Whitbread targets budget-conscious with mini-room hotels

Reuters, Tuesday 2 Jul 2013

UK's largest hotel operator targets tight budget customer by offering new hub hotels with 11.4 square metres rooms

Whitbread said on Tuesday it was targeting customers on tight budgets with "hub" hotels offering rooms about half the size of those at its Premier Inn hotels and about 30 percent cheaper.

Whitbread said in April that it wants to increase the number of UK rooms at Premier Inn - Britain's biggest budget chain - by 45 percent to 75,000 by 2018, with a focus on central London. It said 3,000 of the mini-rooms were included in its 2018 forecast.

"Hub" hotel rooms in central London - where Whitbread has just six percent of the market - will be 11.4 square metres.

Whitbread plans to open five sites in central London over three years, with about 40 hotels, or 6,000 rooms opening or planned by 2018. Its first opens in London next year.

Rooms will include a desk that folds away into the double bed, and guests can check in on an app and can tailor details including choosing which TV channel is on when they arrive.

The hotels have 25 percent lower build and operating costs than central London Premier Inn hotels, Whitbread said.

The firm, which will also open some hubs in Edinburgh, said starting prices for a room in central London will be about 59 pounds ($90), with the average room rate to be below 100 pounds.

The owner of the Costa Coffee chain has expanded rapidly in recent years on growing demand for more affordable hotels during the economic downturn and for takeaway coffee. Its shares, down 0.8 percent by 10:10 GMT, have risen 56 percent in the last year.

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