An announcement from Travelodge – already featured on this blog for their aggressively-priced “sales” – recently caught my eye. They’re now planning to spend a further £84 million to buy up and convert hotels in London.
The company is even offering you a finder’s fee to help them find suitable sites and has set up a special development website for the purpose.
Travelodge aims to become London’s biggest hotel brand by 2012 and talks about an “unassailable” 1000 room lead on their nearest rival.
This sort of talk is particularly impressive in the current economic climate.
The main rival to Travelodge, Premier Inn (owned by Whitbread) is also undergoing expansion.
Why then this big rush of new investment in London hotels? It seems that London’s 2012 Olympics is one of the key factors.
As the Chief Executive of Travelodge, Grant Hearn, said recently: “The Olympics is a once in a lifetime opportunity for the tourism industry and we intend to take it with both hands.”
Long term, there seems to be an increasing trend towards budget hotels, with the sector projected to treble by 2027.
Is this a good thing for hotel visitors? An increase in London’s hotel capacity should in theory increase competition and bring prices down.
The so-called “value hotels” are also executing their model in a consumer-friendly way.
Both groups sometimes provide larger rooms (since they often convert office blocks), a rarity in London. Rooms have efficient – if sometimes slightly cold and minimalist – functionality.
London’s budget hotels are also spawning a new “luxury budget” sector led by innovators like YOTEL and Base2stay as already commented on.
To the extent that they increase choice and competition in the market, the growth of value hotel chains is no bad thing.
What’s more probable is that they will raise the standard at the bottom end of the market, thereby helping you avoid some of the potential hotel “nightmares” that unwary visitors might face.
It’s not a good prospect for London’s few mediocre hotels which are unclean, expensive and provide poor service.
The budget hotel groups are therefore raising the standard at the bottom of the market as well as increasing the pressure to add value further up.
Photo credits: Travelodge, One Aldwych.