How big is the Budget Hotel Market | Size, Trends & Forecast to 2025

Q: How big is the budget hotel market?

The budget hotel market was estimated at USD 93 billion in 2024 and is predicted to reach USD 139 billion by 2031.

Q: What is driving the growth of the budget hotel market?

Increased domestic travel, online booking adoption, and affordability are driving growth of market.

Q: What are the key trends in the budget hotel industry?

Mobile-first services, dynamic pricing, and sustainability are primary trends.

Q: What are the major challenges faced by the budget hotel market?

High competition, fluctuating occupancy rates, and rising operational costs are major challenges.

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6W monitors the market across 60+ countries Globally, publishing an annual market outlook report that analyses trends, key drivers, Size, Volume, Revenue, opportunities, and market segments. This report offers comprehensive insights, helping businesses understand market dynamics and make informed decisions.

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Code: MTA5260

Publication Date: Jul 2025

What is the size of the Budget Hotel Market?

According to 6Wresearch internal database and industry insights, the Budget Hotel Market was estimated at USD 93 billion in 2024 and is predicted to reach USD 139 billion by 2031, growing at a CAGR of 5.9% during the forecast period 2025–2031.

Due to increasing number of cost-conscious travellers, rising domestic tourism, and the expansion of digital booking platforms worldwide, the market is projected for moderate growth in the future.

Key Growth Factors of the Budget Hotel Market

Growth in middle-class population and budget-conscious travel behaviour
Surge in domestic and short-haul tourism post-pandemic
Expansion of online travel agencies (OTAs) and digital booking platforms
Rising demand for affordable accommodation in urban and transit locations
Increasing preference for standardized, clean, and convenient stays

Budget Hotel Market Trends

The budget hotel market is positively influenced by major trends such as digital-first operations, including mobile check-ins and AI-powered customer service. Models which are franchise-based, are gaining traction for consistent service across locations. The focus is rising on eco-friendly and minimalistic designs to appeal to modern travellers. Further, the hybrid models are combining with co-living, hostels, and budget hotels are also emerging in urban markets.

Emerging Developments in the Budget Hotel Market

The budget hotel market is experiencing new developments with the rising adoption of smart room technologies, self-service kiosks, and contactless payments. The price of AI-based dynamic, is being used to optimize revenue and occupancy. Also, the budget hotels are forming partnerships with travel apps and loyalty platforms to improve reach and retention. Further, the sustainability initiatives such as energy-efficient lighting and reduced plastic usage are becoming key differentiators.