Dacia always had a reputation as an ugly, cheap car brand from Romania. The main reason someone would buy one was the price. Buyers were extremely price-sensitive and had no taste.
The brand did something unexpected in recent years.
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Around 2021, they hired top designers and brand directors from other car companies and completely repositioned the brand.
They rebranded “cheap” as “essential” and “smart,” while elevating the brand with a new logo, bold geometry, earth tones, and outdoor positioning.
It stayed cheap but now it's also “desirable.”
Why does a budget brand need to look cheap?
I think hospitality has a similar opportunity.
I’m thinking about brands like Ibis Budget in Europe or Motel 6 in the US. I’ve spent quite a few nights in both, and they scream at you that you’re broke.
They are "designed" in Excel.
It’s not so hard to make design decisions that make a budget hotel feel premium. The service is still zero, everything is automated and breakfast is trash. But the rest of the experience has some taste.
Some micro-room and capsule hotels are good examples of this approach.
This would open up a much bigger market of people who like convenience, prefer not to spend much money (but can), and would like to stay somewhere with a cool vibe. And don't want to go to hostels or use Airbnb.
The quality of 4-star hotels has gone down
I would prefer a cool, convenient 3-star hotel over a mediocre 4-star hotel. Hotels are following the enshittification of airlines that started about 10 years ago.
Now, apart from a few brands like Emirates, every airline has copied Ryanair’s strategies: unbundling everything and upselling you. I find it ridiculous that KLM is charging for hand luggage, but that’s the reality.
There will obviously be more demand for true luxury (everyone is looking up there now), but as I said, an opportunity is opening up at the other end of the market too.
The largest companies don’t focus on it
When you look at the brands of the largest companies, like Marriott and Accor, you can see that they have very few budget brands.
Once they invest a bit in design, branding, or a concept, they automatically want to make it a bit more upscale (at least 4 stars; example: Moxy).
I believe AI will bring socioeconomic changes like higher unemployment, fewer white-collar jobs, and a smaller middle class, but also more free time, including for travel. 4-star hotels will have a very hard time.
So a Dacia hotel might be very well positioned for the next 20 years.
Who is building it? Let me know if I can invest 👀
