The hotel industry is a strange sector, particularly the customers. Usually, people have a general notion that if something is priced more than the other products in the same category, then that is undoubtedly a better quality product. And usually, people don’t mind to pay more for a better quality product. Not in the case of hotel and hospitality industry. People here select the most affordable offering based on their requirement. We are of course not talking about the top tiered star category hotels, we are discussing the budget segment here. In the budget segment, people only look for affordability and not for the fancy features – it is true now, and it was true at 1962 when Motel 6 started its operation in the hospitality industry. The founders of Motel 6 was experienced in the housing projects for budget conscious people, they knew what budget aware people want. They wanted to enter in the budget segment of the hotel industry which was pretty neglected till that time, and they saw a big empty space waiting to be filled.
One might think what’s the reason behind that unique name “Motel 6”, particularly, if the number 6 indicate anything special. The answer is, Yes, the name and the number actually has an interesting story many don’t know. The number 6 means the flat room rent of $6 at 1962 when Motel 6 opened for the first time. The $6 rate was decided carefully after much discussion between the founders and based on their own internal market research, this $6 rate was enough to tempt the potential customers, yet making a little bit profit after covering all the expenses.
The name of “Motel 6” is no longer relevant in current time indeed. No flat rate is offered across locations, every location has its own price now. Also, they got different rates for different type of rooms based on the quality and facilities being provided. The rate is certainly many times high in today’s time than the time when it was $6. However, considering the inflation, their price of $39 (Wisconsin) is still very much low just as it was in 1962. If you calculate the inflation, $6 in 1962 is equal to more than $45 in 2019, hence they are even more affordable right now!
Motel 6 acquired by Blackstone: The Biggest takeover in the hospitality industry of USA
The brand Motel 6 was in the news at 2012 when it was left by its then-parent group Accor and further acquired by The Blackstone Group. The then-parent group Accor, after trying tirelessly for almost 20 years to get success with the Motel 6 brand, has finally got separated themselves the brand at 2012. And this was good news for the Motel 6 brand undoubtedly.
The Motel 6 brand was like a burden on the parent group Accor for all these years. Though the economy brand was a significant part of Accor’s total business, the profit was a meager 3% of the Accor’s total profit.
According to a “Deutsche Bank” analyst, the brand Motel 6 had a poor image in the market and was no way felt connected with other successful brands Accor own. So Accor had to take this decision.