Building better budget brands
Hotels, like any other real estate, are built to make money. And when you're talking about dollars per square foot or heads in beds, budget hotels are the way to go.
They're efficient, easy to manage, low cost to develop and will give you returns you'd never imagine possible in traditional hotel models. In order to successfully build budget brands here are some general points that can't go ignored:
- Do your research. It's critical to understand the nuances of your target customers so you can develop your product according to their current and future needs.
- Be consistent. Budget hotel customers are looking for hotel brands they identify as being consistent in look, feel, product, services, safety and security.
- Offer value for money & avoid gimmicks. Unlike top-tier hotels that charge for amenities and services, give your price sensitive customers basic amenities like WiFi and local phone calls free of charge. Don't waste your marketing dollars on being overly creative. Most travelers don't care for gimmicks that add zero value.
- Design efficiently. Be creative in your design and the use of light to make tiny rooms feel seemingly spacious.
- Find locations near major transportation hubs. Since mass market travelers often take public transportation, be sure to have well established properties with visible signage located near airport terminals, train stations, bus terminals and highway exits.
- Identify buildings you can convert. Converting existing buildings is by far the fastest and cheapest way to build and expand a portfolio of hotels.
- and lastly, enter the market with critical mass. The reality is that you probably aren't the only one looking to build a budget hotel brand, so becoming a household name amongst mass market and price sensitive travelers will be the key to market penetration and customer retention. One or 2 properties in the first year won't cut it for major cities. Thing big and shoot to have a pipeline that multiplies from 5 to 20 or even 50 in the short to medium term.
In brief: Do your research, be efficient, be different, and build fast.