Is it worth investing in budget hotels?

3 min reading time

Published on 22/08/22 - Updated on 11/05/23

B&B Hotels

Low price elasticty but products easier to manage? One where brand image can sometimes be negatively perceived by customers, but the development of totally innovative offers is rife? The budget hotel sector is quietly undergoing a revolution. However, this does not prevent certain historical players from maintaining a growth rate that would make many brands green with envy. Fabrice Collet, CEO of B&B Hotels, will share his vision and analysis of the sector at the Hospitality Asset Forum on 21st November.

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The performance of these asset types during the Covid-19 crisis merits further discussion at the Hospitality Asset Forum. While a significant portion of the European hotel supply struggled to fill its properties, budget hotels were able to capitalise on a more local clientele and maintain a service for corporate clients who needed to travel for business despite the restrictions. Leisure and corporate customers, young and old travellers, individuals and groups have turned to offers that are easier on their wallets.

At a time when inflation is on everyone's lips, how long will this state of affairs last? How to maintain asset profitability when the operator has little room for manoeuvre on the increase of their average prices? What makes a good budget product? Have the codes of the sector really evolved and what are the impacts on the assets and their profitability?

The economy and budget segments alone represent more than half of the hotel offer in France. This offer is in total mutation with hybrid products in full development. Operators, as well as investors and managers, have taken over the hostel offer, adding services that make it possible to offer product profiles that are less vulnerable to the volatility of customers.

B&B Hotel has been able to stay on course for many years, as demonstrated by the steady growth of its portfolio, which doubled between 2015 and 2022. The French chain arrived in the European top 10 in 2020 and has remained there ever since.

The latest announcements with investor Covivio demonstrate the attractiveness of the product to investors. The question now is: how can it remain a competitive and attractive investment product?

You can meet Fabrice Collet at the Hospitality Asset Forum on 21st November, where these issues will be discussed.



Hotel Group

  • B&B HOTELS France
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