Budget hotels to grow the UK hospitality industry

The budget hotel sector continues to boom despite the economic downturn and now accounts for almost two-thirds of the annual growth within the UK hospitality industry, according to new research. 

The Trends and Developments 2008 research published by the British Hospitality Association (BHA) also anticipates an aggressive marketing push from budget hotel operators from next year until 2012 Olympic Games.

The study further suggests that the budget hotel groups such as Travelodge and Whitbread-owned Premier Inn have increased the number of hotel rooms to cash in on the financial uncertainty.

A BHA spokesman says: “Whitbread’s Premier Inn expanded its rooms from 32000 to more than 36,000 in a year and Travelodge chain expanded its capacity from 18000 to 23,150 in the same period”

The study adds that the 24% rise in profits posted recently by Whitbread followed a boost in sales at its Premier Inn chain.

BHA says that while luxury hotel players will target their marketing activities at corporate customers, these business clients will be swayed towards the budget players. He adds: “Even groups such as Intercontinental would push their budget brand Express by Holiday Inn more aggressively.”

According to BHA, as business customers are opting for value hotels, the segment will continue to expand “very vigorously” at least for the next 15 months.

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