Exclusive Feature: Not too long ago, a night in a chic hotel in the center of most cities often would have meant one thing: a big bill, but with the rise of budget design hotels, many hotel guests can now enjoy a chic design and a central location without blowing their budget.

Previously budget hotels were more often than not located on a city's outskirts far from the hustle and bustle of the center and the location's trendier districts. Basic, bland furnishings were the order of the day.

Recently, however, there's been a surge in budget hotels with contemporary interior design that are often in some of the most sought-after areas of the city.

The market segment is booming and has huge growth potential, according to Munich-based hotel consultancy firm PFK, which expects 30 to 40 percent growth in the budget-design hotel sector over the next few years.

Currently, the biggest player on the German market is Ibis, says the German Hotel Association IHA, which represents 1,400 hotels in Germany.  Germany's Motel One chain, founded in Munich in 2000, has also been making an impact at home and abroad and now has around 44 hotels in its portfolio. In 2012, the company generated a turnover of around 175 million euros and had an average room occupancy rate of 73 percent.

Motel One's concept is a good service and "great design for little money". The chain offers rooms decked in the hotel's signature brown and turquoise colors for around 50 to 70 euros a night in inner-city locations.

Recently, the chain opened its first UK hotel, the Edinburgh Royal, on Edinburgh's busy Market Street. The building is a conversion of the original 16th and 18th century properties that once stood there and a room costs just 70 pounds a night.

In a recent interview with German newspaper, Frankfurter Allgemeine Zeitung, Motel One founder, Dieter Mueller, revealed his chain is opening a new premises in the expensive hotel mecca that is New York just a block away from the legendary Waldorf Astoria in the centre of Manhattan. Rooms will cost around 119 dollars a night.

Motel One keeps it cheap by eschewing anything guests don't really need.

"We stay away from most things that guests don't particularly want," Mueller told the German paper.

"That is apart from good materials, attractive design, a lounge with a living room atmosphere and a stylish hotel bar. The rooms are 16 square meters and we offer breakfast in the lobby – nothing more. There's no meeting room, no restaurant, no fitness studio."

Even retailers are entering the budget design hotel market. Last year Swedish furniture giant, Ikea, announced plans to create a chain of hotels offering "contemporary stylish design, approachable service and, most importantly, an affordable price". The chain, which it is developing with the US Marriot hotel group, is to be called Moxy and will see hotels open in Milan, Berlin, Frankfurt and London soon, according to website.

Unlike Motel One, Moxy's website indicates it will offer guests some superfluous frills, including complimentary computers, local brews and vintage wine.

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.

Jennifer Collins is a reporter based in Berlin, Germany. She previously worked as a local journalist and arts and culture editor in her home town of Dublin, Ireland and now works with journalists around the world as part of the international journalism organisation, Associated Reporters Abroad. Jennifer enjoys travelling slowly, mainly by train, sampling local street food and people-watching from cafes in far-flung lands.

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