CARROLLTON, Texas—Often when brands introduce new prototypes and retrofits, the strategies are accompanied by talk of new competitive sets, raised rates and higher revenues.
When Motel 6 introduced the Phoenix prototype and shortly thereafter Studio 6 introduced an updated retrofit, parent company Accor made no such promises. Instead, the two brands continued to stick with their successful mantra: commitment to providing the customer a clean room at an affordable price.
Although the rollouts of both updates were dramatically slowed by the economic downturn, Jim Amorosia, newly appointed CEO of the Motel 6 and Studio 6 brands for the Americas, said Motel 6 and Studio 6 are each committed to rolling out renovations and Motel 6 will continue to offer the lowest-priced hotel room available.
Economy Ad Will Appear Here
“There’s a clear indication to us that guests recognize our low prices and value over the competition,” Amorosia told HotelNewsNow.com. “So far we’re seeing great strides. Despite our typically high leisure occupancy, we actually had growth against the competitive set in the summer.”
Amorosia, in his first month as chief of the two brands after Olivier Poirot’s voluntary departure, said that, during the downturn, an affordable price “really struck a chord” with customers. The pricing strategy positioned Motel 6 as “the best choice for current guests and new guests as well.”
Motel 6 and Studio 6
“As the economy begins to recover, we’ve been welcoming new guests for our price value,” Amorosia said. “Customers realize that being frugal doesn’t mean you have to be uncomfortable.”
Amorosia said Motel 6’s strategy as the lowest-priced hotel chain hasn’t brought negative connotations.
“I can’t speak to the entire population; there have always been people with difficulty understanding the difference between the words ‘cheap’ and the words ‘lowest price,’” he said. “But as long as we continue to see we’ve got occupancy—and we’ve got literally 49-year committed customers as well as new customers coming on board—we won’t be concerned about whether or not someone has a negative connotation of the word ‘cheap.’”
Paving the way
Amorosia had the “president” designation added to his title in 2007 on the same day Olivier Poirot was named CEO of Accor NA. He said Poirot was “a great boss and great person.”
“When he became CEO in 2007, we had a lengthy discussion about how we could draw on each others’ strengths. I have the operations background and he has the financial background,” Amorosia said of Poirot. “We both wanted to see how we could challenge each other. We had a conversation at the very beginning—we made a pact right away that we would openly challenge one another’s point of view behind closed doors and identify the best resolution for the brand. Up to this day we’ve kept that commitment.”
Amorosia is “waiting with bated breath” to hear where Poirot lands next.
With Poirot’s departure, Amorosia became the first American to lead an Accor brand. He said his nationality doesn’t matter as much as his commitment.
“I’ve been with Motel 6 now for 26 years, but it’s not the tenure that counts. It’s the passion for the brand,” he said. “Accor knows me well, and it’s probably fair to say they had a confidence in me.”
Future of the brands
After Poirot’s departure and with the announcement from Accor earlier this month that the focus will turn to expanding the Ibis brand, some questions were raised about the future of Motel 6 and Studio 6. Amorosia was quick to point out his continued commitment—he’s served as COO for the brands since 2004—to moving forward with renovations throughout the portfolio.
“We’re absolutely committed to the growth of the brand,” he said, “and we’ve accelerated our goal of asset light. I’m certainly committed to the plans and the expectations of me from Accor.”
The plans for both Motel 6 and Studio 6 will be growth by way of a true franchising model and led mostly by conversions. There are a handful of new-build locations that Amorosia expects to drive success, but the Phoenix prototype will mostly be installed at times when product-improvement-plans are due.
“We’ve got franchisees that love the new model, and they know it’s going to be a home run,” Amorosia said. “There’s a little bit of light at the end of the tunnel (for new construction lending), but it’s always a question of timing.”
Amorosia assured the Phoenix model is cost-efficient. He said it wouldn’t make sense to put franchisees in a cash-strapped situation with expensive renovations. And the corporate-owned properties continue to move forward with installing the new model rooms as well.
The top target growth markets for Motel 6 are major urban cities in the United States. Outside of that, the Realstar Group has master franchise rights for the Motel 6 and Studio 6 brands in Canada, and Amorosia said Motel 6 is ready to make its debut in Mexico. Ibis, Accor’s similarly positioned brand outside of the U.S., already has a strong foothold in Mexico, but Amorosia said he is confident the two brands can coexist.
“We’re very comfortable that the Ibis brand and the Motel 6 brand can exist successfully side by side,” he said. “They’re in two different segments of the economy segment. Motel 6 will always be garnered toward the lowest price. In Mexico, none of the Ibis brand will be in the Ibis Budget portfolio.”