Why Budget Hotels Will Continue To Enable Travel In These Challenging Times

By Karim Malak, CEO of easyHotel (www.easyhotel.com)

News headlines in recent months have painted a clear picture: families and individuals are facing very challenging times as the cost-of-living crisis heightens. The UK’s Office for National Statistics reports that inflation rates are the highest in 30 years* as the prices of essentials including groceries, fuel and energy are set to increase further throughout the next 12 months.

Undoubtedly, for a majority of people, their fall in disposable household income will mean they are forced to cut back and we in the hospitality industry know that the first items to go are often “leisure” activities – particularly, holidays.Whilst this may sound like bad news for the travel & tourism industry, what we are seeing at easyHotel is in fact the opposite – the Group is trading above 2019 pre-COVID levels and expected revenue for summer bookings is already currently significantly higher than summer 2019 whilst revenue since February has been between 20 and 70% above pre-pandemic levels.

For me, the reason is clear: after the past two years of restricted and disrupted travel, people are eager to make plans for trips away. They are willing to spend the money available to them on doing just that – but their budgets are shrinking. easyHotel and the budget hotel sector provides an option that means travel can still be affordable. In fact, one of the main reasons I joined easyHotel last year is because I strongly believe in making travel accessible to as many people as possible in a simple, frugal and responsible way, and I am proud to be playing a role in enabling this.

Interestingly, what we are also seeing is that there is no one “typical” budget hotel guest. The demographic is wide but in in broad terms, there are three general “types” of guest.

The first is the budget-conscious traveller. These tend to be those who are hit hardest by the inflationary environment. It might be, for example, a family who would usually aim to go on a summer holiday abroad to a European destination. They might struggle to do that this year with a smaller budget than usual, but still want to go away or use the opportunity to visit relatives. A staycation to a UK city, saving money at a budget hotel, means parents can still take their children away and have some funds left to enjoy local attractions and experiences.

Secondly, we have what I like to call the “budget-discerning” traveller. These tend to be people who are seeking to make up for lost experiences during lockdown. They have disposable income but are becoming smarter about where they choose to spend it. This category is broad – we are seeing young professional couples who might usually consider a stay in a hotel costing upwards of £150 per night, instead choosing to spend less than £60 a night at an easyHotel in a city centre, but use what they would have spent on the luxury hotel on a fine dining experience at a local Michelin Star restaurant instead.

And finally, I believe we are on the edge of a boom of travellers whose first priority is to have minimal environmental impact. Research shows that 58% of travellers are thinking more about sustainability since the COVID-19 pandemic and furthermore many would avoid flying for this reason . More travellers are looking specifically for hotels that operate in a sustainable way and many budget hotels, by their very nature of minimalism, do just that. Rooms are optimized which mean that less concrete and materials are needed in construction – over 70% of emissions in hospitality come from the building itself so smaller buildings with less materials mean a lower level of CO2 per traveller. Moreover, in an easyHotel we do not build food & beverage or gym facilities which use resources to build and run. We rely on the entire ecosystem of shops and services the city has to offer. We also limit waste as guests are not provided with unnecessary “extras”, such as miniature toiletries dispensed in plastic bottles. Our experience is that this approach is increasingly appealing to the environmentally conscious traveller.

The demographic is broad, and no doubt will continue to become broader as more travellers opt for the smart, value, sustainable choice for their trips away. Not forgetting business travellers too – corporate budgets are also under increasing pressure and stays in budget hotels can help businesses to reduce costs. Furthermore, consumer shifts within the industry mean we are seeing more investment behind budget hotel chains – a testament to the value they provide the sector.

I hope in these challenging times the budget sector will continue to do what it was originally designed to do: enable travel for the many.

Office for National Statistics – Consumer price inflation, UK: March 2022: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/march2022