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Web bookings fuel budget hotel growth

Accountancy firm Deloitte said 6,000 new budget hotel rooms were opened in 2003, compared to 4,500 during the year before. As a result, the study estimated there will be 75,000 rooms in branded budget hotels by the end of 2005, rising to 87,000 in 2007.

Deloitte said the accelerated demand for low priced hotel accommodation was being fuelled by the rising popularity of online booking. It found that 1 in 5 reservations were made via the internet last year compared to just 1 in 10 in 2001.

The recovery of the London market, hit in recent years by concerns over terrorism and the Sars virus, and continued development of the bed and breakfast sector were also driving growth. Deloitte's Nigel Bland said: "The budget hotels market has seen considerable changes in ownership over the last two years and in some markets tough trading conditions." "Despite this the operators remain confident and continue to sustain development growth far in excess of any other hotel sectors." In related news, a report from PKF claimed the overall hotel market was holding steady in the run-up to Christmas.

London hotels saw a 6% year on year rise in average room rate in October, while data for hotels outside the capital barely changed compared to the year before. As a result, PKF said hoteliers should look forward to a strong performance during the festive season.