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It was June 6, 1962, when Motel 6 welcomed its first guests for $6 per night in Santa Barbara, Calif. Today, that $6 nightly rate is long gone—adjusted for modern times—but Motel 6 is still going strong with approximately 1,100 properties and still offering the lowest rate of any brand in the industry. It is also still running at the top of its game with a business model of consistency for travelers.
“Motel 6’s first travelers had great coffee. They had a pet-friendly environment. They had two bars of soap and no-iron sheets and got it all for $6 a night,” says Jim Amorosia, CEO of Motel 6 and its sister extended-stay brand, Studio 6. “Today’s locations offer all of those same standard amenities plus a couple of modern-day necessities such as extended cable channel lineups, free local calls, no long distance access charges, and all of our locations have WiFi access and most have swimming pools.”
Motel 6 has added to its offerings over the last few years with approximately 150 properties already converted to its Phoenix room prototype. The Phoenix prototype adds a modern décor to the brand with fresh color, sleek seating areas, platform beds, and granite countertops. In addition, it brings an environmentally friendly aspect to the economy chain—high-efficiency PTACs, low-flush toilets, recycled materials, etc. In fact, Motel 6 was the first economy brand to debut a LEED certified property at its Northlake, Texas, location.
“We are the most recognized brand in the economy segment,” says Amorosia, a longtime executive of the company who took over the top spot at the chain last year upon the departure of Olivier Poirot. “Even after 50 years, we are still extending the lowest rate to a new generation of price-conscious travelers.”
And now Motel 6 and Studio 6 stand to get some help for the future. Celebrating 50 years in business became only part of the story for the brand when, in May, it was announced that its parent company, France-based Accor SA, sold both Motel 6 and Studio 6 to private-equity giant Blackstone, which also owns Hilton and La Quinta. Accor has owned the brands since 1990.
THE BLACKSTONE FACTOR
“What better way to kick off the next 50 years,” Amorosia says of the deal with Blackstone, which netted Accor $1.9 billion and is expected to close in October around the same time Motel 6 holds its official anniversary celebration. “We think this is a great opportunity for Motel 6 across the United States and Canada, and for moving into other countries.”
In an interview with Lodging during the NYU Hospitality Investment Conference in June, Amorosia and Chief Marketing Officer Lance Micelli pointed to Mexico and Latin America as areas where they think the Motel 6 brand translates well.
“We think Motel 6 is going to be in a tremendous position going into the future to dominate the economy segment and be in a position to drive tremendous room sales going forward,” Amorosia says.
Amorosia, who says he’s met with soon-to-be new colleagues at Blackstone’s family of brands, believes the deal will also have benefits for Studio 6. “We think Studio 6 is a, for lack of a better word, diamond in the rough, because we’re still relatively small compared to the bigger brands,” he says. “Of course, Blackstone has a tremendous amount of experience with the ESA [Extended Stay America] group. We’re looking forward to being able to tap some of that expertise.
“Having said all that, I want to say that life with Accor over the last 22 years was not only very positive, but also truly helpful to Motel 6 in developing itself,” he continues. “They were around during the time when we got in our first TV advertising and the first infusion of significant capital.”
MODERN TRANSLATION
The Blackstone future aside, Motel 6 has already been fast-forwarding into the modern day and the future. Amorosia says that the brand has been able to hold on to its consistent game plan over five decades because the business model translates so well over generations.
“Obviously we rely on our brand identity as we reach out to new generations of travelers,” he says. “Of course, Tom Bodett has been able to portray that honest, straightforward personality. But now we also have a very strong online presence with banner advertising, social media, mobile apps, and added that to radio and TV advertising.”
It has all served to raise brand awareness among the new generation of travelers, who in an up-and-down economy are just as interested in value propositions and price-friendly accommodations as their parents and grandparents were in previous years. The brand has also reached out to multicultural travelers and has translated well, particularly with the Hispanic population, Amorosia says.
That’s mainly because of the strong border presence of the brand’s properties. “The way that Motel 6 started, and more important, the way it lays out today is that it is basically the ‘u-shape’ of the country. It goes across the two coasts and drops down across the Southeast and Southwest. Of course, those are the highest concentrations of Hispanic populations,” he says. “We also have representation at all of the key border points.”
CONSISTENCY AND THE FUTURE
“We’ve been a rock in the industry,” Amorosia says. “We’ve been steady. We’ve had a clear delivery to our guests.”
Over 50 years, much in the industry has changed, of course. There have been trends that come and go concerning design, service, and operations. Through it all, Motel 6 has stuck to the age-old concepts of quality service and consistency to build loyalty among travelers.
“We’ve always remained committed to the point that the guest should only have to pay for what he or she wants,” Amorosia says. “If a guest has to pay for a lot of amenities but never uses them, what’s the purpose of the amenities? That’s our philosophy.”
For example, Motel 6 offers WiFi, but if guests don’t want access they don’t have to pay for it. If they do, the hotel charges for it. “It’s not a significant amount of money. If the guest wants it he or she can get it. Our price position is such that the amenity can easily be added. But if you don’t want it, why pay for it?” Amorosia says.
Motel 6 has also been consistent with its business partners. Amorosia says the brand gets a cross-section of franchisees, and many of them are multi-unit owners for the brand. “Of course, we are very much interested in continuing those relationships. We’ve made some good headway on that,” he says.
Bernard Rudler, executive vice president of franchising, says the fact that the brand is an owner/operator has helped it maintain consistency as a franchisor over the years. “We have a sensitivity to their business and they know when we make a request, it must be important,” he says.
With the change in corporate ownership, Rudler says the same will continue to hold true. “We don’t have any reason to see a different model,” he says. “We have been quite successful with it.”
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