• Budget airlines and budget hotels fly together

The genesis of budget hotels is often compared to budget airlines but in reality their growth paths have been distinctly different.

But increasingly, the respective paths are crossing and the business models are becoming more alike. This is emphasised by two recent news events – Whitbread's hire of easyJet's Andy Harrison and the advance of Tune Hotels.com into a new continent.

Andy Harrison, currently chief executive of easyJet, is joining Whitbread as chief executive designate at the start of September. The 52 year old Harrison joins Whitbread just as its Premier Inn economy hotel chain adopts a variable pricing strategy that aligns itself more clearly with the approach of budget airlines.

Premier Inn grew initially using a fixed price scheme, gradually amending this to charge different prices in London, big cities and elsewhere. Building acceptance of the concept was viewed as more important than yield management.

Meanwhile, Tune Hotels.com announced this month a strategic partnership with established hotel owner and operator Queensway Group to roll out a number of limited service hotels in London.

Tune Hotels.com is part of Tune Group, the private investment operation controlled by Tony Fernandes, the founder and group CEO of budget airline AirAsia.

The plan is for Queensway to develop and operate 15 hotels across London by 2017. The first property in the £150m investment is at Westminster Bridge and is due to open at the end of this year.

Tune Hotels have a model which is much more alike budget airlines with the model of selling off earlier rooms cheaper and charging extra for phone bookings. It even goes as far as offering discounts for guests bringing their own sheets and toiletries.

HA Perspective: It would be tempting to believe Premier Inn will now pursue a more budget airline like strategy but that seems unlikely given the lengths the brand has gone to to distinguish itself from arch rival Travelodge.

With easyHotel and Tune now taking on Travelodge in the no frills segment, it hardly seems a place where Premier Inn wants to head. Rather a continuing focus on charging a bit more for more quality is Premier Inn's most likely choice, even under a Harrison regime.

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