• Budgets push boundaries

Travelodge has launched its latest format, Travelodge Plus, which it said was “designed around the needs of the budget traveller who wants that little bit more style and choice”.

The launch came after comments earlier this year from Whitbread that it was looking at a super-budget version of its Premier Inn brand.

Travelodge said that its new hotels would include bedrooms with king-sized beds, blackout curtains USB ports and bespoke pixel wall art. The brand’s SuperRooms, the group’s ‘premium economy’ room would include in-room Lavazza coffee pod machines, irons and ironing boards, larger desks and USB power points throughout.

The new bar café offering would include “distinctive zones designed to suit the needs of business and leisure travellers”. These include counter seating with built-in USB and laptop power for those working outside the room and more intimate booths and dining benches for groups.

The new Travelodge Plus format will be rolled out initially through an investment of more than GBP10m at hotels in Brighton, Edinburgh, Gatwick Airport, London, York and at the group’s largest ever new build hotel, a 395-room hotel in the City of London.

Peter Gowers, Travelodge CEO, said: “Britain is now a nation of budget travellers, with more of us choosing to stay in budget hotels than any other hotel type.  The launch of Travelodge Plus helps us offer that little bit more choice for those who want it, while staying true to our mission to be the favourite hotel for value.

“The hotel market is following the same path as airlines and retail.  Budget hotels launched as niche offers but now dominate the market, with a wider customer base than ever.  After investing more than GBP100m to upgrade our hotels across the UK, bringing in our ‘premium economy’ SuperRooms and now launching Travelodge Plus, we are now well placed to match the needs of today’s travellers.  From businesspeople more used to high-end hotels to those just getting away for a quick break, budget hotels now offer a wide range of travel choices to suit everyone.”

Langton Capital’s Mark Brumby said: “Such moves can bring higher margins but may also result in ‘facility creep’, with budget operators focusing on moving up the chain and allowing newer budget and super-budget operators to steal market share.”

Travelodge was not the only brand looking at extensions. At the Hotel Alternatives 2018 Event, hosted by Hotel Analyst, Mark Anderson, managing director, property and international, Whitbread, said: “The P&L has a bit of stress in it, which is putting pressure on our growth plans, plus competition from other hotels and people like Airbnb are a disruptive threat. We are a little too UK focused and a little too exposed.

“We’ve started to look in the UK at other tiers – there are some great hostel markets, there is a budget level below Premier Inn. We’ve got a number of other ideas in the pipeline. When we’ve been rolling out Premier Inns as fast as we have you get to a point where you can’t build any more Premier Inns in the UK. Hub is a bit small, you might get 25, 30 hotels. That’s why we’ve started to look overseas.”

The company did not respond to a request for comment from Hotel Analyst, but was currently working on modifying a property in Roath, Cardiff. According to planning documents, the company was planning to double the number of rooms in the site from 70 to 140, some without windows.

A letter to planners read: “Many guests at Premier Inns are in transit and/or spend little time in their bedrooms and Roach has been selected as a prototype for this new style.

“Some of the proposed rooms will have no external wall and so there will be no windows. Premier Inn have already experimented with this at some of their city centre hotels and found that guests are perfectly willing to use a room with no window.”

HA Perspective [Katherine Doggrell]: The good people at Kit Kat have done a lot of sterling work over the years with their brand extensions, with the possible exception of the green tea Kit Kat, and have provided much inspiration, not only in world of chocolate biscuits. Brand families are now embedded in the hotel world and Premier Inn, which already had Hub, is now looking smaller, while Travelodge is thinking more luxurious.

The new variants come as the budget sector continues to sprawl throughout the UK market, affecting those around it. PwC’s 2018 hotel forecast reported that, branded budget chains were still a key driver, accounting for over 40% of the UK active pipeline.

At the same time, in London and the wider UK, the continued increase in new branded budget supply had been a factor in the midscale/economy market underperformance in the first half of last year. As the Premier Inn and Travelodge look to spread their scope and maintain growth, the question will be what they consume to feed their expansion as supply puts performance under pressure: the independents or themselves?

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