If budget hotels continue to maintain profitability, they will continue to find ways of proliferating, irrespective of the difficulty in finding new sites. They will go to different places, appearing on mixed-use developments and in buildings where there has been a change of use, and be located in a wider variety of locations, including city centres.

Building costs will not hinder their expansion, as cheaper forms of construction and design are being utilised and new prefab products are improving. Banks are also warming towards the idea of funding such projects, with many leading banks getting more of an appetite for the hotel and leisure sector. The site purchase, construction and operation financing are all becoming much more sophisticated and imaginative, and the split between investor and operator is becoming more marked (note Travelodge's latest move to raise £400m through the sale and leaseback of its freehold estate).

Will a lack of demand stop them? No. There are only about 60,000 rooms available in this sector, and with two beds in each room that's only enough accommodation for each of us to stay for one night a year. If we want to stay longer, or if any overseas visitors stay, there wouldn't be any room at the inn. The demand for uniformly clean, cheap, en suite accommodation can only increase. Cheap flights are here to stay, which, accompanied by changes in work and leisure patterns, will only add to this need.

As the lodge companies get bigger, so their increased marketing will attract more business from the four-star sector and their pricing will tempt guests from a much broader base.

There is certainly more expansion on the way - watch out for an Accor or Cendant coming to a place near you.

Kevin Casserly 020 7636 8992