Budget hotels sector hits £1bn as Brits embrace cheap breaks

The budget hotel market has topped the £1bn mark for the first time growing 38% between 2002 and 2006, according to Mintel. Growth in the budget sector is three times that of the overall UK hotel market, valued at £11.2bn, which grew by just 12% over the same period.

The budget hotel market has topped the £1bn mark for the first time growing 38% between 2002 and 2006, according to Mintel. Growth in the budget sector is three times that of the overall UK hotel market, valued at £11.2bn, which grew by just 12% over the same period.

Richard Cope, Mintel senior travel analyst, attributes the growth to the popularity of short breaks, independent booking and paying for “guaranteed basics”.

He adds: “Brits bought into low-cost airlines and now it is the turn of the budget hotel. The phenomenal growth of low-cost air travel has spawned a generation of cost-conscious but frequent travellers, and the UK budget hotel market has benefited greatly. Why pay more for a hotel room when you only plan to sleep in it for seven or so hours?”

He says boutique and lifestyle budget hotels have helped boost growth and provide affordable but luxurious alternatives to traditional hotels while capsule hotels in prime locations offer modern designs and smaller living spaces.

Mintel predicts a further 38% growth in the next five years with the market set to reach £1.5bn by 2012, fuelled by the Olympics.