Budget hotels now face competition in hotel rates from 3 star hotels because of the rise in demand, especially in Asia. A recent survey by Hogg Robinson's Group (HRG), has stated that hotel rates across the world have risen by about 4 % in the first half of 2011.
The report states that hotel rates for budget hotels have risen by about 13 %, while hotel rates for 3 star hotels have only increased by about 3 %. This means that with all the add-ons like breakfast and WiFi, the hotel rates in budget hotels and 3 star hotels that include these in their cost are not very different. Hotel rates in Asia rose the highest, showing a growth of about 7 %, which is mainly due to concentration of hotel development and financial areas including Singapore and Hong Kong whereas Eastern Europe had a decline of 6.6 % in hotel rates, which was the highest regional rate decrease.

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