The Rise of the 'Thrifty Rich' Consumer

28/10/2012 10:57 GMT | Updated 26/12/2012 10:12 GMT

The travel industry has a new and very significant audience to cater for. It's an audience that five years ago perhaps wouldn't have considered booking a 'budget' hotel but for whom now economising on various aspects including hotels and travel is essential.

The Porsche driver who flies Easyjet or the couple who enjoy fine restaurants but shop around to get the best grocery deals - these are the 'Thrifty Rich'.

Like all leisure sectors, travel is constantly evolving and improving. The greatest change in travel has been the dramatic development of the budget hotel sector. Today, 80% of the UK hotel market is focused on economy brands. Huge levels of investment over the last 10-15 years have boosted the economy segment's profile and businesses have developed to meet the rapidly growing demand for budget travel.

The vertical segmentation of luxury and budget no longer applies, the boundaries have been merged and people are using their purchasing power in a different way. The 'Thrifty Rich' consumer realises the benefit of no-fuss, budget, but comfortable and reliable travel, and understands this will help them save money for the bigger ticket items and experiences they want. Budget-led choices are part of the lifestyle choice in a way they never were before.

Consumer expectations have evolved significantly and now hotel brands must be able to project a self-enhancing image, offering contemporary, stylish service and surroundings. We have had to respond to changing demands from different and diverse types of consumers. Budget hotels are no longer uniform, plain and understated. They now use the latest affordable, attractive designs, offering comfort and quality at good prices.

We made the decision to revolutionise our economy brands in order to provide a concept to suit any consumer, including the 'Thrifty Rich'. We brought our All Seasons and Etap brands within one single ibis family - to create three economic concepts: ibis, ibis Styles and ibis budget. We now have an ibis to meet every customer's needs. The guest who wants straightforward comfort, good service in a simple and functional room will be perfect for ibis budget; the guest who wants greater independent style in trendy, chic surroundings and an all-inclusive price will stay at ibis Styles and finally, the guest who wants a full-service experience, modern design and the latest technology will stay in an ibis hotel.

Consumers have grown to expect so much more for their money. There is a de-segmentation happening in the market. Nowadays each category - whether budget, midscale, upscale, luxury - has to offer quality and enhanced service to ensure a great guest experience. This experience needs to be adaptable to the type of guest and the market in which it operates. We realised that we need to rethink some of our services and offerings in our economy hotels, to bring them above their market segment and meet changing consumer expectations.

For instance, our in-house engineers and scientific committee, featuring sleep experts and researchers, have spent months creating the perfect bed for our ibis hotels, drawing on 40 years of expertise. Known as 'Sweet Bed by ibis' it is the first time a hotel group has designed an entire bed. We recognise that our customers expect comfort and quality at any price and that is what we strive to achieve. Indeed our research has found that 70% of hotel guests say the bed is the most important part of their stay. Even our bed is representational of the changes within the segment - Sweet Bed by ibis features a topper, normally only found in luxury and upscale hotels.

The next 10 - 15 years will see continuous growth. Indeed, Accor UK has ambitious plans to grow to 300 hotels by 2015 and we expect that around half of this growth will come from our ibis family. To do this, we need to react and adapt quickly. That is why, in just one year, we have already rebranded our UK ibis network and installed new beds in all our hotels. Speed has enabled us to ensure we give our customers a consistent, quality experience.

Over the past few years there has been a huge growth in consumer tastes and preferences. As the dynamic cycle of consumer demand continues, so too will the economy sector continue to evolve. Room designs change, the demand for technology increases, the taste for hotel food will develop and public spaces will change roles. Guests are now smarter with how they spend their money and time. They want an affordable, comfortable holiday, and will spend on experiences - dinner, theatre, entertainment - that make their trips special. It is the job of the hotel sector to be receptive to the changing needs of their guests. The economy segment needs to compete on lifestyle, not just on price.