What changes have been seen in the budget sector in the past 10 years?
The budget sector has been booming over the past decade. Demand for quality and affordable accommodation has risen particularly due to an increase in the middle-class population in the Asia-Pacific region and Africa. Looking at Europe, many economies were adversely affected by the financial and Eurozone debt crisis and with the fall in disposable consumer incomes, demand for affordable accommodation has risen. We have seen significant growth in the Premier Inn brand in the UK as consumers demand consistent quality and great value for money. There’s also an increased focus on innovation and technology such as our partnership with Amazon lockers in the UK and making the online booking process as easy as possible.
Why has Premier Inn been so successful in the UK?
Our own unique approach is a focus on a vertically-integrated and asset-backed strategy. That means we prefer developing, owning and managing our properties. This gives us better control to create exactly the kind of product and services we want to offer as well as the ability to make quick adjustments. As a fully integrated brand, we are able to own the entire value chain of the hotel. That means we can pass on cost savings directly to our guests and refurbish or extend hotels to deliver the quality and value that our guests demand.
Where does future growth lie? (eg. in super budget?)
For Premier Inn we see the best growth opportunity in the German market at the moment. The German hotel market is 35% larger than our home market in the UK. It is similar to the UK ten years ago in that it is experiencing a structural shift from independent to branded hotels. The branded budget hotel sector is the fastest beneficiary of this shift, but still only represents a small market share. We are on our way to creating a business of scale in this attractive market, with nearly 50 hotels with over 8,000 rooms in 15 cities already secured. 2020 will be a transformational year as we will open over 20 hotels in Germany, establishing our brand in a number of key cities.
How important is booking direct to the sector?
Premier Inn focuses on direct bookings and that has been paying off – not just for us but also for our guests. It means that we can communicate directly with our guests and we have an easier time keeping competitive rates and are at the same time able to retain more revenue to invest in our hotels. This ensures we can deliver a consistently good quality experience for our guests.
How can budget brands deliver on consumer demands for greater personalisation?
We believe that the human factor makes for the best personal experiences. While our rooms are consistent so that travelers know the kind of quality they can expect, our staff are what makes the difference. We are looking for people with a sincere drive to make our guests’ experience special and always prefer hiring people with the right attitude and personality, even if they have no professional experience in the hotel industry. We then invest in training for skills and career development.