According to a recent report by HVS, there are now four sub-categories of budget hotel. Among the ‘Ultra Budget’ brands are F1, easyHotel and Premiere Classe, the latter now planned for roll-out in the Gulf by Louvre Hotels affiliate, Golden Tulip. ‘Core Budget’ brands include Ibis and Premier Inn, while Holiday Inn Express is one of the ‘Upper Budget’ brands.
There is a cross category of ‘Design Budget’ brands that includes Yotel, which is owned by Kuwait’s IFA, but not yet present in our region. In Europe, Asia and the Americas, the public is already well accustomed to patronising these spartan budget hotels.
In the Middle East, we are relatively new to the game, but it appears these cheap options have already been a big hit. Such brands as Ibis and Express were essentially over-specified when launched in our region compared to the West and their cosy offer has evidently been appreciated.
Even the easyHotel in Jebel Ali has much larger rooms than other properties in the chain, as well as an excellent Italian restaurant that is far from brand standard. Both Centro and Citymax have emphasised attractive interior design, and the latter boasts multiple branded F&B outlets to boot, with a good local following.
My hotelier friends involved in Dubai’s branded budget market report not only excellent occupancies, but also that high demand has caused a new trend away from fixed prices towards rates of the day to achieve better yield management.
Many also comment that their car parks regularly feature their fair share of luxury vehicles, with one of these hotels having a permanent resident who drives a Porsche. It seems that the regional positioning of most budget brands at upper three-star level was definitely the right way to go, at least as far as this initial phase of the market’s maturing process.