Cheap Chic: The rise of budget hotels

Lacklustre growth, a squeeze on real incomes and uncertain travel trends are all supporting the rise of budget hotels – and the budget boutique hotel – as business and leisure travellers seek to spend less without compromising on quality or amenities. Cathy Hayward reports

The UK hotel industry is booming – last year revenue per available room grew by around six per cent according to PWC’s UK Hotels Forecast 2018. Attracted by the fall in the value of sterling following the Brexit vote and a growing global economy, overseas visitors are flocking to London. Occupancy rates in the capital have averaged 80 per cent since 2006, but the rise of the budget hotel – typically with a higher occupancy rate – has seen that increase to 83 per cent last year. The branded budget chains are a key driver accounting for more than 40 per cent of the UK active pipeline for new rooms this year. PWC’s report confirms the ongoing structural supply shift towards more affordable rooms, as new contenders seek to redefine expectations of ‘budget’ rooms.

But there’s a stark difference between ‘budget’ and ‘basic’ these days in the UK hotel sector, says Jonathan Stephens, MD of property investment manager Surrenden Invest. ‘Chic furnishings, free Wi-Fi, sumptuous breakfasts... all of these are contributing to a new breed of budget boutique hotels that appeal to travellers looking to get more for their money.’

And the budget-boutique hotel appeals to all segments, he says. ‘Holidaymakers want the best, but at a decent price that’s affordable for the whole family. Business travellers are also looking to get more for their money, which has created a real opportunity for this corner of the hotel market.’

Moxy is a new budget-boutique brand designed for travellers looking for a fun hotel with a coherent experience but with a touch of luxury tooMoxy is a new budget-boutique brand designed for travellers looking for a fun hotel with a coherent experience but with a touch of luxury too

Glen Wilson, channel manager, hotels and hospitality at Grohe UK argues that it’s often younger customers who are particularly attracted to budget-boutique hotels. ‘They desire the luxury experience but don’t have the budget to spend. Budget hotels are adapting to suit this new audience by trying to emulate the amenities, decor and added touches of more luxury hotels.’ Many younger guests are happy to save by using budget airlines but won’t compromise on their hotel.

Not everybody wants (or can afford) a top-end hotel, agrees Harriet Forde, president-elect of the British Institute of Interior Design: ‘Small independent hotels that have reputation for being design-led with good, thoughtful service, but not at the top end of the price range, are very appealing to all sectors of the market.’ They can afford to be individual and provide a unique experience. The facilities and food offering may not be nearly as extensive but what they do provide is done well with great thought, and for that they get their reputation. Forde cites the example of Brocco on the Park, a budget boutique hotel in Sheffield, as an example of this trend. The hotel has eight individually designed bedrooms (called charming names like Owl’s Burrow and Woodpecker’s Roost) and a shared neighbourhood kitchen.

Budget-boutique Moxy. Some travellers seek boutique-budget hotels out: ‘It’s a more personal experience than staying in a major chain’Budget-boutique Moxy. Some travellers seek boutique-budget hotels out: ‘It’s a more personal experience than staying in a major chain’

Clearly budget is an issue for many budget-boutique guests, but for Greg Keffer, partner at Rockwell Group, it’s less about money and more about experience. ‘Modern travellers value experience and community over opulence and material possessions,’ he argues. ‘They seek authentic experiences that are rooted in time and place, and hospitality is beginning to reflect that. For us, design is about expressing the client’s narrative and exploring the feeling, spirit, and mood of how people will inhabit the space.”

Moxy is a great example of a new budget boutique brand designed for travellers who want a hotel to be a fun and coherent experience but with a touch of luxury. Rockwell designed three key amenities for Moxy Times Square in New York: Egghead, a compact fast casual spot; Legasea, a warm, intimate seafood brasserie; and the Magic Hour, a rooftop bar and lounge inspired by classic amusement parks.

Keffer is currently working on Moxy Chelsea, which opens this autumn. Tucked into the bustle of Manhattan’s historic Flower District, the botanically inspired design concept and crafted romance is seen through a thoroughly modern lens – all for those on a tight(er) budget.

For experienced traveller Esme Banks Marr, budget boutique hotels are her destination of choice. ‘Independent budget-boutique hotels give you a real feel for the city you’re staying in. It’s a more personal experience than staying in a major chain – the attention from staff is far better, they are often positioned in more interesting “local” districts, and it’s more of a home from home. It’s what I call affordable luxury.’ Banks Marr has stayed everywhere from nunneries, prisons, barns and large Victorian houses that have been converted into budget-boutique hotels, and says the design itself is often more thought-provoking than some of the high-end chains.

Interior detail from one of the hotels in the budget-boutique chain MoxyInterior detail from one of the hotels in the budget-boutique chain Moxy

The rise of AirBnB, and its ability to enable guests to live like a local, is no doubt fuelling the rise and rise of budget-boutique hotels. The concept itself might feel like an oxymoron, but google budget-boutique hotels and you’ll be overwhelmed with results. Promises of superb service, luxury linen, romantic rooms, good wifi, buzzing bars, and certified chic – all for often under £100 a night.

All of which proves that it’s possible to have luxe for less.

Hotel 52 Stanley

A newly-opened affordable boutique hotel, Hotel 52 Stanley, is an example of the budget boutique trend. Nestled between Durham and Newcastle, in the former mining community of Stanley, the hotel offers exceptional style at a budget price.

Hotel 52 Stanley

Hotel 52 Stanley underwent a £1.5m renovation and now offers elegant rooms at affordable rates, with the adjacent, well-regarded Pazzo restaurant hosting lavish breakfasts and offering a wide range of lunch and dinner options. There’s also a cocktail menu, which is proving particularly popular with holidaymakers looking to unwind after a long day of sightseeing.

Hotel 52 Stanley has cause to delight investors as well as guests. The hotel’s 23 apartments include doubles, twins, triples and family suites (all of which come with a fully equipped kitchen), meaning that there is an excellent range of price points to choose from....

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