- Customers’ needs vary around the globe
- India hotel chain enter into partnership with HotelBids
- Revenue per room expected to grow 9%
In 2015, the budget hotel market industry grew globally because of an increased demand for affordable accommodations caused by a rise in the middle-class population in Asia-Pacific and Europe, says the GlobalData reports.
Different areas of the world have different hotel needs.
In Europe, the second largest budget hotel, Louver Hotels, partnered with China’s largest bank card provider, Union Pay. This partnership increased the number of French hotels accepting the Chinese Union Pay credit cards and eased Chinese tourists’ fear of carrying cash on French streets.
In Asia, there has been several investments in budget hotels. For example, in Thailand, the Petroleum Authority of Thailand plans 50 budget hotels at its 1,400 oil stations by 2021, and Hop Inn Ermita, a Thai budget hotel chain, plans 19 budget hotels in the Philippines by 2021.
In India, the online market is growing but only 20% of the total hotel inventory is available online. In 2015, online queries for budget hotels grew 179%, and accommodations grew 35%.
The world’s 1.8 billion Muslims are required to perform the Hajj in Mecca at least once in their lifetime. This keeps the demand for accommodations in Mecca, the largest hospitality market in Saudi Arabia, high since 75% of pilgrims stay in hotels.
Partnership Adds Budget Hotels
India’s third largest hotel chain Treeboo Hotels entered a partnership with HotelBids in February. The partnership will increase the number of budget hotels HotelBids offers by 250 and the number of cities in India to more than 100.
“This partnership will create immense opportunities for customers to get quality hotels through TREEBO’s well-established hotel network, while customers will get hotel stays at their price even for their last-minute bookings with unparalleled services of TREEBO.” HotelBids CEO Inder Sharma told Travel Daily News.
Treeboo has 6,000 rooms in 46 cities. It was founded in March 2015 by parent company Ruptub Solutions. Occupancy rates are 75%, according to co-founder Sidharth Gupta, and gross bookings are $55 million-$60 million.
This year, Treeboo plans to expand to 600 properties and to 1,300 properties in 2018.
Revenue to Grow
The revenue per room in India is forecasted to grow 9% during fiscal year 2018, according to ICRA.
Stronger demand as well as free trade and a market favorable to micro markets is fueling growth.
Occupancy and room rates grew 2% during fiscal year 2017.
- In 2015, in terms of room supply, the U.S. was first with 874,591 budget hotel rooms, followed by the UK and China. Malaysia was the fastest-growing market, increasing at a compound annual growth rate of 12.2%.
- In terms of occupancy rate, Hong Kong was first at 87%, followed by Japan and Singapore.
- In terms of revenue per available room, Hong Kong also topped this list at $117.60 per room, followed by Egypt and the UK.