The rise of the 3* hotel

Defying the bleak economic outlook and rising inflation, global consumers are bullish about travel plans. They’re willing to sacrifice other day-to-day expenses in favour of the respite and wellbeing-boost that holidays provide. But finding great value hotel stays is now their top priority. 

In the UK, 61% of people believe a holiday aids mental wellbeing (OnePoll, 2022). Meanwhile, in the US, Gen Xers and Boomers who follow a monthly budget still rank travel in their top three priority purchases, preferring to streamline expenses elsewhere (GWI, 2022).

Refusing to sacrifice travel, 68% of global consumers are monitoring how much they’re spending on their adventures, and 63% will seek deals to afford their vacations (Booking.com). It’s this concern over costs combined with the need to travel that is causing 3* hotels to boom. As travellers economise on travel, a fresh-wave of mid-tier hotels show that fewer stars needn’t mean neglecting aesthetics and amenities. Here are a few examples of hotel brands delivering the need for a great hotel stay for less.

MAMA Shelter

MAMA Shelter, which originated in France and now operators by Accor and Enismore, has six openings scheduled for 2023/2024, from Columbia to Dubai. On top of local inspired, art-filled interiors, they’ll house novel social spaces like karaoke rooms and an outdoor cinema.

MAMA Shelter is a place to live life to the full: it’s affordable, irreverent and sassy. In every hotel you’ll find exuberant interior decoration, homemade quality and year-round local happenings. Here, 3* doesn’t mean bland or boring.

Spark by Hilton

The 3* category isn’t just home to new(ish) entrants, as hotel giants are also eyeing up the market. Hilton has announced its first economy brand, earmarking 100 US locations that give motels a run for their money. Called ‘Spark by Hilton’ its core principles are ‘Thoughtful Simplicity’, ‘Reliable Service’, ‘Consistent Quality’ and ‘Unexpected Touches’ – the latter denoting perks like a complimentary bagel bar.

With the new hotels, Hilton are looking to shake up the economy hotel sector. They claim the Spark name “signifies the start of something great, a moment of ignition as we add energy and moment into the category”.

Adagio Access

Similarly, France-headquartered Accor is rolling out Adagio Access, a 3* “functional” aparthotel concept across EMEA this year.

The Adagio access range combines a city location, practical equipment and attractive prices. From studios to 2-room apartments, guests can choose from a wide range of fully furnished apartments that all offer fully equipped kitchens so they can avoid the cost of eating out for their entire stay.  Such self-catering developments will appeal to the 30% of frugal consumers who say they’re eating out less on trips (ABTA, 2022).

Lylo

Elsewhere, Australian conglomerate EVT launched hotel brand Lylo in December 2022, after “identifying a gap in the budget sector that caters to savvy, cost-conscious travellers looking for a style-led option with a social and value mindset”.

With the first outpost in Auckland, New Zealand, it offers multipurpose shared spaces (like kitchen and dining, reading, and working areas), sleeping pods, private rooms with shared bathrooms, and ensuite rooms.

Not only that, but all Lylo locations are built with recycled materials and use zero small plastics. We have recycling programs, water and power conservation initiatives, EV charging stations, and more, so you can stay enviro-conscious wherever you are. Meaning guests are spending less as well as harming the planet less. A win win.

Premier Inn

No 3* hotel list would be complete without Premier Inn, which has become synonymous with accessible and affordable hotel stays in the UK, with 72,000 rooms across 800 hotels. As one of the first mass-market UK hotel chains to advertise on TV, Premier Inn has become the go-to brand for many consumers, working hard to instil a sense of both familiarity and confidence in consumers. Its ‘great night’s sleep guaranteed’ pledge has helped the brand go above and beyond the promise of convenience or value to offer something that all consumers crave from a night in a hotel – real comfort and a sense that it is a home away from home.

Premier Inn continually invest in improving their hotels and experience for guests. Recently, this has involved the development of their new integrated ground floor concept, ‘The Social,’ which we have been shaping since last year and recently launched at their Manchester Piccadilly, Cardiff North, and Cardiff City Centre hotels. On top of this, we’re also developing some other exciting new innovations for the brand which are due to launch in the near future and will further improve the guest experience. Watch this space for more updates soon!

Does your business currently have a mid-market gap in its portfolio? It may be time to start thinking about what the 3* opportunity looks like for you.