For the battle-hardened business traveler, budget hotel chains are synonymous with dreary decor, thin walls and the hum of the motorway beyond the window. But in the same way that Ryanair and easyJet raised their game to make the low-cost option acceptable for work trips, cheap hotels are taking the corporate pound offline with a move upmarket.
So while room service and extra towels are not on the menu, in Premier Inns and Travelodges across the country custom-made kingsize beds and power showers are becoming the norm. Once seen as cheap and soulless, fit only for hen- and stag-do destinations, Britain’s budget hotels have had a makeover and are winning favor with a growing number of business travellers.
Analysts say the investment in better amenities is coinciding with a reduction in corporate travel budgets. This means employees of big companies, accustomed to higher-end bookings, do not encounter a gulf in quality when they trade down to a Premier Inn or Travelodge.
Hugo Canelas of Boston Consulting Group said: “Over the years the major corporations have reduced their travel spend. Companies are becoming stricter in their travel policies and this is benefiting mid-scale and budget hotels.”
The budget phenomenon is transforming businesses’ attitudes to travel and accommodation. And in turn low-cost airlines Ryanair and easyJet are vying for a share of the business travel market by adopting practices associated with traditional airlines such as British Airways, such as the option of booking a specific seat. Virgin Trains, too, has created a standard-class business package.
Premier Inn and Travelodge, the UK’s two largest budget hotel chains, say around half of the FTSE 100 index of Britain’s biggest firms have business accounts with them, as well as thousands of small firms.
Travelodge, which runs 540 hotels, mainly in the UK, now makes more money from business than leisure travel. Premier Inn, owned by the Whitbread group and Britain’s biggest budget chain with 746 hotels, reports that half its customers are business travellers, who push up its occupancy rates with high numbers of weeknight bookings.
“The quality of the three-star hotel has improved, and Premier Inn has led the charge,” says Adam Knights, UK managing director of ATPI, a travel management firm that books accommodation and flights for businesses. “The beds in Holiday Inn Express, for example, are now really good – and travelers don’t need 23 towels and room service.”
Hotel room standards at the lower end of the market have generally improved in the UK, says Knights. Aside from the rapid expansion of Premier Inn and Travelodge, there has been an “explosion” in low-cost brands owned by major chains, he added. Its business customers have been trading down from four-star hotels, such as the Waldorf Hilton in London, to cheaper chains.
Businesses can now choose from three- and four-star brands including DoubleTree, Hampton or Hilton Garden Inn, all owned by Hilton; Renaissance and Courtyard, both by Marriott; Holiday Inn and Holiday Inn Express, part of the London-listed InterContinental group; and Ibis, owned by France’s Accor.
Premier Inn’s city-centre hub hotel offers bespoke Hypnos beds, a choice of pillows, monsoon showers and 40-inch digital TVs. Travelodge is introducing softer LED ceiling lights, bedside USB charging points and 32-inch TVs.
Travelodge rooms cost between £29 and £189 a night, while Premier Inn charges between £35 and £200. (As with budget flights, customers need to book early to get the cheapest rates.) Compare that with a starting price of £361 at a five-star Marriott in London, and £347 at the four-star Waldorf Hilton.
Travelodge chief executive Peter Gowers, a former InterContinental director who was brought in four years ago to oversee the chain’s turnaround, argues that in the post-crunch economy, “we’re all budget travelers now”.
Research commissioned by GTMC, which represents major travel management companies in the UK, shows that mid-range and budget hotels accounted for more business trips than luxury hotels last year.
Paul Wait, chief executive of GTMC, says business travel “dropped off a cliff” in 2008 at the height of the financial crisis, but has steadfastly recovered since then and is not far off pre-crisis levels. He adds that the demographic of business travelers has changed since 2013, when 80% were men and 20% women, and only 11% between 18 and 29 years old. Last year, the male-female ratio was 64/36, while the proportion of younger business travelers more than doubled to 23%.
This has helped drive a shift towards more budget hotel stays in the UK, he says. “If I’m only staying somewhere for one night, I’m quite happy staying in a budget hotel.”
But some corporate habits don’t change. An employee of one business travel agency said: “You often have the executives in the fancy hotels – and everyone else in the Premier Inns.”