The value of the branded budget hotel sector in the UK has almost doubled in the last seven years.

A survey by TRI Hospitality Consulting shows that total room revenue rose from £504m in 2000 to £1,062m in 2006.

According to the report, almost four out of every ten business travellers have stayed in budget accommodation, showing a strong demand in this segment.

However, performance in the domestic budget hotel sector in London dips during August – the most important month for inbound tourism – indicating that although the sector has taken off with British travellers, international tourists are yet to catch on to the existence and benefits of staying budget.

In 2006, budget occupancy in London decreased from 83 per cent in July to 74 per cent in August, compared with 89 per cent and 86 per cent respectively for full-service hotels during the same period.

Deputy managing director Mark Dickens of TRI said: “The fall off in demand for London budget hotels in August clearly shows that UK budget brands are not fully recognised by inbound tourists and that the great proportion of demand in London is domestic and commercial in nature.”

Nevertheless, the budget brand looks set to expand as long as new sites can be found. It is likely that supermarket-owned land, sports stadia and university campuses could be increasingly targeted, following the successful launch of Sleeperz on railway-owned land, as well as easyHotel, nitenite and Yotel’s innovative approach to build windowless hotel rooms in a bid to limit space requirements in prime city centre mixed developments and non-utilised areas such as basements.