IKEA plans to launch hotel chain in Europe

IKEA, better known the world over as the largest furniture retailer, has plans for a budget hotel chain across Europe, in a bid to leverage a trend for cheap-but-cool accommodation driven by low airfares and increasingly price-conscious business travellers.

The 100 hotels, which would have nothing to do with its flat-pack furniture nor its brand name, would represent the company's biggest real estate development to date.

According to Harald Muller, senior executive at the property unit of Inter IKEA, demand for stylish yet affordable rooms in an austerity-hit business environment with leisure traveller numbers is high and growing.

Budget designer hotels was currently the fastest developing hotel segment, he added.

Motel One, citizenM and B&B Hotels all belonged to a new breed challenging established budget brands such as Travelodge, Whitbread's Premier Inn and Accor's Formule 1.

IKEA's first hotel is likely to open in Germany in 2014 and the chain would be run by an international hotel operator, according to Muller.