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5 reasons why you may be happier booking a budget hotel

May 30, 2022
8 min read
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Staying at a luxury hotel is often a top priority for travelers on vacation who have the funds. After all, it's where you'll get the best food, sheets and service, right? But what if we told you that staying in a budget hotel could make your trip more enjoyable?

Yes, there is scientific and psychological proof that not dropping all that cash on a luxe crash pad (even if you can afford it) may increase your happiness levels. In fact, there are plenty of travelers who seek out a budget option even if their bank accounts allow for a more lavish stay. But why?

We asked a board-certified behavior analyst and some thrifty globe-trotters to explain.

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Expectations are managed

You expect perfection when booking a $2,000-a-night stay at a Ritz-Carlton Reserve. However, it's easier to be pleasantly surprised with the accommodations when you book a cheap stay. That's because it boils down to managed expectations.

"Results from the study of peoples' happiness in relation to expectations have shown lower expectations correlate to experiencing happiness," board-certified behavior analyst Jessica Stephens told TPG. "This seems logical because novel but pleasant and unexpected surprises are quite likely to make us happy."

But why would modern luxuries and the myriad of customizable products at our fingertips make people in wealthy countries unhappy? It's because humans will habituate to ever-increasing standards of living (aka ever-increasing expectations), according to Stephens.

"After a time, we become bored with what we have and want more," Stephens said.

There seems to be somewhat of a formula when it comes to achieving optimal happiness. "The sweet zone is when we aspire for a little better, have moderate expectations based on past experiences and cap the intensity of our happiness (i.e., you won't be a billionaire overnight)," Stephens said. "Too little or too much of anything (expectations, money, etc.) causes subjects to perform suboptimally."

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So, when you book a budget hotel, you're not expecting the best of everything and therefore are happier with your choice.

Related: Bargain hotel rates unlikely this summer at typically affordable Choice Hotel brands

Vacations can be extended

There's no question hybrid and remote work are becoming much more of the norm, meaning getaways are not limited to just weekends and holidays. Now, workers are using flexible work arrangements to travel more. But just because they're traveling more doesn't mean they have more cash to spend. So if traveling is the main priority, staying in a budget hotel may be what's required to hit the road more often and for longer — and to be happier overall.

With the ability to work remotely, your trip can be extended easily. (Photo by Maskot/Getty Images)

"I've been traveling and working remotely in different countries for several weeks at a time since the pandemic," said public relations expert Adrianna Lauricella. "Now that I can work remotely, I seek out hotels or hostels where I can stay long term and easily work (with solid Wi-Fi) in a central location. But I also stick within a budget since I still pay rent for my NYC apartment."

"I'm not traveling to spend the days in a hotel room or at the hotel property," Lauricella added. "I'm there to work remotely during the week and explore and take in what the country/city offers on the weeknights and weekends. Budget hotels make more sense for longer stays because they allow me to explore more, which makes me happier."

Excess stuff can be distracting from the experience

We've all seen those luxury properties that tout they provide everything under the sun, from daily goat yoga to 17 pool options with water-misting butlers. But having too many choices can actually detract from enjoying the experience.

"Studies have revealed a happiness formula, which is influenced by expectations and the ability to compare choices," Stephens said. "We are happiest when we have choices, but not too many, and have some comparisons, but not too many."

Plus, all the options can be distracting, which takes away from the experience and, ultimately, your happiness.

"It's never about how much you spend on a hotel when traveling," Lauricella said. "While it's always nice to splurge and treat myself to a luxury hotel stay, I prefer to save that money and spend it on activities and experiences within the different places I travel."

Fellow traveler and United Kingdom native Oliver Coleman agreed, noting that the lack of stuff relieves stress and reminds him of how simplicity can equal happiness.

"I'm not a monk, and I don't know any monks, but I'll take a guess at why they famously don't have any stuff," Coleman said. "They probably think that not having stuff means that you are free from stuff, free from wanting stuff. So it's an appealing idea."

This notion is especially true when you travel without children, who inherently come with a lot of stuff.

"When I travel without my family, I love cheap hotels," Coleman said. "I love how much stuff they don't have. Where I see no pool, I see no hours trying to prevent [my child from] drowning or head injuries. When I see no restaurant, I see no — well, no eating with children. So I love the rare joy of reveling in how much stuff I don't need."

"To me, the happiest way of traveling is to arrive at a hotel room for which I paid $35 with a single duffle bag containing clothes, a quart of bourbon and a book," Coleman added.

Related: Quirky hotel amenities: TPG staff, readers share their favorites

Socializing is better

While there's no hard evidence to prove budget hotels are more fun, some travelers argue it's one of the reasons why they book them. And with more remote workers on the same mission, you face greater odds of finding kindred spirits at more affordable properties.

You may find some kindred spirits on your travels if you go a cheaper route. (Photo by Hinterhaus Productions/Getty Images)

"I find I have more fun in budget hotels, particularly hostels," Lauricella said. "The people staying at the hotels tend to be much more friendly and down-to-earth. As a solo traveler who works remotely, surrounding myself with people in the same mindset and who want to socialize is extremely important to me. Even staying in an Airbnb isn't nearly as fun."

"Hostel chains like Selina provide community events and co-working spaces so that you can get to know everyone at the property," she added. "Plus, you can still book private rooms at an affordable price."

You're saving money

This may seem like a given, but it has to be said. When you're saving money, your happiness increases.

In fact, people who save money report having an overall better state of well-being and dealing with less psychological distress, according to a study from the University of Arizona. Plus, when participants consumed less, it positively affected their mental health. Bedding down in a budget hotel has a similar effect.

"[Staying in a budget hotel] is perhaps the only opportunity I have in life to convert my experience into financial reward," Coleman said. For him, even if the hotel is truly subpar, with dirty sheets, "I'll sleep on towels and be lulled into a deep, peaceful sleep by the sound of nobody freaking out about the dirty sheets. And, like that, experience is converted directly into a couple of hundred dollars in cold hard bank account figures that I didn't spend somewhere nice."

Bottom line

While the savings are certainly a major draw to staying in a budget hotel, there are clearly several other benefits, too. In addition to having the ability to travel more and socialize with other like-minded travelers, you can better enjoy your stay without sweating the small stuff or focusing too much on all that's available to you.

To maximize your savings, consider paying for your stay with points. Depending on the accommodation you choose, you may also be eligible for complimentary extras if you have elite status in an affiliated hotel loyalty program. Take the savings a step further by using credit card points or miles to cover other aspects of your trip, such as flights and rental cars.

Related: TPG beginner's guide: Everything you need to know about points, miles, airlines and credit cards

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • This card comes with a long list of benefits, including access to Centurion Lounges, complimentary elite status with Hilton and Marriott, at least $500 in assorted annual statement credits and so much more. (Enrollment required for select benefits.)
  • The Amex Platinum comes with access to a premium concierge service that can help you with everything from booking hard-to-get reservations to finding destination guides to help you plan out your next getaway.

Cons

  • The high annual fee is only worth it if you’re taking full advantage of the card’s benefits. Seldom travelers may not get enough value to warrant the cost.
  • Outside of the current welcome bonus, you’re only earning higher rewards on specific airfare and hotel purchases, so it’s not a great card for other spending categories.
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  • Earn 80,000 Membership Rewards® points after you spend $6,000 on purchases on your new Card in your first 6 months of Card Membership. Apply and select your preferred metal Card design: classic Platinum Card®, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu.
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  • Get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings, which requires a minimum two-night stay, through American Express Travel when you pay with your Platinum Card®.
  • $240 Digital Entertainment Credit: Get up to $20 back each month on eligible purchases made with your Platinum Card® on one or more of the following: Audible, Disney+, The Disney Bundle, ESPN+, Hulu, Peacock, SiriusXM, and The New York Times. Enrollment required.
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  • American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. There are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year in baggage fees and more at one select qualifying airline.
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  • Terms Apply.
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Terms & restrictions apply. See rates & fees
Best luxury travel rewards card
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

5XEarn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year.
5XEarn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
  • Intro Offer
    Earn 80,000 Membership Rewards® points after you spend $6,000 on purchases on your new Card in your first 6 months of Card Membership.

    Earn 80,000 Points
  • Annual Fee

    $695
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

Sometimes it's worth a large investment to reap the benefits of a great credit card. That's exactly the case with the Amex Platinum card. In exchange for the annual fee, you'll unlock access to the Amex Membership Rewards program that let you access airline and hotel transfer partners, along with new lifestyle and travel credits. This card is also incredibly rewarding for travel purchases, helping you rack up a ton of Membership Rewards points for your next award trip.

Pros

  • The current welcome offer on this card is quite lucrative. TPG values it at $1,600.
  • This card comes with a long list of benefits, including access to Centurion Lounges, complimentary elite status with Hilton and Marriott, at least $500 in assorted annual statement credits and so much more. (Enrollment required for select benefits.)
  • The Amex Platinum comes with access to a premium concierge service that can help you with everything from booking hard-to-get reservations to finding destination guides to help you plan out your next getaway.

Cons

  • The high annual fee is only worth it if you’re taking full advantage of the card’s benefits. Seldom travelers may not get enough value to warrant the cost.
  • Outside of the current welcome bonus, you’re only earning higher rewards on specific airfare and hotel purchases, so it’s not a great card for other spending categories.
  • The annual airline fee statement credit can be complicated to take advantage of compared to the broader travel credits offered by competing premium cards.
  • Earn 80,000 Membership Rewards® points after you spend $6,000 on purchases on your new Card in your first 6 months of Card Membership. Apply and select your preferred metal Card design: classic Platinum Card®, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu.
  • Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year and earn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
  • Get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings, which requires a minimum two-night stay, through American Express Travel when you pay with your Platinum Card®.
  • $240 Digital Entertainment Credit: Get up to $20 back each month on eligible purchases made with your Platinum Card® on one or more of the following: Audible, Disney+, The Disney Bundle, ESPN+, Hulu, Peacock, SiriusXM, and The New York Times. Enrollment required.
  • $155 Walmart+ Credit: Cover the cost of a $12.95 monthly Walmart+ membership with a statement credit after you pay for Walmart+ each month with your Platinum Card. Cost includes $12.95 plus applicable local sales tax. Plus Ups are excluded.
  • American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. There are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year in baggage fees and more at one select qualifying airline.
  • $200 Uber Cash: Enjoy Uber VIP status and up to $200 in Uber savings on rides or eats orders in the US annually. Uber Cash and Uber VIP status is available to Basic Card Member only.
  • Get up to $300 back per calendar year on the Equinox+ digital fitness app, or eligible Equinox club memberships when you pay with your Platinum Card. Enrollment required. Learn more.
  • Breeze through security with CLEAR® lanes available at 100+ airports, stadiums, and entertainment venues and get up to $189 back per calendar year on your membership when you use your Card. Learn more.
  • $695 annual fee.
  • Terms Apply.
  • See Rates & Fees