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Blackstone could take Motel 6, Studio 6 global
October 3 2012

On the day its $1.9-billion acquisition of Motel 6 and Studio 6 was finalized, Blackstone's Jonathan D. Gray said “the sky’s the limit” for global growth.

Highlights
  • Motel 6, with more than 1,100 properties in North America, should be at 2,500 hotels, Blackstone’s Jonathan D. Gray said.
  • Conversions are a primary vehicle for growth of the Motel 6 and Studio 6 brands.
  • Motel 6 could be a “category killer” in the economy segment, Gray said.
 
Jim Amorosia, CEO of Motel 6 and Studio 6, said the brands are “poised for greatness."

LAS VEGAS—Deep-pocketed Blackstone Group LP intends to push its newly acquired Motel 6 and Studio 6 brands to the top of the North America economy segment—and beyond.

On the day the investment company finalized its $1.9-billion acquisition of the brands, Jonathan D. Gray, Blackstone’s global head of real estate, said during a general session Tuesday at the Motel 6 and Studio 6 brand conference that the company foresees potential globalization of the brands.

“Outside the U.S., the sky’s the limit,” he said.

He said the company was successful in pushing forward the globalization of Hilton Worldwide and La Quinta, and the same could be in store for Motel 6 and Studio 6, which have more than 1,100 locations in North America.

Gray said Blackstone is well-versed in the hotel sector, and that experience will benefit growth of the brands. “Our greatest success by far has come from our … (hotel) investments,” he said.

And as it relates to Motel 6 and Studio 6, Blackstone intends to “massively” accelerate the brands’ growth, Gray said.

Jim Amorosia, CEO of the Motel 6 and Studio 6 brands, said the brands are “poised for greatness.”

“The combination of the strength and support of our new owners aligned with our brand will make us virtually unstoppable,” Amorosia told attendees.

Gray said Motel 6 should be a 2,500-hotel brand. “We think it can get there quickly given its strength in conversions,” he said.

Conversions, which once were simply an add-on method of growth, are now a primary vehicle for growth for the brands, executives said.

There is room for growth for extended-stay brand Studio 6, which, Gray said, “is in its infancy.”

“This company has awesome potential,” he said.

Such growth is important for the brands, said Lance Miceli, executive VP and chief marketing officer for the brands.

“We’ve got to accelerate the momentum behind our brands to protect its iconic status,” he said.

Blackstone’s investment
Gray said there were numerous reasons why Blackstone was attracted to the Motel 6 and Studio 6 brands. First, the economy sector in itself is an appealing segment with a lot of growth opportunities, he said.

“The economy (hotel) sector has been abandoned by big … chains,” he said.

He added there is room for a “category killer” in the economy segment. “And we think Motel 6 is that brand,” he said.

Second, he said, Motel 6 languished under its previous owner, Accor. Representatives from Accor declined comment.
 
Blackstone, however, intends to focus strongly on Motel 6 and Studio 6. Gray pointed to the company’s long track record of investing in the hotel industry. Further, 40% of the capital Blackstone has invested has gone to the hotel industry, the most of any of the sectors in which Blackstone invests.

“We think Motel 6 did not get sufficient capital or attention in recent years,” he said, pausing to rapturous applause from the approximately 1,200 attending the session. “Our $2-billion investment makes it a priority.”

COMMENTS   Show All
pierresplace
1/5/2013 9:53:00 PM
As a long standing Motel 6 customer I see a number of areas that Blackstone needs to look at regarding policy. For example, locating smoking rooms underneath non-smoking rooms, and pets in rooms that leave fleas for the next guest as well as droppings left on the grounds. Also, guests that use the room as a kennel while they're out at the theme parks from sunrise until midnight with the dog barking all that time. Just unacceptable. Families with small children next to senior citizens. It just makes no sense to me. Also, apologies for one's inconvenience go no where toward the remedy of problems. That will never grow a business. A guest going elsewhere is not a good business strategy. Just fix this, that's all.
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