Budget Hotels Going More Upscale

March 25, 3008, 2008 -- More chic than cheap. That might be the new motto of Motel 6, which aims to redefine what it means to stay in an inexpensive roadside motel. Think flat-screen TVs, granite bathroom countertops and other amenities not commonly associated with budget chains.

And don't be surprised to see low-price competitors do likewise. At least two, Super 8 and Red Roof Inns, have similar plans in the works.

CEO Olivier Poirot says Motel 6's first major makeover in a dozen years is not designed to alter its basic appeal — or price. The chain has grown over 45 years by promising highway travelers a clean room, free morning coffee and HBO at a low rate. Despite looking more upscale, Motel 6 will continue its low-rate strategy; cost of an average room last year was $45.26.

"The idea was: How can we pack more value into the customer without changing positioning?" he says.

Gone will be the busy, vividly colored bedspread. Bedding in sophisticated tones such as cinnamon or olive will complement an accent wall. In the new bathroom, a white vessel sink will set atop black granite. Room carpets will be replaced by wood-look flooring, and new, contemporary furnishings will resemble something from the pages of a West Elm or IKEA catalog.

The plan also puts Motel 6 on track to become the first economy chain to feature 32-inch flat-screen TVs, Poirot says. Guests will be able to plug in their laptops or MP3 players, and they'll have Wi-Fi access at every hotel.

Poirot expects the flat-screen TVs will be "a revolution" in the budget-hotel category. A major competitor, Super 8, operated by Wyndham Worldwide, will "strongly urge" franchisees to buy flat-screen TVs as they upgrade properties and build new hotels with a stylish, "retro-hip feel," says John Valletta of Super 8 Worldwide.

Red Roof Inns has similar plans. Its next-generation rooms also will have a clean, modern look with minimalist bedding, granite counters, wood-look floors and 32-inch flat-screen TVs. The first of the new Red Roofs is expected to open this year in Columbus, Ohio.

The makeover plan at Motel 6 comes as the chain continues to retain strong brand recognition and as the hotel industry responds to changing customer tastes, says Bjorn Hanson, chief lodging consultant at PricewaterhouseCoopers.

"There have been 38 new-brand introductions in the last 38 months for the U.S., and many of (them) are appealing to economy-oriented travelers and younger travelers," he says. "Things like flat-screen TVs, wireless connectivity and clever design features appeal to those types of travelers."

W.L. "Bill" Sisson, a hotel developer who owns an extended-stay sister to Motel 6 called Studio 6 in McAllen, Texas, agrees. "When you go into this room, it's not going to be your typical Motel 6 room. It's cutting-edge. They basically reinvented themselves."

Accor, the French lodging giant that also owns the upscale Sofitel brand, bought the Dallas-based Motel 6 chain in 1990 and also runs Studio 6. Since the purchase, the Motel 6 chain has grown from 550 to about 960 properties.

Poirot hopes to build about 240 additional Motel 6s by 2010 with the first in the Dallas-Fort Worth area next year. Existing motels will start refurbishing as soon as this summer, he says.

Not all changes will be overnight.

Harshad Patel, a developer in Los Angeles, says he doesn't expect to convert the first of his four Motel 6s until late 2009 at the earliest. When he does, he'll first upgrade his highest-profile property: a Motel 6 in Hollywood that fetches $65 to $79 a night and is often 90% occupied.

Travelers appear split on the plan.

"I don't think they'd get a new following," says David Conerly of Boston, an occasional guest. "Motel 6's appeal is based upon price."

But Ken Bailey of Grand Prairie, Texas, who stays more often, thinks flat-screen TVs, Wi-Fi and other amenities will broaden appeal. "They may not be for everyone," he says, "but I would rather pay $39 to $59 instead of $150 and up when all I need is a clean room."