Major Force in the Budget Hotels Market 2025: Rising Travel And Tourism Drives Growth In The Budget Hotels Market

How Will the Budget Hotels Market Grow, and What Is the Projected Market Size?
There has been significant expansion in the market size of budget hotels in the recent past. Projected growth from 2024's $284.83 billion to $300.83 billion in 2025 depicts a compound annual growth rate (CAGR) of 5.6%. Factors contributing to this growth in the historical phase include a surge in demand for economical lodging alternatives amid economic slumps and uncertainties. Additionally, the restrictions on global travel imposed due to the pandemic have resulted in a spike in local travel. Online platforms have gained traction and the enhancement in the quality and diversity of services provided by budget hotels has made them more appealing to guests. Furthermore, the rise in cost-conscious business travellers has fuelled the demand for pocket-friendly accommodation.

The market size of budget hotels is projected to experience robust expansion in the ensuing years, with an anticipated valuation of $370.08 billion in 2029 and a compound annual growth rate (CAGR) of 5.3%. Factors fuelling the predicted growth during the forecast period include the persistent leaning towards budget hotels due to enduring economic hurdles and inflation, along with an increasing count of digital nomads pursuing economically viable extended stays in budget hotels. On top of that, a sustained emphasis on cleanliness and safety protocols continues to appeal to budget-centric travelers, coupled with a rise in solitary travelers and backpackers who prefer budget-friendly lodging. The shift towards more cost-effective accommodation alternatives by travelers seeking good value-for-money deals is another trend bolstering the market growth. Key trends to watch out for during this forecast period involve the employment of AI-based customer service, the amalgamation of local experiences, the emergence of chic and distinctive budget hotels, cutting-edge personalized technology, and the introduction of health and wellness facilities like gyms, healthy food choices, and wellness schemes.

What Is Driving the Growth Trajectory of the Budget Hotels Market?
The budget hotel market is set to expand due to a surge in travel and tourism. Travel and tourism involve people venturing outside of their regular environments for pleasure, business, or other reasons, and the industry that accommodates these ventures. The appeal of travel and tourism is on the rise, owing to increased disposable income, global connectivity and the growing appeal for unique experiences and cultural exploration. Budget hotels are leveraged by the tour and tourism sector to provide cost-effective lodging options for tourists, increasing accessibility and inclusivity of their journeys. For example, the Office for National Statistics in the UK, documented an increase in international visitors in May 2024, with 38.0 million trips compared to 31.2 million in 2023, an increment in visitor spending of $39.95 billion (£31.1 billion), a rise of $5.91 billion (£4.6 billion) from the previous year. Hence, the surge in travel and tourism will stimulate the growth of the budget hotel market.

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Who Are the Major Industry Players Fueling Budget Hotels Market Expansion?
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.

Which Key Developments Are Influencing the Budget Hotels Market?
Renowned entities in the budget hotel market have concentrated their efforts on incorporating large language model technology to improve customer service and streamline operational processes. This technology, a type of advanced AI that comprehends and produces text with a human-like quality, relies on analyzing massive data sets. An example of this occurred in June 2023 when Booking Holdings Inc., an American company that provides online travel services and related products, introduced a new AI Trip Planner. This innovative tool, equipped with a conversational user interface, permits travelers to ask inquiries, gain inspiration, and adjust their searches in real-time. Users receive individualized suggestions for destinations and lodgings based on their personal preferences, and can also create comprehensive plans for different cities, countries or regions. After merging with the Booking.com app, the tool reveals prices and offers links directly to information about accommodation, thus facilitating the booking process for recommended options through a single click.

How Is the Segmentation of the Budget Hotels Market Defined?
The budget hotels market covered in this report is segmented -

1) By Type: Business Hotels, Airport Hotels, Suite Hotels, Serviced Apartments, Resorts
2) By Amenities: Free Wi-Fi, Parking, Airport Shuttle, Breakfast
3) By Price Range: Economy, Mid-Range, Luxury
4) By Mode Of Booking: Online Travel Agency, Hotel Websites, Direct Booking, Other Modes Of Booking
5) By Application: Private, Commercial, Government

Subsegments:
1) By Business Hotels: Economy Business Hotels, Budget Corporate Hotels, Business Hotels With Conference Facilities
2) By Airport Hotels: Budget Airport Hotels (Transit Hotels), Economy Airport Hotels With Shuttle Services
3) By Suite Hotels: Budget All-Suite Hotels, Extended Stay Suite Hotels, Affordable Luxury Suite Hotels
4) By Serviced Apartments: Budget Serviced Apartments, Economy Extended Stay Apartments, Affordable Short-Term Rental Apartments
5) Resorts: Budget Beach Resorts, Affordable Mountain Resorts, Economy Wellness Resorts

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What Is the Leading Region in the Budget Hotels Market?
North America was the largest region in the budget hotels market in 2023. The regions covered in the budget hotels market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

What Is Covered In The Budget Hotels Global Market Report?

- Market Size Analysis: Analyze the Budget Hotels Market size by key regions, countries, product types, and applications.
- Market Segmentation Analysis: Identify various subsegments within the Budget Hotels Market for effective categorization.
- Key Player Focus: Focus on key players to define their market value, share, and competitive landscape.
- Growth Trends Analysis: Examine individual growth trends and prospects in the Market.
- Market Contribution: Evaluate contributions of different segments to the overall Budget Hotels Market growth.
- Growth Drivers: Detail key factors influencing market growth, including opportunities and drivers.
- Industry Challenges: Analyze challenges and risks affecting the Budget Hotels Market.
- Competitive Developments: Analyze competitive developments, such as expansions, agreements, and new product launches in the market.

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