LAS VEGAS—Motel 6 and Studio 6 executives on Wednesday shined more light on the changes the economy brands are in for after their acquisition by Blackstone Group LP.
One of the biggest changes for the brands following the Blackstone deal is expanding beyond the United States and Canada. During a one-on-one interview with HotelNewsNow.com Wednesday, Jim Amorosia, president and CEO of the Motel 6 and Studio 6 brands, said Mexico will be the first country targeted as part of the global expansion initiative.
Amorosia said Motel 6 has been eyeing expansion into Mexico for quite some time. The company had previously drawn up plans looking at how the brand’s Phoenix room prototype could fit into the footprint of Mexico’s buildings.
The company is already working with a developer in Mexico with the goal of opening the first Mexico Motel 6 by the end of 2013, Dean Savas, senior VP of franchise, told HotelNewsNow.com.
“Once we’re in Mexico, it’s just a hop, a skip and a jump to Central and South America,” Amorosia said.
With new construction still at a trickle, the lion’s share of the development for Motel 6 and Studio 6 will come via conversions, executives said. The company’s goal is to have a 50/50 mix of conversions versus construction, but that ratio today is moving into the range of 80% conversions and 20% construction, Savas said. It previously had been as high as 90% or 95% conversions.
During a general session at the brands’ conference Tuesday, Jonathan D. Gray, Blackstone’s global head of real estate, said the Motel 6 and Studio 6 brands should support 2,500 properties. The brands count approximately 1,100 hotels at present.
“We’ll get to 2,500 as quickly as we possibly can,” Amorosia said. “We think we can double what we are going forward.” He added the company will focus on developing in urban segments.
Studio 6 expansion
While Motel 6 has received a lot of the attention in the talk surrounding Blackstone’s $1.9-billion acquisition of the brands, Amorosia said the company is not forgetting about its extended-stay product, Studio 6, of which there are 70 hotels.
The expansion of Studio 6 will occur “as fast as possible,” Amorosia said. Of the 70 properties, 68 are in the United States and two are in Canada.
The extended-stay business is a bright spot for the hotel industry, and the company wants to take advantage of that demand, he said.
“Seventy in a country of 300-plus million people; the sky’s the limit,” he said. “There’s no reason why we can’t be 500.”
Brand facelift
Blackstone is committed to the rollout of Motel 6’s Phoenix room design, Amorosia said. The project was launched in 2008 but has not yet been introduced at all Motel 6 properties.
Amorosia said approximately between 200 and 250 properties have the new Phoenix room upgrade.
The plan is to complete Phoenix renovations at between approximately 100 and 150 Motel 6 properties per year. A “majority” of the $500 million Blackstone has earmarked for capital improvements during the next three to five years at the Motel 6 and Studio 6 brands will go toward the Phoenix retrofit project.
“Over the next five years, the entire system will be completed,” he said.
The facelift goes beyond Phoenix, however, Amorosia said. All properties will receive some sort of treatment to their exterior in an effort to catch the eye of potential guests. For instance, an undetermined number of Motel 6 hotels will see the addition of a feature that looks like a lighthouse, with a lighted Motel 6 sign on top.
“We’re going to do something to all of our hotels so people will realize something has changed,” he said.