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Budget hotel market has grown by 35% during the recession

14 March 2011 by
Budget hotel market has grown by 35% during the recession

The branded budget sector is the most dynamic segment of the UK hotel industry, according to a new study by independent hotel consultant Melvin Gold.

Commissioned by Travelodge, the report, Quantification of serviced accommodation supply in the United Kingdom and considerations of related issues, identifies that market share of branded budget accommodation has grown from 12% of the UK serviced hotels at the end of 2007 to 16% at the end of 2010.

The findings also reveal that the total number of serviced bedrooms currently stands at 729,000, with the budget sector at 115,000, which represents an increase of 35% from 2007 when total budget rooms were 85,665. Travelodge described the report as "the most comprehensive and accurate assessment of hotel supply in the UK".

Other key findings of the report include:

â- The branded budget segment is expected to be fuelled via new development, acquisition and conversion of independent and mid-market hotels

â- The UK's branded budget hotel sector (at 16%) is behind mature markets such as the USA, which has 33%, and France, which has 25%

â- A recent trend has seen budget hotels, which were originally built on roadsides and on the edges of town and cities, move into city centres.

â- The budget market is dominated by two key players, Premier Inn with 42,654 bedrooms in 585 hotels and Travelodge with 30,988 bedrooms and 452 hotels

â- The four largest brands - Premier Inn, Travelodge, Holiday Inn Express and Ibis (Accor) account for 84.3% of budget hotel supply

Author of the report, Melvin Gold, said that the findings reveal that the branded budget sector has grown at a faster rate than he predicted in 2007 when he first produced the study.

"This is predominately due to the economy which has created more consumer demand and caused independent and mid-market hotels to become available for acquisition," he said.

"The UK branded budget hotel sector has grown 10% per annum in the past decade and exceeded 20% in the prior decade. It's the fastest growing part of our industry and in the next two decades we can expect to see a UK budget hotel being built, opened or converted every five days.

Guy Parsons, chief executive of Travelodge, described the budget hotel sector as the engine room of the hotel industry.

"In response to the findings from our latest hotel supply study and in line with the growing trend from consumers wanting budget accommodation, we have increased our growth targets and plan to have 1,100 hotels in Europe with over 100,000 rooms by 2025," he said.

The full report is available to download at www.melvingoldconsulting.com

Budget hotels in the UK 2009 (BHA report) >>

Travelodge celebrates 25th anniversary of "first" budget hotel >>

Travelodge sold more than seven million rooms in 2010 >>

By Janet Harmer

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