Budget Hotels: Ever More Popular

The age of the budget hotel is upon us. Today's Global Traveller special report in the FT includes a column by Alan Parker, chief executive of the Whitbread Group. Premier Inn, the UK's largest hotel chain, is owned by Whitbread.

Parker observes general growth in "budget" brands and services, which includes:

...the phenomenal growth seen by the budget hotel sector in recent years. The number of rooms has more than doubled, from 40,000 to 90,000, in the UK since 2000 alone. Indeed, the sector now accounts for two-thirds of the annual growth within the UK hospitality industry. What's more, occupancy and revenues are growing fastest at the budget end of the market.

Yet there remains huge potential for additional growth.

The branded budget market is still relatively under-represented in the UK, with a 13 per cent share compared to 23 per cent in France and 25 per cent in the US, both more established markets. There is clearly room for more.

And this room for growth has many components. Tough economic times are driving business travelers to stay at budget-friendly hotels. The mass cultural turn toward travel bargains—which continues to fuel the market for low-cost air travel—remains strong. The future is rosy for budget hotels.