Budget hotel chain Travelodge has slashed its room rates to as little as £10 for the next year.
Launching an all-out attack on competitor Premier Travel Inn, the chain announced £20m of price cuts, which will see 500,000 rooms available at £26 and a further 100,000 rooms for just £10.
Travelodge chief executive Grant Hearn said: "Budget hotels are about offering a quality night's sleep at a low price. Our competitors have lost sight of this - we will not."
The group said it could afford the lower prices after stripping £3m of costs from head office. Cuts include moving the group's headquarters to Thame, Oxfordshire, streamlining reservations and IT systems and making up to 250 redundancies.
A spokeswoman for Premier Travel Inn said: "We have significantly higher occupancy rates than Travelodge, a fact which makes us think customers believe we offer good value. We have no plans to cut prices."
Travelodge has also accelerated its expansion programme and will open nine hotels tomorrow (2 December).