Budget hotels have seen a boom in the market with a growth of 38% in the past five years.
According to research company Mintel, the value of the sector has now reached £1 billion with 85,000 hotel rooms in the UK alone.
It is expected to continuing rising to £1.5 billion by 2012.
Mintel puts the increase down to the desire for people to take more short breaks throughout the year and future growth will be driven by the 2012 Olympics.
Senior travel analyst Richard Cope said: “The Brit’s desire for taking several short breaks a year, independent booking and paying for guaranteed basics has seen budget hotels surge in popularity.”
The overall hotel market has grown 12% in the same four-year period to £11.2 billion.