Hotel industry set to follow budget airline model, says report

Hotel industry set to follow budget airline model, says report

The UK hotel market is set to follow the growth of budget airlines as consumers look for cheaper accommodation, according to an independent survey. A new report by Melvin Gold Consulting, commissioned by Travelodge, has predicted that the budget branded hotel sector could grow five percent per annum until 2020 and would have 26.2% of total supply in 2030. “We use a retail business model and an online pricing model similar to the budget airlines so that we can make hotels available to everyone at the best price,” said Guy Parsons, CEO of Travelodge. “[Some] consumers have traded down due to financial cutbacks and our customer feedback shows 85 percent of these customers have stated they will not be trading back up, as a low cost, new frills product suits their needs.” As a result, the consultancy expects the hotel industry to become more consolidated and branded in the future at the expense of independent and mid-market hotels. Melvin Gold said the results had outperformed its 2007 analysis. “This is predominately due to the economy which has created more consumer demand and caused independent and mid-market hotels to become available for acquisition,” said Gold. If the segment continues to grow at the predicted rate, it is thought that the UK will have as many branded hotels as the US (68.5 percent of market). Currently 39.7 percent of UK serviced accommodation is branded, while 6.7 percent are part of a consortia and 53.7 percent are independent.

Gary Marshall
Written by:
Gary Marshall
Posted On:
Posted In:
Hotel & Spa