Posted by Mark J. Miller on August 16, 2012 10:03 AM
Europe’s financial difficulties continue and consumers are counting their Euros. Such a situation doesn’t bode well for the travel industry, which is why budget hotels have started popping up all over the continent and consumers that are actually traveling are using them more than they used to.
Budget hotel sales figures in 2011 were up 10 percent, Reuters notes, which means it was eating up 41 percent of the $162.5 billion European hotel market.
That kind of cash has enticed some folks to get into the budget-hotel biz or spread their brand. Germany’s Motel One is moving into the UK, Belgium, and Austria. Travelodge, which already has more than 500 hotels in Europe, opened four in London in July and is planning to open nine more in Europe before year’s end.
So guess who is jumping in to see if they can make it in a now-saturated market? Ikea. That’s right, the world's biggest furniture maker will now have a place to show off all the Billy bookcases, Grundtal sink bases, and Dagstorp couches it wants to the travelers of Europe — and those itching to live in an Ikea.
The plan, according to the Financial Times, is to build at least 100 "budget design" hotels across Europe. But don't expect an Allen Key instead of a room key so you can literally make your own bed. While luxury brands such as Bulgari and Lamborghini are putting their brand names on their respective hotels, the Swedish company is shying away from putting its brand on their hotel chain. Instead, they will be run “by an established hotel operator,” the FT reports.
That said, Ikea parent Inter Ikea will be calling the shots, and plans to only place the hotels in markets that it is already in and understands — a concept it's already tested with a hotel in the Netherlands. Another part of the planned brand extension, the FT notes, is to build student residences across Europe “as it looks for ways to put its cash into long-term businesses in an attempt to earn a good return.”