslims of many nationalities choose the Dorchester Collection because of the ownership.
And a lot of hotels make more money on banquets and catering events than rooms. I'd argue most convention center, trade show, and downtown urban core hotels probably aren't profitable on room rate revenue.
Maybe I'm the weird one here, but I really don't think most people know about or pay any actual attention to companies/families that own a given hotel, unless it's a family friend of theirs that's offered them a discount or other perks, or they run travel arrangements for their business and have contracts with the hotel owner, or if the owner has been well-publicized in the news for one reason or another.
I don't know about that because many people think the Marriott family not only owns and controls the company but owns and operates all the hotels under every brand. I would agree that most people probably don't understand that with some notable exceptions most hotels are operated under a franchise or license agreement. There's a reason why Starbucks doesn't franchise.
@Fred - I googled "social consanguinity" and it means marrying someone closely related... how does this relate to The Ritz Carlton Budapest?!
What is the best Marriott in Budapest now, the new W? I had hoped to try the R-C on points next year.
Perhaps there is a larger strategy at play here. What if Habtoor Palace wants to become an entirely new hotel chain? With 10 more Habtoor Palaces worldwide, it could pretty much become its own brand. Losing x% of business from Marriott in the coming years does not necessarily mean failure. It could be an investment that pays off tenfold over the next decade.
Wow - what a bummer. Literally just booked the RC Budapest last night for a stay over Memorial Day weekend. Marriott website still let everything book normally as if a Bonvoy property. I did some additional research and Al Habtoor has a shadow website set up for Al Habtoor Palace Budapest with same room types, etc. What a shame - I read incredible things about the Club Level and loved the location but am not...
Wow - what a bummer. Literally just booked the RC Budapest last night for a stay over Memorial Day weekend. Marriott website still let everything book normally as if a Bonvoy property. I did some additional research and Al Habtoor has a shadow website set up for Al Habtoor Palace Budapest with same room types, etc. What a shame - I read incredible things about the Club Level and loved the location but am not going to spend that kind of coin if not getting points or any kind of perks.
"As of January 6, 2025, the Ritz-Carlton Budapest has been rebranded as Al Habtoor Palace Budapest. Rather bizarrely, as of now the property continues to be bookable through Marriott channels as a Ritz-Carlton, even though that branding no longer applies, and Marriott is no longer managing the property."
That suggests there was or is some kind of dispute between the owner and Marriott International.
Especially since the only news item (besides this blog) is...
"As of January 6, 2025, the Ritz-Carlton Budapest has been rebranded as Al Habtoor Palace Budapest. Rather bizarrely, as of now the property continues to be bookable through Marriott channels as a Ritz-Carlton, even though that branding no longer applies, and Marriott is no longer managing the property."
That suggests there was or is some kind of dispute between the owner and Marriott International.
Especially since the only news item (besides this blog) is an English language article on an Arab news website. There isn't even anything in Hungarian. Meanwhile, the Ritz-Carlton Budapest Facebook page was last updated December 30.
Hungarian media:
https://index.hu/fomo/2025/01/08/ritz-carlton-luxushotel-budapest-markavaltas-khalaf-al-habtoor/
https://turizmus.com/cikk/szallashely/bucsu-budapesti-ritz-carltontol-al-habtoor-palace-ultra-luxus-szallodamarka
https://hvg.hu/gazdasag/20250109_Nevet-valthat-a-budapesti-Ritz-Carlton
Well, now we know the real reason:
In an exclusive interview in the fall, he also revealed to ATV that he had invested in a major development in Törökbálint, and that he was in litigation with the Marriott Group over the termination of his management contract for The Ritz-Carlton in Budapest, and was also demanding significant damages from the hotel conglomerate. Arab News is suing Marriott International in this case, but the company declined to...
Well, now we know the real reason:
In an exclusive interview in the fall, he also revealed to ATV that he had invested in a major development in Törökbálint, and that he was in litigation with the Marriott Group over the termination of his management contract for The Ritz-Carlton in Budapest, and was also demanding significant damages from the hotel conglomerate. Arab News is suing Marriott International in this case, but the company declined to comment on the dispute that has reached the court stage.
So, it's what I suspected. Reminds me of the Marriott in Warsaw.
"Al-Habtoor, who owns several international hotels, is also in a lawsuit against Marriott over the termination of the contract, and is also demanding a significant amount of compensation, but he did not tell Arab News, which reported on the case , exactly why . The details of the case were not made public, but the businessman was allegedly dissatisfied with Marriott's hotel management."
Stayed at the Intercontinental there last summer using a free night certificate and it is in dire need of a refresh. The location and views are amazing, but it felt like it hadn't been touched up in 20 years. The FS next door exasperated that even more.
I would say that it sounds like Al Habtoor could be a good fit for the GHA, albeit they do already have significant presence in both BUD and the UAE.