Ikea Branches Out Into 'Budget Design' Hotels

Homeware and furnishings retailer Ikea is planning to build a budget hotel chain across Europe.

The Swedish company, best known for its flat-pack furniture, aims to create a range of "budget design" hotels at affordable prices.

It follows a trend for cheap-but-funky boutique accommodation such as Base2Stay in London, driven by low air fares and increasingly price-conscious business travellers.

Others include Germany's Motel One, citizenM in London, Amsterdam and Glasgow, and the Chic & Basic chain in Barcelona and Madrid.

Demand for stylish yet affordable rooms from austerity-hit business guests and leisure travellers is high and growing, according to Harald Muller, senior executive in the property division of Inter Ikea - the company that owns the Ikea brand and concept.

"Budget designer hotels is today the fastest developing hotel segment," he said.

Inter Ikea already owns a few hotels and has more in the works, but the new project will be its first chain and top its 26-acre home, office and hotel scheme around the Olympic Park in London.

The chain of 100 hotels, which is set to be launched across Europe including in Britain, Belgium, Austria, Germany, Holland and Poland, will not feature Ikea flat-pack furniture nor its brand name.

Mr Muller said: "It is not an Ikea hotel. It's a continuation of our normal investment activities in real estate."