Budget hotels: not just minor hospitality products.

Abstract This paper analyses budget hotels from the strategic perspective. The author argues that these hotels represent an innovative hospitality product concept and that the key to their commercial success lies in a purpose-designed service product formula. Budget hotels are considered the result of sound strategic management decisions in the international hospitality industry, and are seen as a product that is giving hotel organizations considerable growth opportunities, both in domestic and international markets, by expansion in a new market segment. Finally, it is argued that the budget hotel product concept offers more value for money to the new value-conscious travellers, and why the product is proving particularly successful in pulling customers down from the full-service segment, and up from inexpensive accommodation is highlighted.