Budget Hotels Market Expected to Reach $430.9 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Budget Hotels Market," The budget hotels market size was valued at $276.3 billion in 2022, and is estimated to reach $430.9 billion by 2032, growing at a CAGR of 4.1% from 2023 to 2032.

Budget hotels are places to stay that offer standard amenities and services at reasonable prices. These hotels cater to guests who want affordable lodging without compromising too much in terms of convenience and comfort.

Budget hotels are likely to maintain and even increase their usage of contactless technology for payments, keyless entrance, and check-in. Due to the convenience and safety advantages of this trend, which was pushed by the COVID-19 pandemic, it is anticipated to continue. In the budget hotel sector, health and safety regulations are of utmost importance. In order to attract customers who are concerned about their health, improved cleaning procedures, hygienic standards, and health certifications remain important selling features.

In an effort to attract guests who care about the environment, budget hotels keep implementing sustainable procedures. This includes initiatives to reduce waste as well as water and energy use in lighting. The market for budget hotels has become accustomed to variable rate booking and no-fee last-minute cancellations. Travelers who value spontaneity and have uncertain vacation plans will find this flexibility interesting. Budget hotels offer packages or services designed for both business and leisure since remote work remains common. This includes consistent Wi-Fi, designated workplaces, and cozy settings for both work and leisure. These budget hotels market trends are driving the budget hotels market growth. 

According to budget hotels market analysis, the 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. Among these, the limited-service hotels segment occupied the major budget hotels market share in 2022 and is projected to maintain its dominance during the forecast period. In comparison to full-service hotels, limited-service hotels, also referred to as select-service hotels, offer a more limited and simplified range of amenities and services. Travelers who value ease and affordability stay at these hotels. Personalized experiences are provided by limited-service hotels using guest data and technology, such as recommending nearby activities or facilities based on visitor interests.

By guest type, the market is segmented into business travelers, leisure travelers, families, and others. The business travelers segment is anticipated to grow at a moderate rate during the forecast period. Due to meetings and other responsibilities, business travelers frequently have unpredictable travel plans. To meet the budget hotels market demand without charging more, budget hotels provide flexible check-in and check-out timings. Budget hotels do not have large business centers, but they frequently offer basic services like printing, photocopying, and faxing to meet the demands of business travelers.

Depending on the mode of booking, it is classified into online travel agency, hotel websites, direct booking, and others. The direct booking segment is anticipated to grow at the highest CAGR during the forecast period. A significant trend in the hospitality sector is direct booking, which involves guests making bookings directly through a hotel's website or other direct means of communication. Budget hotels are particularly affected by this trend since they want to encourage direct booking from customers in order to cut down on their reliance on third-party booking sites and boost profit margins. To encourage guests to make direct reservations, several budget hotels provide "best rate guarantees". In order to give customers confidence that they are getting the greatest bargain, they guarantee that the prices listed on their official website will be the lowest ones accessible.

The region that dominated the global budget hotels market in 2022 was North America, and its dominance is anticipated to continue throughout the forecast period. In order to improve visitor experiences, budget hotels in North America are increasingly implementing technology. This includes keyless entry and mobile check-in, as well as the usage of mobile apps for communication, booking, and tailored services. By providing special discounts and benefits to visitors who book directly through their websites as opposed to through third-party platforms, several budget hotels are concentrating on promoting direct reservations. As a result, hotels were able to lower commissions and improve their rapport with visitors. Budget hotels are improving facilities while maintaining their price to give visitors a better experience. This includes free breakfast, improved Wi-Fi, and exercise centers.

The major players analyzed for the global budget hotels industry are 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.

KEY FINDINGS OF STUDY

• By type, the limited-service hotels segment was the highest revenue contributor to the market.
• As per guest type, the leisure travelers segment was the highest revenue contributor to the market.
• Depending on the mode of booking, the online travel agency segment was the highest revenue contributor to the market.
• Region wise, the North America region was the highest revenue contributor in the market.