The value of the UK budget hotel market increased by 38 per cent between 2002 and 2006, to reach £1 billion for the first time ever, according to the latest research from Mintel.
This growth is three times that of the overall UK hotel market (worth £11.2 billion), which increased by just 12 per cent over the same four year period.
Today, the budget hotel market is worth £1.1 billion, with no less than 85,000 budget rooms to choose from in the UK alone.
Senior travel analyst at Mintel, Richard Cope, said, "The Brits' desire for taking several short breaks a year, independent booking and paying for guaranteed basics has seen budget hotels surge in popularity.
"Boutique and lifestyle budget hotels such as The Big Sleep, the Hoxton Hotel and base2stay have raised the game by providing an affordable but luxurious alternative to their more traditional cousins.
He added, “In the same vein, the new capsule hotels in prime locations by brands such as Yotel and nitenite offer high-spec, cutting edge design but in smaller living spaces. Both have also helped boost the budget hotel market."
For budget hotels, a further 38 per cent growth is expected over the next five years, with the market set to hit the £1.5 billion mark by 2012. The run up to the Olympics is set to be a key factor driving this growth.
Like the low cost airlines, budget hotels have not created a new travelling class, they have simply maximised opportunities for wealthy holiday-loving ABs to travel more and opt to stay in hotels.
Indeed, while as a nation around 54 per cent of us have stayed in a budget hotel, this rises to some three in every four (76 per cent) amongst these wealthier AB travellers.
Richard Cope concluded, "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?"
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