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 Jim Amorosia arrived a little late to our meeting at ALIS last week. The president and CEO of G6 Hospitality, the company that was created to manage the Motel 6 and Studio 6 hotel chains in the wake of last year’s acquisition by Blackstone, had been held up at a AH&LA CEO roundtable discussion that went long due to an animated discussion of the Affordable Care Act (ACA). So before we discuss what 2013 holds for Motel 6, he has a few things to say about healthcare.
Amorosia says that there are still so many unknowns surrounding how the act will be implemented that it’s causing some anxiety among hospitality executives. “We know what the legislation is but no one is clear on what the regulations will be that are written by the various departments,” he says. “And the window is closing quickly in terms of timing.”
October of this year will kick off the largest open enrollment in health insurance this country has ever seen. That’s because the ACA requires every employer of more than 50 full-time workers to provide access to affordable care. But this isn’t the part of the law that concerns Amorosia. “It’s not about whether or not there’s access,” he says. “But what the percentage of the population is that will pay the necessary premiums to get that access.” He says this decision is going to difficult for the many employees that currently don’t buy health insurance because either way they’ll need to spend money on it next year. “Access verses mandatory usage are two totally different concepts,” he says. “Obviously, this is a free country so it’s up to the user to pay for this offered protection or to choose to pay a penalty and go to urgent care as needed.” For many young healthy hospitality workers enrolling in health insurance still may not make economic sense to them. But, according to Amorosia, if there are only older people in these programs then they’ll incur massive expenses due to higher per usage claims.
Amorosia says Motel 6 offers a good benefits package to its employees that work more than 20 hours per week, with different levels of coverage offering anything from flexible benefit plans to full premium plans. “With what we do today about 40 percent of our hourly employees take advantage of our benefits,” he says. “But if everyone were to take the coverage, our costs would more than double. I find it difficult to believe this would happen, but it is fathomable from a numbers standpoint.” This means that figuring out healthcare costs going into next year is sure to cause a lot of industry agita.
Switching gears to Motel 6’s outlook on the year, he says that it’s only a matter of time that the brand hits the occupancy levels it had at the peak in 2007 given the lack of new product coming online and the steadily growing demand in the economy segment. When it comes to rate, he says that Motel 6 is within striking distance of peaking on that front as well. “At the moment we’re not interested in going after rate,” he says. “We’re more interested in going after market share.” As Motel 6 renovates its properties thanks to the capital infusion from Blackstone the brand will own more of the economy business. And, he says, it’s going to happen faster than you think. “Our accommodations needed to be taken up a step and now it’s happening. In 36 months, we can have our entire 1,150-hotel system renovated in. That’s quite a feat.”
When it comes to international growth, he says to company is looking to have a signed agreement in place for an expansion into Mexico by the end of the year, quickly followed by properties opening in 2014. “Between Mexico and Canada, we see the potential to grow the brand by 70 hotels.” And, he says, once Motel 6 is in Mexico then it will expand into the rest of Latin America. “We’ve been around for 50 years and we’ve had border town hotels for 45 of those years.” In other words, Motel 6 knows what its getting into.
READER COMMENTS
Saturday, March 30, 2013 by Larry G
RE: Motel 6 in Beaverton Or.
Absolutely the worst DUMP i have ever stayed at!!!! EVER!!!! and i wont ever stay at a motel 6 again..drug deals in the parking lot, guy with his 5 year old going car to car asking for dope..room was like a prison ward..holes in the wall, bathroom walls looked like they were about to fall in..it was 11pm at night and we tried to find another place..i was afraid to lay in the bed..How can u even sell this as a good no frill stay..its worse than a flop house!!!! U don't even put a real pic because of the dump it looks like..U should have Paid me to stay there...Send this to the CEO and let him bring his family here to stay a night or two..Maybe the bed bugs will make him think about the DUMPS he promotes..Next is a phone call to the city of oregon then to whoever the org is that regulates dumps like this..My God!!!
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