Europe: “There’s still a lot of potential for budget hotels“ | Hotel project developer GBI AG Reports

With altogether 17 hotels projects successfully accomplished, Berlin-based GBI AG is one of the leading German hotel developers and investors. Shortly before its 10th anniversary in early 2011, the company can boast of a multi-faceted portfolio, ranging from the 2-star budget design and the 4-star business city hotel to the Superior holiday resort. GBI (“Gesellschaft für Beteiligungen und Immobilienentwicklungen“/company for equity participation and property developments) is specialised mainly in the construction of hotels and also boarding houses plus apartment properties, acting either on its own or jointly with partners.

All GBI projects, representing a total volume of approximately €450 million, were successfully sold on or placed with other parties. With currently two hotels under construction and also the participation in the World Budget & Economy Congress in London in Mid-June, the subject “Budget Hotels” remains high on the agenda for GBI AG.

Budget Principle 2.0

For the CEO of GBI AG, Reiner Nittka, there is no end in sight yet for the boom of the budget segment. He still sees a “great potential” in this line of business. On the other hand, he feels that a “strategy adjustment” will be needed, observing that the ‘Budget Principle’ will have to embrace “a combination of budget hotel and boarding house, plus an extension of the public areas of the properties and of services” in order to be successful. The challenge would be to create the “intelligent” hotel, yet without leaving the framework of the budget sector.

GBI AG currently has two properties for the Munich-based hotel group Motel One under construction: the Motel One Berlin Spittelmarkt is scheduled for completion at the end of this year, the Motel One at Dresden’s Palaisplatz for early next year. In Mid-June, the CEO of GBI will attend the World Budget & Economy Congress in London to discuss the latest trends and developments with international fellow-experts.

Quality, Service and Ecology

More than just being a standardised product in a central location with a high number of rooms and low rates, budget hotels in future will show (still) more sense of value. In the words of Reiner Nittka: “Motel One, Ibis, Etap and also Penta already demonstrate this very clearly. They focus on higher-value and more durable quality materials, but they still stick to the budget-price concept”. GBI’s CEO also quotes the example of Austria’s “Har-ry’s Home” scheme, which is just about to penetrate the market with its individualised long-stay idea.

Still largely appearing as a mere practical and matter-of-fact check-in/check-out facility, the lobby area will gain in importance also in the case of the budget hotel: a clever bar and catering idea will prove to be an important competitive edge. Libraries, billiard tables and computer [games] can turn reception areas into “comfort zones” and “wellbeing” lob-bies.

Reiner Nittka is quite positive that ecological aspects are bound to impact on the future success of the segment: “Budget must implement ‘green’ policies if it wants to prevail in the market”. It is only at the first glance that ‘green’ and cost-efficient concepts appear to be incompatible. Responsible-minded action – also in the budget business – starts with essentials that are both economical and ecological, such as the use of waste water for flushing the toilets or water-saving taps and shower heads.