Budget Hotels Market Report 2026

The budget hotels market size has grown strongly in recent years. It will grow from $299.14 billion in 2025 to $315.02 billion in 2026 at a compound annual growth rate (CAGR) of 5.3%. The growth in the historic period can be attributed to growing tourism activities, rising business travel demand, expansion of hospitality infrastructure, increasing popularity of economical lodging, growth in travel accessibility.

The budget hotels market size is expected to see strong growth in the next few years. It will grow to $385.15 billion in 2030 at a compound annual growth rate (CAGR) of 5.2%. The growth in the forecast period can be attributed to rising budget travel preference, increasing online booking penetration, expanding budget hotel networks, growing focus on value based hospitality, strengthening domestic and international travel. Major trends in the forecast period include increasing demand for affordable travel accommodation, rising popularity of online hotel booking platforms, growing focus on essential comfort and convenience offerings, expansion of budget hotel chains in emerging regions, strengthening demand from cost-conscious travelers.

The increasing travel and tourism activity is expected to propel the growth of the budget hotel market going forward. Travel and tourism refer to the activities of people traveling away from their usual environment for leisure, business, or other purposes, along with the industries that support and facilitate these activities. The demand for travel and tourism is rising due to increasing disposable incomes, improved global connectivity, and a growing desire for unique experiences and cultural exploration. Budget hotels play a crucial role in travel and tourism by providing affordable accommodation options, making travel more accessible and inclusive for a wider range of travelers. For instance, in May 2024, according to the Office for National Statistics, a UK-based national statistical institute, the UK recorded 38 million overseas visitor trips in 2023, up from 31.2 million in 2022. These visitors spent $39.95 billion (£31.1 billion), an increase of $5.91 billion (£4.6 billion) compared to the previous year. Therefore, the increasing travel and tourism activity is driving the growth of the budget hotel market.

Major companies in the budget hotel market have been focusing on integrating large language model technology to enhance customer service and improve operational efficiency. Large language model technology involves advanced AI systems capable of understanding and generating human-like text based on extensive data. For example, in June 2023, Booking Holdings Inc., a US-based provider of online travel and related services, introduced a new AI Trip Planner. This tool features a conversational interface that allows travelers to ask questions, seek inspiration, and refine their searches in real-time. It offers personalized recommendations for destinations and accommodations based on individual preferences and enables users to create detailed itineraries for various cities, countries, or regions. Integrated with the Booking.com app, the tool displays pricing and provides direct links to accommodation details, allowing users to book recommended options with a single tap.

In February 2024, Travelodge Hotels Limited, a UK-based hospitality company, acquired 66 hotels from LXi REIT for $266 million. This acquisition, which includes hotels across London, the Midlands, and Northern England, allows Travelodge to gain greater control over these assets, enhancing value creation. LXi REIT is a UK-based closed-end real estate investment company.

Major companies operating in the budget hotels market report are Holiday Inn Express, Whitbread PLC, Choice Hotels International, Extended Stay America Inc., Premier Inn Limited, Travelodge Hotels Ltd, Red Roof Franchising LLC, Oravel Stays Limited, Toyoko Inn Co. Ltd., Econo Lodges of America Inc., B&B HOTELS Group, G6 Hospitality LLC, La Quinta Inns Inc., easyHotel, HotelF1, Future Inns UK Limited, Campanile Ltd, IBIS Hotel, Days Inns Worldwide Inc., Balladins Hotels.

North America was the largest region in the budget hotels market in 2025. The regions covered in the budget hotels market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the budget hotels market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The budget hotels market includes revenues earned by entities by providing services such as basic accommodation, front desk service, and standard amenities. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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