The new Butlins hotel? Get away!

When Billy Butlin opened his first eponymous summer holiday camp in 1936 on the promise of providing "a week's holiday for a week's pay" he knew that the term no frills made good business sense. Provide British holidaymakers with low-budget accommodation and a good show and they'll soon come flocking to your door. But in these slightly more picky times, it seems, a little luxury goes a long way.

Which is why the Butlins founder, who died in 1980 after creating one of Britain's largest domestic holiday operators, might have been a little surprised by the latest reincarnation of his summer holiday.

From today guests will begin to arrive at Butlins' most upmarket creation yet, a brand new £20m hotel in Bognor Regis which boasts spa treatments, widescreen televisions with DVD players in every room and even a haut cuisine menu where you can find such culinary delights as Chateuabriand, confit of lamb or fillet of sea bass.

The five storey Ocean Hotel is a far cry from the cheap and cheerful "Hi-Di-Hi" style that Butlins became renowned for with its famous Redcoat staff and yearly chrome badges which regulars wore with pride on their chests each season. But bosses hope the hotel will attract new customers in these economically tight times as well as appeal to veterans of the Butlins experience who are looking for something a little more upmarket.

Inside the hotel itself guests will be greeted by a cornucopia of kitsch that is a mixture of Footballer's Wives meets Ikea. Each bedroom boasts lime green furniture, under bed mood lighting, singing showers and widescreen televisions whilst the lifts that take you to the rooms blast disco music and yet more colourful light displays at their occupants.

Where Bourne Leisure – the company that bought Butlins in 2000 - particularly hopes to attract new punters is at the hotel's sizeable spa at which guests can pay anything from £20 - £125 for an array of treatments such as waxes, pedicures and "marshmallow facials". To keep the men happy, meanwhile, there is even a "Premier League" treatment (£29) where male vacationers can have deep muscle massages for 25 minutes and watch the football at the same time.

The move towards hotel accommodation is something that Butlins has been increasingly experimenting with in recent years at their Bognor Regis branch – one of three remaining Butlins camps across the country that attract approximately 1.5million visitors every year.

Four years ago they opened the Shoreline Hotel at Bognor Regis, the first time the company moved away from chalet-style accommodation, which will now be used by parents with toddlers. Speaking after the Ocean Hotel's official opening yesterday Richard Bates, the company's managing director, said the average Butlins guest is now increasingly asking for the kind of hotel accommodation they might get on a package holiday abroad.

"We listen to our guests and they tell us that the kind of entertainment they want is what comes out of their TVs on a Saturday night and we provide that with shows featuring Britain's Got Talent and X-Factor contestants" he said. "But they also tell us what sort of accommodation they want and increasingly it's balconies, sea views and lots of light."

So far Butlins' move toward a more upmarket atmosphere – a gamble that the company has spent £53m on in accommodation costs alone over the past six years – seems to be paying off. Of those who have booked to stay at the Ocean Hotel over the next six months, at least 55 per cent had never been to Butlins before. Meanwhile the number of visitors to Butlins overall has increased ten percent year on year for the past two years.

With more Britons now looking to take a domestic holidays because of the ongoing economic turmoil and weakness of the pound against currencies like the euro, no-frills operators like Butlins are determined to cash in on the so-called "staycationers".

"For me it's not so much how you attract the staycation set, but how you keep them," says Mr Bates. "When this economy recovers, if they didn't get a quality experience, they're off and you're going to lose them. About 55% of the customers for this hotel have never been to Butlins before, so they've booked on trust."

Away from the hubbub of the hotel's official launch, Holly Graham and her partner Hartley Whittaker were taking a brief rest from watching their nine-year-old daughter Jodie on a nearby climbing wall. The couple usually booked their holidays in Majorca but said they couldn't justify the expense this year. Would they come back to Butlins for their next holiday?

"Definitely," said Miss Graham. "The children love it and - I know this is a bit naughty - but the nicest thing for the parents is that you don't really feel like you've got your kids around because they're always doing some of the activities. I'm sleeping much better. We're hoping to come back in December with all the family."

For Butlins bosses, Miss Graham is exactly the sort of customer they need to keep attracting. "Building the hotel was easy," admits Mr Bates. "Now the hard work begins."

Hello campers! The Butlins story

*A brief encounter with an irate Skegness landlady persuaded Billy Butlin to create what later became Britain's largest summer camp operator. Born to a mother who worked in travelling fairs, entertainment was in Butlin's blood and it was while watching bed and breakfast landladies kick their holidaying tenants out for the day despite the appalling weather that he hit upon the idea of building a summer camp with cheap accommodation.

*The first Butlins opened in Skegness in 1936 and by the 1960s the brand boasted nine camps that attracted millions every year. But as cheap flights abroad boomed in the 1980s and 1990s, the company went into decline and all but three camps have since closed or been sold on.

*In 2000 the company was bought by Bourne Leisure, which owns the Haven summer camps. It has invested heavily in the remaining camps at Skegness, Minehead and Bognor Regis.

*The company has done well out of the recession which has made domestic holidays increasingly popular.