Posted inComment

Why hoteliers operating budget hotels don’t get the respect they deserve

This month's anonymous columnist says bigger isn't always better

by Secret Hotelier

There is no denying that the regional hotel industry is booming. But, despite the number of new luxury hotels opening, there is still a place in the market for budget places to stay. Many people don’t always want to shell out thousands of dirhams for a night away. Of course, there is a prominent place in the Middle East market for luxury brands, with many high-net worth individuals flocking to the region for its great weather and fantastic hospitality standards. But in my experience as a general manager who has ran three-star, four-star and five-star properties, I believe that the real work goes into elevating something on a budget. I think that it’s the casual hotel destinations that people go to time and time again for a comfortable stay that does not break the bank.

Budget doesn’t mean basic

Budget hotels, which should not be confused with “basic hotels” especially in Dubai, offer sleek furniture, modern art, free wi-fi and Instagrammable breakfasts made with locally-sourced ingredients. In fact, budget hotels are so in demand, that over the last few years, local luxury brands have launched a budget arm to capture that market segment. With three-star versions of their five-star hotels, these properties have actually raised the bar and become buzzing neighbourhood destinations.

Sure, they are not the hotels starring in tourism advertisements and brochures, but these new breeds of budget properties appeal to younger travellers or locally-based families looking to get more for their money. Although the economy these days is in a much stronger position post-pandemic, more affordable hotel stays have become the new norm. I have noticed that many guests are reluctant to go back to spending a higher price point for a stay.

Cheaper to run

Budget hotels are popular with operators as they cost less to build and run. With the check-in and check-out function becoming increasingly automated, the cost of running a budget property is relatively low these days. Moreover, the economies of scale end up paying off. However, the expectations for good service and amenities are still high. It is clear to me that guests want more perks despite the low room rate. So in order to avoid bad reviews, we cater to those needs to the best of our abilities while also trying to stay within budget. Mid-range hotels appeal to all segments.

Holidaymakers want the best, but at a decent price. Something that’s affordable for the whole family. Business travellers are also looking to get more for their money, which creates a real opportunity for this corner of the market.

The low-cost and mid-range sector also continues to be popular with both leisure and corporate guests, who appreciate an emphasis on the basic necessities. In the next few weeks two, three and four-star properties will be bursting at the seams as hundreds of thousands of people from around the world fly in to attend the biggest sporting event in the region. In a city like Dubai, which is known for its five-star and luxury hotel options, I am happy to see that budget hotels have managed to convince quite a few to go a little more basic.