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Thu 24 May 2007 01:43 PM

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Room to improve budget hotels

Business traveller survey reveals huge potential for the 'limited service' hotel sector.

Some 32% of business travellers in the Middle East still use a travel agent as their first point of call when booking a hotel, a recent guest survey has revealed.

A further 22% rely on recommendations from friends and family, 18% refer to a company list, 14% use a tourist guide and the remaining 14% use an internet search engine, proving that traditional channels are still the most popular in the Middle East.

The information was revealed at a talk entitled The Evolution of Limited Service Hotels in the Middle East, which discussed the results of BDRC Hotel Guest Surveys 2006/7, led by Dr. Crispin Tarrant, the company's CEO.

Leading players from four hotel groups - Premier Travel Inn, easyGroup, Accor Middle East and Wyndham - joined the discussion to illustrate the huge potential for limited service hotels to win over market share from business travellers in the Middle East.

The limited service, or budget, sector currently commands just 1.2% of the market share in nightly hotel rooms booked by the region's business travellers, while the mid-market sector, defined by brands like Holiday Inn, Novotel and Ramada, represents 19.8%.

Tarrant noted that the absence of branded budget hotels in the region was reflected in their tiny share of all nightly business bookings.

Around 12.4% of the 17,231 business nights accounted for in the survey were spent in luxury properties, while 58.7% fell into the upscale category, typified by brands like Hilton, Sheraton and Marriott.

According to the survey, the Middle East has the lowest percentage of customers using the internet to book travel, the most common reservations channel for limited service hotels, but Tarrant said there were signs this was changing.

Meanwhile, Coral International Hotels, Resorts and Spas has jumped on the budget hotel bandwagon and revealed plans to roll out a new no-frills chain.

Ecos Hotels will fit into the new low-cost, low investment category being introduced to the region by the likes of easyHotels and Premiere Travel Inn.

"There's an urgent need to address the soaring demand for budget hotels in not just the UAE, but the entire Middle East," said Ecos Hotels director Ralph Noblet.

The brand will be promoted as an "economically sensible and environmentally responsible" two-star chain, with prices starting from "much less that US $100 per night", according to Noblet.

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