The budget hotel sector in the UK is set to treble in size by 2027, according to a new report.
The study, commissioned by market number two Travelodge, said the budget sector, which currently accounts for 85,665 rooms in the UK, is expected to grow by around 225,400 rooms by 2027, and will account for 26.8 per cent of the total hotel market.
The study found that while the total hotel market is forecast to grow at around one per cent a year for the next two decades, the budget sector is expected to grow at 10 per cent a year for the next five years and five per cent a year for the following five years.
It concluded that the `traditional` hotel sector will contract over the next 20 years as consumers seek low-cost accommodation, with sub-standard hotels converted for residential or other commercial uses.
Travelodge previously outlined plans to triple in size to 70,000 rooms by 2020 and aims to be the market leader in London with 7,000 budget hotel rooms in time for the Olympics in 2012.
Whitbread PLC, owner of market-leader Premier Inn, said today in a trading statement it is confident there is a substantial long-term development opportunity for its chain.
It added it is on track to open some 3,500 new rooms in the UK this year, ahead of its previously stated 3,000-room target, having opened its 500th UK hotel in November in Bournemouth