Budget Hotels Market Report 2025

This Budget Hotels market report provides a comprehensive analysis of the market’s characteristics, size, and growth, including segmentation, regional and country-level breakdowns, competitive landscape, market shares, trends, and strategies. It also tracks historical and forecasted market growth across various geographies.

The budget hotels market size has grown strongly in recent years. It will grow from $284.83 billion in 2024 to $300.83 billion in 2025 at a compound annual growth rate (CAGR) of 5.6%. The growth in the historic period can be attributed to increased demand for budget-friendly accommodation options during economic downturns and uncertainties, rise in local travel due to pandemic-related restrictions on international travel, increased popularity of online platforms, enhanced quality and variety of amenities offered by budget hotels to attract more guests, growth in budget-conscious business travelers seeking cost-effective accommodation.

The budget hotels market size is expected to see strong growth in the next few years. It will grow to $370.08 billion in 2029 at a compound annual growth rate (CAGR) of 5.3%. The growth in the forecast period can be attributed to the continued preference for budget hotels due to ongoing economic challenges and inflation, a growing number of digital nomads seeking affordable long-term stays in budget hotels, continued focus on hygiene and safety standards, attracting budget-conscious travelers, increase in solo travelers and backpackers opting for budget-friendly accommodation, travelers becoming more cost-conscious, seeking value-for-money accommodation. Major trends in the forecast period include the implementation of AI-powered customer service, integration of local experiences, stylish and unique budget hotels, technology-driven personalization, and incorporation of wellness amenities such as fitness centers, healthy dining options, and wellness programs.

The growing travel and tourism industry is expected to drive the expansion of the budget hotel market. Travel and tourism encompass the activities of individuals traveling away from their usual environment for leisure, business, or other purposes, and the industry that supports these activities. The rising demand for travel and tourism is fueled by increasing disposable incomes, enhanced global connectivity, and a growing desire for unique experiences and cultural exploration. Budget hotels are utilized in travel and tourism to provide affordable lodging options for travelers, improving accessibility and inclusivity in their travel experiences. For example, in May 2024, the Office for National Statistics, a UK-based national statistical institute, reported a rise in overseas visitors to the UK, with 38 million trips in 2023 compared to 31.2 million in 2022. These visitors spent $39.95 billion (£31.1 billion), an increase of $5.91 billion (£4.6 billion) from the previous year. Consequently, the growth in travel and tourism will drive the budget hotel market.

Major companies in the budget hotel market have been focusing on integrating large language model technology to enhance customer service and improve operational efficiency. Large language model technology involves advanced AI systems capable of understanding and generating human-like text based on extensive data. For example, in June 2023, Booking Holdings Inc., a US-based provider of online travel and related services, introduced a new AI Trip Planner. This tool features a conversational interface that allows travelers to ask questions, seek inspiration, and refine their searches in real-time. It offers personalized recommendations for destinations and accommodations based on individual preferences and enables users to create detailed itineraries for various cities, countries, or regions. Integrated with the Booking.com app, the tool displays pricing and provides direct links to accommodation details, allowing users to book recommended options with a single tap.

In February 2024, Travelodge Hotels Limited, a UK-based hospitality company, acquired 66 hotels from LXi REIT for $266 million. This acquisition, which includes hotels across London, the Midlands, and Northern England, allows Travelodge to gain greater control over these assets, enhancing value creation. LXi REIT is a UK-based closed-end real estate investment company.

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.

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. The countries covered in the budget hotels market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Budget hotels are economical accommodation choices that provide essential amenities and services at lower prices than mid-range or luxury hotels. They are designed for cost-conscious travelers, offering basic comforts such as clean rooms, free Wi-Fi, and sometimes breakfast, without the extras found in higher-end hotels.

The main types of budget hotels include business hotels, airport hotels, suite hotels, serviced apartments, and resorts. Business hotels are specifically designed to meet the needs of business travelers, offering amenities such as meeting rooms, high-speed internet, and convenient locations. These hotels generally provide free Wi-Fi, parking, airport shuttles, and breakfast, and are available in economy, mid-range, and luxury price ranges. Booking options encompass online travel agencies, hotel websites, direct bookings, and other methods, catering to private, commercial, and government uses.

The budget hotels market research report is one of a series of new reports that provides budget hotels market statistics, including the budget hotels industry's global market size, regional shares, competitors with an budget hotels market share, detailed budget hotels market segments, market trends and opportunities, and any further data you may need to thrive in the budget hotels industry. This budget hotels market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The budget hotels market includes revenues earned by entities by providing services such as basic accommodation, front desk service, and standard amenities. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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