Shifting Strategies at Motel 6 and Studio 6

New CEO Jim Amorosia oversees move away from ownership to franchising

When it comes to its Motel 6 and Studio 6 brands, Accor likes to keep leadership in the family. Last month, the brands’ parent company elevated 26-year Motel 6 veteran Jim Amorosia to CEO of economy brand Motel 6 and its sister extended-stay flag Studio 6. The appointment was part of a reshuffling of Accor’s North American operations following the departure from the company of former CEO Olivier Poirot.

Amorosia’s appointment also coincides with a shift in strategy for the two brands that calls for less direct investment in hotels and more franchising. Paris-based Accor CEO Denis Hennequin even said the company would listen to offers for Motel 6 and Studio 6, while insisting “there is no fire sale.” Motel 6 has 1,020 properties and nearly 100,000 guestrooms, while the Studio 6 roster includes 63 hotels with more than 7,000 rooms.

Amidst these significant changes, we were able to reach Amorosia by phone shortly after his appointment was announced:

How’s business?
Through September, we’re seeing very solid growth against our year-over-year numbers. We’re seeing strong weekday and weekend growth, which for us in September is a surprise. We’re still seeing 4%, 5% and 6% RevPAR growth, even on the weekends.

To what do you attribute that good performance?
We’ve been doing a lot of aggressive operations management, strong investments in sales and marketing, a continuing best-in-class quality program and training to accompany that program.

Given the macroeconomic factors at work, how difficult is it to assess the outlook for the fall and into next year?
We’re keeping our fingers crossed we’ll continue to see that kind of growth. With all the news going on in the world it’s difficult to know if and when an impact will be felt in the hotel segment. Up until this point, we’re not seeing it.

What strengths do you bring to the job?
First is a deep knowledge and understanding of the industry, including 25 years-plus with the Motel 6/Studio 6 brands. Equally important is very broad experience in the company. I’ve been involved in operations, marketing and human resources so I’ve had the pleasure to see the organization and business through a number of different perspectives. That’s helped balance my perspective on how to run the business.

What are your top priorities?
To focus on consistency from a product and service standpoint, making sure whether it’s a subsidiary property or a franchise property, we’re all on the same page and committed to the same delivery of great product and service along with the lowest price of any national chain. The other thing is to continue to lead the process of significantly reducing capital employed by the brands. We’re looking at that on a day-by-day basis.

Does this means more emphasis on franchising than ownership?
From a growth standpoint it’s absolutely franchising. But even in terms of reducing non-strategic assets, a property may not make sense to us but can make good sense for a franchisee, so whenever possible we’re trying to sell properties with franchise-back relationships.

What regions or markets are you targeting for growth of both brands?
We’re looking aggressively at major urban markets and metro areas across the entire U.S. Of course, we’re always looking to grow in tertiary markets with franchisees. With Studio 6, it’s pretty much wide open. We’re also looking to continue growing both brands in Canada and hopefully soon introducing the Motel 6 brand in Mexico.

What about product innovation for both brands?
We’re up to nearly 100 Motel 6 hotels that have been retrofitted to the Phoenix design. This last summer, we launched the first renovation of the Studio 6 group. It’s also part of the Phoenix design. We’re looking forward to accelerating the Studio 6 renovations, at both subsidiary and franchise locations. Our franchisees tell us the Phoenix look is a home run, and they’re on board to make those improvements happen as quickly as possible.

There have been press reports that Accor might consider selling the Motel 6 brands. What kind of effect does that have when you try to sell franchises?
It’s an ongoing issue, but as long we continue to offer our franchisees and potential franchisees the type of product, the type of service and type of iconic image that is Motel 6, their faith in us will remain the same. The brand strengths are the same, our partnership promises to our franchisees are the same. We believe potential franchisees will recognize the value and proven success of our brands and not be affected by those speculations.

What are the biggest challenges for the two brands?
There are two equally important challenges we must manage. The first is maintaining the consistency of our network. While consistency is a simple word, making it happen across 1,090 properties requires a tremendous amount of dedication and energy. Equally important is our commitment to protect the integrity of the Motel 6/Studio 6 brand positioning in a very dynamic competitive marketplace. It’s a constant challenge to remain in tune with the needs of our core guests. We’ve lived through the recession with our guests, and it’s increasingly more common to find consumers whose focus has shifted from a mindset of spending money on what I want to a more thoughtful, rational approach to spending money on what I really need. We believe Motel 6 and Studio 6 are right on point from that perspective.

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