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How Is The Budget Hotels Market Expected To Grow In Terms Of Size?

There has been a robust growth in the budget hotels market in the past few years. The market value is expected to increase from $284.83 billion in 2024 to $299.14 billion in 2025, with a projected compound annual growth rate (CAGR) of 5.0%. This growth in the historic period can be credited to the rising demand for affordable lodging options during times of economic instability and uncertainties, an upsurge in local travel due to pandemic-induced restrictions on international travel, an increasingly widespread use of online platforms, improved standards and diversity of facilities provided by budget hotels to entice more customers, and an increase in budget-minded business travelers looking for cost-effective accommodation solutions.

The market size of budget hotels is projected to witness considerable growth in the upcoming years, with a forecasted growth to $366.82 billion by 2029, backed by a CAGR of 5.2%. The predicted expansion during the forecast period can be linked to factors such as the persisting preference for budget hotels brought on by continued economic hurdles and inflation, an increasing population of digital nomads opting for affordably priced extended stays in budget hotels, a constant emphasis on maintaining hygiene and safety standards to attract budget-minded travelers, a rise in solo travelers and backpackers choosing economical accommodations, and travellers becoming more cost-aware, looking for accommodations that offer value for money. Some of the key trends projected for the forecast period comprise the introduction of AI-enabled customer service, incorporation of local experiences, distinctive and stylish budget hotels, technology-induced customization, and the inclusion of wellness facilities like fitness centers, health-focused dining options, and wellness schemes.

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What Growth-Enabling Forces Are Impacting The Budget Hotels Market?

The growth of the budget hotel market is anticipated to be driven by the escalating travel and tourism industry. Travel and tourism involve people journeying beyond their familiar surroundings for pleasure, work, or other reasons, supported by an industry that enables these activities. Rising disposable income, enhanced global connectivity, and a growing yearning for unique and culturally immersive experiences are boosting the demand for travel and tourism. This sector often utilizes budget hotels to provide cost-effective lodging solutions for travellers, thereby promoting travel inclusivity and accessibility. As an illustration, the Office for National Statistics, a statistics body based in the UK, noted in May 2024 an increase in foreign tourists in the UK. The number of trips rose from 31.2 million in 2022 to 38.0 million in 2023, representing an expenditure increase from $39.95 billion (£31.1 billion) to $45.86 billion (£35.7 billion) year over year. Thus, the surge in travel and tourism underpins the growth of the budget hotel market.

How Is The Budget Hotels Market Organized By Different Segments?

The budget hotelsmarket covered in this report is segmented –

1) By Type: Business Hotels, Airport Hotels, Suite Hotels, Serviced Apartments, Resorts

2) By Amenities: Free Wi-Fi, Parking, Airport Shuttle, Breakfast

3) By Price Range: Economy, Mid-Range, Luxury

4) By Mode Of Booking: Online Travel Agency, Hotel Websites, Direct Booking, Other Modes Of Booking

5) By Application: Private, Commercial, Government

Subsegments:

1) By Business Hotels: Economy Business Hotels, Budget Corporate Hotels, Business Hotels With Conference Facilities

2) By Airport Hotels: Budget Airport Hotels (Transit Hotels), Economy Airport Hotels With Shuttle Services

3) By Suite Hotels: Budget All-Suite Hotels, Extended Stay Suite Hotels, Affordable Luxury Suite Hotels

4) By Serviced Apartments: Budget Serviced Apartments, Economy Extended Stay Apartments, Affordable Short-Term Rental Apartments

5) Resorts: Budget Beach Resorts, Affordable Mountain Resorts, Economy Wellness Resorts

What Current And Upcoming Trends Are Shaping The Budget Hotels Market?

Leading corporations in the budget hotel industry have emphasized the incorporation of large language model technology to boost customer satisfaction and streamline operations. This technology involves sophisticated AI systems that both comprehend and produce text resembling human conversation using extensive data. For instance, Booking Holdings Inc., a US-based company offering online travel and associated services, introduced a unique AI Trip Planner with a chat-based interface in June 2023. This interactive feature lets travelers inquire, find inspirations, and fine-tune their searches instantly. It offers customized suggestions for destinations and lodgings, tailored to individual preferences, and lets users organize comprehensive travel plans for different cities, countries, or regions. Integrated within the Booking.com app, it showcases prices and provides direct links to the specifics of the accommodations, allowing users to reserve recommended options with just one click.

Who Are The Primary Market Leaders In The Budget Hotels Market?

Major companies operating in the budget hotels market are Holiday Inn Express, InterContinental Hotels Group, Whitbread PLC, Choice Hotels International, Extended Stay America Inc., Premier Inn Limited, Travelodge Hotels Ltd, Red Roof Franchising LLC, Oravel Stays Limited, Toyoko Inn Co. Ltd., Econo Lodges of America Inc., B&B HOTELS Group, G6 Hospitality LLC, La Quinta Inns Inc., easyHotel, HotelF1, Future Inns UK Limited, Campanile Ltd, Bannatyne Hotels Limited, IBIS Hotel, Balladins Hotels, Dolby Hotel Liverpool Limited, Days Inns Worldwide Inc.

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How Do Regional Dynamics Influence The Budget Hotels Market Performance?

North America was the largest region in the budget hotels market in 2024. The regions covered in the budget hotels market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

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