Look out YHA, here comes Travelodge

With the announcement today that Travelodge plan to open a new hotel
every nine days for the next decade, YHA will be facing even stiffer
competition as the company moves into towns previously not served by
budget hotels.

The idea is to follow the no-frills airlines marketing model by
creating demand where it didn't previously exist. As private rooms at
hostels cost just as much, if not more, than a Travelodge room for a
family of four, YHA might find it even harder to compete in the
future, especially now they've closed so many of their countryside
hostels.

On 21 May, 13:05, Jacki <j...@pr-photo.net> wrote:
> With the announcement today that Travelodge plan to open a new hotel
> every nine days for the next decade, YHA will be facing even stiffer
> competition as the company moves into towns previously not served by
> budget hotels.
>
> The idea is to follow the no-frills airlines marketing model by
> creating demand where it didn't previously exist. As private rooms at
> hostels cost just as much, if not more, than a Travelodge room for a
> family of four, YHA might find it even harder to compete in the
> future, especially now they've closed so many of their countryside
> hostels.

I understood the 2006 strategy to be counting on "Families in towns/
cities" as a prime market for YHA, and this worried me enough to voice
a concern at the Manchester presentation meeting. I was heard
politely, but I didn't get the feeling that the penny had really
dropped.

For Travelodge, the main income stream in most locations will be from
Sunday-Thursday business customers. Beyond that, it is worth their
while cutting price to bring in families at weekends and during
holiday periods: as long as this extra business covers the marginal
costs of cleaning, lighting and wear-and-tear, then it is worth
taking. Thus the £26-per-night and £15-per-night deals that Travelodge
offer - and offer in serious numbers, not just as some impossible-to-
book headline rate. And when do they offer these deals? At weekends
and in the school holidays - which are the key times that a family is
free to travel. Despite my loyalties to YHA, in the last year, our
family has spent eight nights at £15 or £26 with Travelodge. In the
same period we spent one night with YHA and three nights with SYHA -
each of which cost at least £50 a night.

I understand why YHA costs more. By contrast with Travelodge, YHA
cannot afford to provide hostels where families pay only the marginal
costs of their stay - there is no equivalent of the business custom
that underpins Travelodge, so YHA need families also to make a
contribution to the non-variable costs (like staff, maintenance,
capital costs).

Sure, the YHA product is in many ways better - although the gap has
closed somewhat with the lesser emphasis on Members Kitchens, and the
increasing availability of modest-cost fresh food in city centres from
the likes of Tesco Metro and Sainsbury Local to allow the hard-up
family to assemble a decent meal to eat in their Travelodge room. But
faced with a price differential that is often 2:1 (and when we last
stayed in London, would have been over 5:1 - over £80 with YHA against
£15 at Travelodge) many families will make do with the Travelodge
product.

I am not advocating that YHA should pull out of the "families in towns/
cities" market - but I would be worried to learn that new hostels were
to be established with this market as their prime focus. Offering a
fully-cost-bearing product against a marginal-pricing competitor is
not a winning formula!

John Geddes

In article <1179749100.970819.212350@b40g2000prd.googlegroups .com>,
Jacki <jacki@pr-photo.net> writes
>With the announcement today that Travelodge plan to open a new hotel
>every nine days for the next decade, YHA will be facing even stiffer
>competition as the company moves into towns previously not served by
>budget hotels.
>
>The idea is to follow the no-frills airlines marketing model by
>creating demand where it didn't previously exist.

Does this mean we will get rooms for £0.19 + £50 tax, plus £5.00 extra
baggage charge + contribution towards disabled access.

> As private rooms at
>hostels cost just as much, if not more, than a Travelodge room for a
>family of four, YHA might find it even harder to compete in the
>future, especially now they've closed so many of their countryside
>hostels.
>
The YHA is a charity. Isn't this a bit like warning Mother Teresa (when
she was alive) that Travelodge are targetting the poor and homeless in
Calcutta and that she needs to be more competitive.
--
Ken

In article <1179759482.999696.298780@z28g2000prd.googlegroups .com>, John
Geddes <john@starmarkassociates.co.uk> writes
>On 21 May, 13:05, Jacki <j...@pr-photo.net> wrote:
>> With the announcement today that Travelodge plan to open a new hotel
>> every nine days for the next decade, YHA will be facing even stiffer
>> competition as the company moves into towns previously not served by
>> budget hotels.
>>
>> The idea is to follow the no-frills airlines marketing model by
>> creating demand where it didn't previously exist. As private rooms at
>> hostels cost just as much, if not more, than a Travelodge room for a
>> family of four, YHA might find it even harder to compete in the
>> future, especially now they've closed so many of their countryside
>> hostels.
>
>For Travelodge, the main income stream in most locations will be from
>Sunday-Thursday business customers.

Travelodge don't do single rooms. I've never particularly associated
business travel with shagging but.....

>
>John Geddes
>
>
>

--
Ken

	#1
Jacki	Look out YHA, here comes Travelodge With the announcement today that Travelodge plan to open a new hotel every nine days for the next decade, YHA will be facing even stiffer competition as the company moves into towns previously not served by budget hotels. The idea is to follow the no-frills airlines marketing model by creating demand where it didn't previously exist. As private rooms at hostels cost just as much, if not more, than a Travelodge room for a family of four, YHA might find it even harder to compete in the future, especially now they've closed so many of their countryside hostels.

	#2
John Geddes	Re: Look out YHA, here comes Travelodge On 21 May, 13:05, Jacki <j...@pr-photo.net> wrote: > With the announcement today that Travelodge plan to open a new hotel > every nine days for the next decade, YHA will be facing even stiffer > competition as the company moves into towns previously not served by > budget hotels. > > The idea is to follow the no-frills airlines marketing model by > creating demand where it didn't previously exist. As private rooms at > hostels cost just as much, if not more, than a Travelodge room for a > family of four, YHA might find it even harder to compete in the > future, especially now they've closed so many of their countryside > hostels. I understood the 2006 strategy to be counting on "Families in towns/ cities" as a prime market for YHA, and this worried me enough to voice a concern at the Manchester presentation meeting. I was heard politely, but I didn't get the feeling that the penny had really dropped. For Travelodge, the main income stream in most locations will be from Sunday-Thursday business customers. Beyond that, it is worth their while cutting price to bring in families at weekends and during holiday periods: as long as this extra business covers the marginal costs of cleaning, lighting and wear-and-tear, then it is worth taking. Thus the £26-per-night and £15-per-night deals that Travelodge offer - and offer in serious numbers, not just as some impossible-to- book headline rate. And when do they offer these deals? At weekends and in the school holidays - which are the key times that a family is free to travel. Despite my loyalties to YHA, in the last year, our family has spent eight nights at £15 or £26 with Travelodge. In the same period we spent one night with YHA and three nights with SYHA - each of which cost at least £50 a night. I understand why YHA costs more. By contrast with Travelodge, YHA cannot afford to provide hostels where families pay only the marginal costs of their stay - there is no equivalent of the business custom that underpins Travelodge, so YHA need families also to make a contribution to the non-variable costs (like staff, maintenance, capital costs). Sure, the YHA product is in many ways better - although the gap has closed somewhat with the lesser emphasis on Members Kitchens, and the increasing availability of modest-cost fresh food in city centres from the likes of Tesco Metro and Sainsbury Local to allow the hard-up family to assemble a decent meal to eat in their Travelodge room. But faced with a price differential that is often 2:1 (and when we last stayed in London, would have been over 5:1 - over £80 with YHA against £15 at Travelodge) many families will make do with the Travelodge product. I am not advocating that YHA should pull out of the "families in towns/ cities" market - but I would be worried to learn that new hostels were to be established with this market as their prime focus. Offering a fully-cost-bearing product against a marginal-pricing competitor is not a winning formula! John Geddes