Budget Hotels Market Research, 2032
The global budget hotels market size was valued at $276.3 billion in 2022, and is projected to reach $430.9 billion by 2032, growing at a CAGR of 4.1% from 2023 to 2032.
Budget hotels, sometimes referred to as economy hotels or value hotels, are lodging options that are reasonably priced for guests who want to travel but also want a comfortable place to stay. In contrast to premium hotels, these hotels strive to offer fundamental amenities and services at lower prices.
A shift in tourist behavior has increased demand for budget-friendly lodging. Luxury accommodations aren't a priority for many contemporary tourists, especially millennials and vacationers on limited funds. This change has resulted in a greater budget hotels market demand that offer value without sacrificing comfort. The use of technology has completely changed the way budget hotels operate and interact with their customers. The guest experience has been improved using online booking tools, mobile apps, and digital check-in procedures. With less reliance on third-party booking sites and more customized interactions made possible by this tech-driven strategy, budget hotels also communicate directly with tourists.
Budget hotels are progressively emphasizing the visitor experience while keeping cost-effectiveness as a top priority. To ensure that guests have a comfortable and enjoyable stay, they are combining contemporary décor, plush bedding, and useful amenities. Budget hotels are looking toward innovative ways to differentiate their establishments, such as neighborhood alliances, community activities, and themed architecture. The budget hotels market has also been impacted by the trend toward sustainability. Budget travelers aren't the only ones who are concerned about their influence on the environment. Therefore, to cater to the desires of environmentally concerned visitors, budget hotels are implementing eco-friendly practices including energy-efficient lighting, water-saving fixtures, and waste reduction programs.
There are many hotels competing for the attention of guests on a limited budget in the highly competitive budget hotel sector. Price wars and decreased profit margins for hotel owners resulted as a result. In comparison to higher-end accommodations, budget hotels have considerable profit margins because of their lower room rates and fewer premium amenities. This makes it difficult to spend money on improvements and remodeling.
Budget hotels are promoting direct bookings more and more through their own websites or loyalty programs. By doing this, they avoid using third-party booking sites and keep a closer connection with their customers. Direct bookings also provide the chance to reward regular customers with special offers and benefits. Budget accommodations are typically found near roadways. The growth of budget hotels into cities is a new trend, though. As a result, tourists and business visitors seeking convenience and affordability obtain affordable lodging in the middle of cities.
The hospitality sector, which includes budget hotels, was severely affected by the COVID-19 pandemic. Improved cleaning procedures, contactless check-in, and check-out procedures, and better ventilation systems are all results of the increased importance placed on health and safety requirements. These precautions are designed to reassure visitors and guarantee a secure stay. As a result of the fierce competition in the budget hotel industry, marketers have had to come up with creative strategies to stand apart. Some budget-friendly lodgings concentrate on particular clientele, such as families, digital nomads, or solo travelers, and adjust their services accordingly.
Budget hotels are sometimes associated with worse quality or uncomfortable accommodations. Budget hotel providers face difficulty in overcoming unfavorable views and delivering consistent quality. Budget hotels often have fewer possibilities to upsell visitors on extra services or facilities, which has an effect on how much money they may make. Particularly susceptible to changes in the economy are budget hotels. Travelers cut back on their trip expenses during economic downturns, which has an impact on occupancy rates and revenues.
Budget hotels are capitalizing on the trend of tourists looking for real local experiences. They collaborate with neighborhood companies, make suggestions for neighboring attractions, and plan community-oriented activities. Budget hotels are distinguished from other types of lodging by this interaction, which improves the whole client experience. In the budget hotels market, the state of the economy is crucial. Budget hotels are in high demand when the economy is struggling because travelers are more likely to look for affordable solutions. By offering a compelling value proposition, budget hotels take advantage of this and let visitors save money on lodging while still having a pleasant stay.
The global budget hotels market is analyzed on the basis of type, guest type, mode of booking, and region. By type, the market is divided into limited-service hotels, capsule hotels, hostels, motels, and others. As per guest type, the market is segmented into business travelers, leisure travelers, families, and others. Depending on the mode of booking, it is classified into online travel agency, hotel websites, direct booking, and others. Region wise, the budget hotels market is analyzed across North America (the U.S., Canada, and Mexico), Europe (Germany, the UK, France, Italy, Spain, and the rest of Europe), Asia-Pacific (China, India, Japan, Australia, Thailand, Vietnam, and the rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).
As per type, the limited-service hotels segment dominated the global budget hotels industry in 2022 and is anticipated to maintain its dominance throughout the budget hotels market forecast period. Technology is being used by limited-service hotels to improve the visitor experience and streamline operations. To increase convenience and minimize face-to-face contact, more hotels are implementing contactless check-in/check-out, mobile room keys, and in-room technology controls. When constructing rooms and common areas, hotels are putting a heavy emphasis on the preferences and wants of their guests. The convenience and functionality of travelers are catered for through multipurpose areas, ergonomic furniture, and flexible room designs. In response to rising environmental concerns, a lot of limited-service hotels are adopting eco-friendly methods. They are increasingly integrating waste reduction initiatives, water-saving technologies, and energy-efficient lighting into their daily operations.
BY GUEST TYPE
The leisure travelers segment dominated the global budget hotels market in 2022. Even on a tight budget, leisure tourists are increasingly looking for distinctive and immersive experiences. These guests are drawn to and kept in budget accommodations that provide local knowledge, suggestions for unexplored attractions, and opportunities to interact with the local culture. Leisure travelers are looking for lodging that accommodates their business needs as a result of the growth of remote work and digital nomadism. Travelers seeking to combine business and leisure are drawn to budget hotels offering coworking areas, fast Wi-Fi, and cozy workstations.
BY MODE OF BOOKING
The direct booking segment is predicted to show the fastest global budget hotels market growth during the forecast period (2023-2032). The popularity of direct booking is growing as online booking platforms and websites develop. Budget hotels are encouraging clients to book directly by streamlining the booking procedure on their websites. Many budget hotels promise the lowest rates to clients who make direct bookings via their official websites. By avoiding third-party booking websites, this strategy seeks to ensure prospective guests that they are getting the best deal possible.
Region wise, North America is predicted to dominate the market with the largest budget hotels market share during the forecast period (2023-2032). In North America, budget hotels are rapidly implementing technology to improve visitor experiences and optimize operations. This includes individualized communication through mobile apps, mobile check-ins, and digital room keys. While many budget hotels still place a strong emphasis on affordability, others are beginning to place a stronger emphasis on the guest experience by offering plush, contemporary facilities, beautifully decorated public areas, and distinctive design features that set them apart from other types of affordable lodging. In the hospitality sector, sustainability has become a significant concern. The use of eco-friendly methods, like water-saving fixtures, energy-efficient lighting, and waste reduction initiatives, is being investigated by budget hotels.
The key budget hotels industry players include G6 Hospitality LLC., Ibis Budget Hotel, OYO Hotels & Homes, easyHotel, Red Roof Inn & Suites, Super 8, Toyoko Inn, Travelodge, B&B HOTELS Group, and Premier Inn. OYO is an international chain of budget hotels renowned for its rapid development and technology-driven approach. OYO collaborates with independent hotels and provides uniform rooms with the necessary amenities for a reasonable price. Its market domination is a result of its user-friendly app, broad property network, and strong branding. Premier Inn is a reputable network of budget hotels that places an emphasis on providing reliability, comfort, and reasonable prices. Its reputation for dependability and client satisfaction helps it maintain a strong presence in the UK and other nations.
SOME EXAMPLES OF EXPANSION IN THE MARKET
- In May 2022, Travelodge Hotels Ltd. expanded its business presence by opening six hotels under budget category in UK.
- In February 2023, easyHotel announced new franchise in Madrid, Spain. With this, it will expand its business presence in the country.
- In March 2023, Whitbread PLC expanded its business presence in the UK by opening 11 new Premier Inn and Hub by Premier Inn brands.
- In February 2023, Oravel Stays Limited expanded its business presence in the UK by adding 40 new hotels, to increase its revenue.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the budget hotels market segments, current trends, estimations, and dynamics of the budget hotels market analysis from 2022 to 2032 to identify the prevailing budget hotels market opportunities.
- The budget hotels market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the budget hotels market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global budget hotels market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global budget hotels market trends, key players, market segments, application areas, and market growth strategies.
Budget Hotels Market Report Highlights
Market Size By 2032
USD 430.9 billion
CAGR of 4.1%
2022 - 2032
By Guest Type
By Mode of Booking
Key Market Players
Toyoko Inn Co., Ltd., Red Roof Inn, Whitbread PLC, G6 Hospitality LLC., B&B HOTELS Group, easyHotel, Oravel Stays Limited, ibis Hotel, Travelodge Hotels Ltd., Wyndham Hotels & Resorts, Inc.
The perspectives of the leading CXOs in the budget hotels industry are presented in this section. The market for budget hotels has grown and changed significantly in recent years. These accommodations, sometimes known as budget or economy hotels, cater to budget-conscious visitors looking for cozy housing without expensive amenities. Due to the combination of price and decent lodging quality, this market has grown more and more attractive. Several factors have contributed to the growth of a budget-friendly hotel business. Travelers now find and book affordable rooms more easily because of the growth of Internet booking platforms and travel aggregators, which has increased the market's visibility. Additionally, shifting consumer preferences have increased demand for experiences that put more of a premium on discovery and local immersion while reducing the emphasis on upscale amenities traditionally found in higher-end hotels.
Budget hotels have incorporated a variety of strategies to remain competitive. To maintain appealing price points and guarantee positive guest experiences, they place a high priority on efficient cost management and streamlining operations. Numerous budget hotels also place a strong emphasis on technological innovations like self-check-in kiosks, mobile apps for service requests, and smart room amenities. The market for budget hotels has also been impacted by ongoing global economic shifts and the effects of incidents like the COVID-19 pandemic. Budget hotels profit from their visitor propensity to seek affordable accommodation during economic downturns.