Forget luxury, economy hotels to take over Asia

By By Jane Leung, CNNGoUpdated 17th November 2011
Economy hotels from established brands offer stylish accommodations without a lot of extras.
Sure, luxury accommodation in Asia takes the headlines, but what about us regular folk who just want a decent bed before hiking in Berastagi?
Big hotel chains such as InterContinental, Swiss-Belhotel International and Accor have recently announced plans to build more than 350 economy and express hotels in various parts of Asia including China, India, Singapore, Malaysia, Philippines and Indonesia by the end of 2012.
Don't call the new breed budget hotels or hostels, which are usually in cheaper areas. High-end hotel companies that have "economy" brands are often higher quality, cleaner, chicer and closer to city centers.
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Post-recession business travelers are being more responsible with their money and hoteliers say young executives on the move are demanding high-quality hotels with fewer trimmings like business centers or rooftop pools.
"Business tourists prefer two- to three-star facilities because it's convenient -- they don't want to waste money on facilities they won't use," says Gavin Faull, president of Swiss-Belhotel International.
International Air Transport Association and Smith Travel Research also anticipated higher growth in business travel compared to leisure travel in the upcoming year, according to a report from Ernst & Young -- "Global Hospitality Insights: Top Thoughts for 2011."
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Global business travel spending is projected to grow 34 percent in four years, from US$896 billion in 2010 to US$1.2 trillion by 2014, with Asia, Latin America and the Middle East expected to grow faster than the current recovering economies of the United States and Europe, according to Ernst & Young's report.
Fewer frills, more savings
Much of the growth will be driven by the increased demand for economy hotels, which cost less than full-service hotels because guests pay only for basic amenities.
For example, a one-night weekend stay in November at a standard Holiday Inn Express in Hong Kong costs 20 percent less than a room at the full-service Holiday Inn Golden Mile, Hong Kong.
"[Express hotels are] everything you need and nothing you don't," says David Anderson, vice president at InterContinental Hotels.
And the strategy for no-frills, but decent, rooms is working. Revenue per room grew 15 percent in Asia-Pacific during 2010, while the United States saw about 7 percent growth, as reported by Ernst & Young.
"This growth [in the Asia-Pacific travel industry] is a complete reflection of domestic economy strength," says Evan Lewis, Accor's VP for Asia-Pacific communications.
For the regular non-business folk in Asia who just want to hit the beach on a nearby island over a weekend, this means more economy chains located in downtown cores.
So while the roach-infested hovels with views over the sewer will still be there for those who like to slum it, there are now cheap places in good areas to toss your luggage and explore the city --- without forcing yourself to use the pool or gym you didn't ask for.
Select economy hotels
Holiday Inn Express, 33 Sharp St. East, Causeway Bay, Hong Kong, +852 3558 6688, www.hiexpress.com
Hotel Ibis Shanghai, 858 Panyu Road, Xuhui, Shanghai, China, +86 21 6283 8800, www.ibishotel.com
Swiss-Inn Batam, Komplek Villa Idaman Baloi Batam 29432, Batam, Indonesia, +62 778 457 500