A fall in occupancy is a loss for five-star hotels and probably a gain for no-frills budget properties, as shrinking travel budgets of corporates mark a shift from luxury to budget hotels.

According to Raymond N Bickson, MD of Indian Hotels, in adverse times like this there is more and more need for value and it is the budget hotels that are doing exceptionally well.

Budget hotels have reported high occupancy rates as soon as companies started to cut travel costs of their executives in response to the general slowdown.

Easy on pocket, budget hotels usually are located around emerging industrial hubs in tier 1 and 2 cites and hotel chains like Ginger, Lemon Tree and Sarovar's Hometel charge about Rs 2,000 to Rs 5,000 a night.

“We are located in the IT and BPO hubs and have tie ups with companies like HSBC and Intel. Because of a situation like this, companies are forced to revise their travel policies which is a good thing for budget hotels,” said Rahul Nama, general manager, Hometel Hotels.

Five-star hotels like ITC grand Sheraton have halved tariff to Rs 16,000 and budget hotels are now filling up despite a slight increase in their tariffs as well.