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News - 09/05/2016

The rise of the super budget hotel

We’ve seen significant shifts in the UK hotel sector over the past decade or so, as operators have sought to diversify and differentiate their product. LSH hospitality and leisure director Phillip Gibson reports on the ever changing profile of the budget hotel.

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First, in the early days, there were budget hotels, a concept spearheaded in the UK by well-known brands like Travelodge and Premier Inn.  Travelodge still sits firmly in the budget sector, but it’s arguable that Premier Inn has now moved into the limited service category, joining the likes of Holiday Inn Express and Hampton by Hilton.

We then saw the emergence of the “designer” budget label, with hotels such as Yotel, Dakota, Sleeprz and Motel One offering contemporary, consistent accommodation at a good price - and now we can add a new entrant to the seemingly never ending list of hotel sub sectors: Hub by Premier Inn, an urban concept that delivers small but well-equipped rooms with a deli style bar and food offer on-site.

Whilst the variations between these sectors may be overlooked by the travelling public, it does leave a space in the true budget sector - that is, hotels that offer no frills, add-ons or food and beverage facilities.

One operator that does stand out in this bracket is easyHotels, which opened its first operation in London in 2005.  Modelled on the budget airline approach pioneered by easyJet founder Sir Stelios Haji-Ioannou, properties offer small functional rooms and guests can choose extras such as TVs or a room with a window.

easyHotels now have 21 hotels (10 in the UK), the majority of which are operated by franchisees with plans to expand across the UK.

A newer entrant in the UK super budget category, with a similar operating model, is Malaysian based Tune Hotels, who we have recently worked with across a number of sites.  The company launched  its first UK hotel in London in 2010 and, in an indication of demand for this type of offer, already has 8 properties across the country.

The super budget sector - characterised by a “pay as you use” model for items such as televisions, air-conditioning, towels and room cleaning – now looks set to expand, further with both easyHotels and Tune seeking opportunities across the UK.  

While the hotel sector continues to diversify, and new trends emerge, it looks as if there’s one thing we can be sure of: a super budget hotel will be coming to a city near you in the not too distant future.



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