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Hot Topics > Hotel Trends

Budget hotel market most dynamic in industry

By Becky Paskin , 03-Mar-2011

The branded budget hotel sector grew at a rate of one hotel a week during 2010, making it the most dynamic segment of the UK hotel industry.

According to the latest Budget Hotels Report 2010 from HotStats and Hotel Analyst, a total of 54 new budget hotels were opened last year, creating 5,446 new rooms.

Travelodge was the fastest growing budget hotel chain during the year, having added 3,833 rooms to its portfolio in its bid to become the largest budget hotel operator in the capital by the 2012 London Olympic Games.

But despite its rapid growth rate, Travelodge’s 27 per cent market share was dominated by competitor Premier Inn’s 37 per cent, despite the latter only expanding by 1,043 rooms by the year end.

Holiday Inn Express, the UK’s third largest brand, added just 540 rooms to its estate, reducing its market share to 11 per cent.

Cheaper hotel rooms

The report also showed that revPAR for branded budget hotels rose by an average of 4.7 per cent for the year, despite a decline in room rate of 1.0 per cent to £50.33. Occupancy however improved by 3.9 per cent to 71.6 per cent.

Hotels situated in London saw revPAR increase by 12.1 per cent for the year, in contrast to those outside the capital which saw revPAR rise by 2.9 per cent.

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