According to German travel search engine Swoodoo, some hotels have increased prices six-fold, while Eurovision fans can expect to pay on average 144 percent more for a hotel room there during the contest than usual.
Azerbaijan, with just 9 million inhabitants and an economy dependent on oil, won the right to host the contest by winning the event last year in Germany with love song "Running Scared".
The country has come under fire, however, for its human rights record and with reports that homes have been razed near the new Crystal Hall arena as part of a wider redesign of the city.
In a country not known for its tourism facilities, the lack of available hotel rooms is what is driving prices up, said Swoodoo.
"The hotel infrastructure in Baku is not comparable with that with western and central Europe," said Christian Saller, CEO of Swoodoo. "Although they've invested a lot, they just haven't been able to get some hotels finished in time."
Swoodoo said that hotel rooms were available at an average price of 341 euros a night for the period between May 22 and 27.
That compares with an average of 140 euros for the weeks either side of the contest, said Swoodoo, which looked at prices from 100 operators.
The Eurovision final will take place on May 26, with two semi finals on May 22 and 24.
(Reporting by Victoria Bryan, editing by Paul Casciato)
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