The rise of budget hotels

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Aberdeen - where hotel prices have dropped the most

Aberdeen – where hotel prices have dropped the most

Although it seems as though prestige hotels are opening faster than ever it is fact the budget sector that takes the lead.

In the third quarter of this year more than 1,500 new budget rooms opened in the UK according to HVS’s Hotel Bulletin. Why should this be so?

According to HVS chairman, Russell Kett, “The low-cost budget sector continues to be popular with both leisure and corporate guests who appreciate their emphasis on the basic necessities of a decent bed, quality shower, free wi-fi and a TV. With the development of sub-brands such as hub by Premier Inn, the budget offer is becoming even more pared down and cost-efficient.” He continued, “While the economy is now much stronger, cheaper hotel stays have become the new norm and guests are reluctant to go back to spending more. Budget hotels are popular with operators as they are cheaper to build and run. With the check-in and check-out function becoming increasingly automated, the cost of running a budget property is relatively low.”

Could there be another reason? Could it be that we are reluctant to pay the high price that hotels are charging and we have turned away from all the fripperies on offer? Even Premier Inn to which Mr Kett refers is getting pricey. A Premier Inn in Leeds last night cost over £100; an Ibis was £98 and Travelodge on the outskirts – all the rooms in the two city centre ones had been sold – was over £70. Certainly I haven’t been able to book a Premier Inn at the £29 rate advertised by Sir Lenny Henry for a good while but I have seen some Premier Inns at over £200 a night when a large exhibition is nearby.

A sign that the budget market is expanding is the ever-increasing number of pubs who have stopped being just pubs and now offer half-a-dozen rooms per night as well. And some of those are much better value than hotels!

For the traveller, more hotels might mean an over-supply rather than a greater demand because every hotelier opens a new hotel in the firm belief that they will be money-spinners. That needn’t be true and an oversupply helps drive down prices which is what travellers want.

According to HVS, Aberdeen is the place that has seen the biggest reduction in hotel prices – down by 22% whilst Cardiff and Birmingham are amongst those cities showing increases.

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