Texas-based budget hospitality group is right on target for its ambitious expansion.
If you’ve ever stayed in a Motel 6 property you won’t have been surprised with chocolates on your pillow (which probably only comes in one grade of softness). You won’t have been spoilt for choice when it comes to breakfast items and you won’t have top-of-the-range bathroom items. What you will have, though, is exactly what you thought you were getting when you booked and that’s what G6 Hospitality LLC has built the brand’s reputation on.
“We hold our standards pretty tight,” says Jon Bateman, vice-president, design and construction. “Our rooms are very important to us. Our guests expect a clean, comfortable room at an affordable rate and that's the value proposition we offer consistently throughout the network.”
G6 Hospitality LLC owns, operates and franchises more than 1,400 economy lodging locations under its iconic Motel 6 and Studio 6 Extended Stay brands. Headquartered in Dallas (Carrollton), Texas, the company employs nearly 10,000 team members across the US and Canada with projects in every state in the USA including Alaska. The programme uses consultants and associations to train on the latest design construction and safety methods.
For franchises, G6 uses a prototype that allows flexible design and lets the franchisee configure their property in a shape that conforms to their site needs. The prototype is then designed with construction costs and profitable operations in mind and G6 provides the prototypical drawings for flexible layouts and sizes, preliminary site sketches and construction support.
When the Blackstone Group bought the company back in 2012, says Bateman, “they committed around $0.5bn in capital to renovate the corporate network. That was planned out over a five-year period. At the same time, the enterprise has a goal of growing the brand and hit somewhere in the neighborhood of more than 2,000 properties for the total network, and we are currently adding about 150-175 new properties a year.” In fact, he adds, the 500+ corporate locations will be complete in spring 2017[RR1] .
“There have been challenges, for sure,” says Bateman. “When you have a network as large as ours, half a billion dollars sounds like a lot of money but when you’re talking 500+ properties, you have got to get creative on how you spend that money because, at the end of the day, you’re not going to be able to do everything you’d like.”
Motel 6 and Studio 6, the iconic brands managed by G6 Hospitality, are economy brands so, says Bateman: “Everything we do has got to be value driven. We’re great at going out to our vendors and procuring product at the best possible price. We've been able to establish solid relationships and develop great partnerhips with our vendors. .” On the construction side, says Bateman, “we've found a very good niche of vendor. The midsize self-performing general contractor usually does very well for our brands.”
The G6 design is a big part of what distinguishes it from other brands. Says Bateman, “I think the fact that we're able to design a very cost-effective platform for our franchisees is one of our key differentiators in the economy segment. . We also have a very efficient operating model that has been very successful for us.”
When Bateman was hired for the role in 2014, he says, “one of the things that excited me most was how we’re changing the face of the economy segment. If you look at our rooms, they’re new rooms with wood-effect flooring, granite countertops in the bathroom, flat-screen TVs, modern furniture and contemporary soft goods. This is different than what you would think of as a typical economy room.”
One of the key challenges for budget brands is getting new customers, says Bateman. “We've got these beautiful new rooms and if you're a guest that's never stayed with us and you're driving by, you wouldn’t know. How do you get that guest that has never seen inside our rooms to realise the difference when they walk through the door?”
So the company has started upgrading some of its exteriors to match the interiors. It also opened nearly 10 brand-new Motel 6 or Studio 6 locations this year with another 20 properties planned for next year. Bateman explains, “Motel 6 is your traditional road-side motel with a limited service of a hotel room, flat-screen TV, etc. We don't provide the extra amenities offered at other hotels like conditioner or breakfast. Studio 6, our extended stay lodging option, is geared more towards business, contractors or people who are on a job for three to six months, and thus, our locations are furnished with a kitchenette, dishes, refrigerator, and enough space to provide the comfort of home while away from home. “Everything you’d need to live comfortably for an extended period of time.”
Some new franchisees come in having operated a mid-scale brand, offering breakfast and other amenities that take considerable overheads. Says Bateman: “We get them up and running as a new and renovated property and they find that with less overheads and less services they can work less and make the same amount or more money.”
Bateman adds: “Several of our franchisees that have jumped on board with similar designs to ours. They really recognise the value in a well-designed, cost effective building and an effective operating model. It’s a good opportunity for both the franchisee and a network to improve its image and offer a better value proposition.”
Design highlights for Bateman include the company’s Denver corporate location. “We really redid the entire face of the property and it's a pretty dramatic difference from before,” he says.
“We're pretty fortunate that we have got such a great group of franchisees that have really partnered with us and seen the value of renovating the properties,” Bateman adds. But still there are going to be hiccups along the way: “There's always going to be challenges when you renovate approximately 150-175 properties a year. You might have permitting issues, construction issues, financing issues and any other variety of challenges pop up. But this is completely typical when you’re dealing with these kinds of numbers.” We have an outstanding Project Team that is used to these challenges!
Through it all, one of the things the group prides itself on, says Bateman, “is that everything we do is in support of our operators. We have got a great group of project managers, architects, engineers, and support staff that can provide guidance to our franchise partners. “Our team is here to provide project support to both our Corporate and Franchise Operators.”
[RR1]John, not sure if here you are talking about renovating goals and growing the overall portfolio? My Suggestion:
“Under our new ownership, we had two major goals: growing the network and renovating the existing portfolio to meet needs of the market. Regarding growth, the expectation is to be north of 2,000 locations by XX year, and we will continue our efforts to meet that goal. As for the renovations, Blackstone committed around $0.5bn in capital to renovate the corporate network over a five-year period.” In fact, he adds, “the 500+ corporate locations will be complete in spring 2017 [RR1].”