Budget hotel chain Travelodge has kick started a price war by dropping the costs of 600,000 night’s stays in its hotel rooms to as little as £10 as part of a £20m aggressive new pricing strategy.

The group – which has 280 hotels in the UK – intends to put particular pressure on Whitbread’s Premier Travel Inn chain and aims to make it “cheaper to get a hotel than a cab home from the Christmas party”.

Travelodge has committed to offering 100,000 nights at £10 and a further 500,000 nights at £26 with substantial price cuts on other standard rates.

CEO Grant Hearn said: “Budget hotels are about offering a quality night’s sleep at a low price. Our competitors have lost sight of this – we will not. With our rivals constantly raising prices, we are now the only true budget hotel offer in the UK. Affordability and accessibility are what we are all about as we aim to make a hotel stay affordable for everyone.”

In response, a Whitbread spokesperson said: “We offer great value for money – compared to Travelodge, we’ve got more rooms and a completely different pricing policy.

“More people stay with us than with Travelodge so why would we need to do that [enter into a price war] when we already have a very good product with higher occupancy levels than Travelodge?”

Travelodge’s expansion plans will see the group add 2,750 rooms in 2006 and a further 3,000 rooms in 2007, bringing the total number of Travelodge rooms to more than 20,000. To support the strategy, the group has also stripped £3m from head office costs. Details: www.travelodge.co.uk