Thursday, September 10, 2009

Are Motels Losing Their Luster?

Are Motels Losing Their Luster? Well in New Zealand the answer is a firm NO, however it saddens me to see once thriving motels in decline. I drove past a few of these properties on my recent travels that I can remember back in their glory days. As I drive past these motels, a chill goes down my spine.

The driveways have potholes, the paintwork is peeling, the fence is in disrepair, the once proud motel sign is faded and the gardens are overgrown with weeds. At least I can console myself that these motels are not representative of our healthy motel industry and those few motels that are obviously in decline will quickly disappear from the landscape.

One sure-fire sign that a motel is on the slippery slope towards economic oblivion is the sub $100 rate board. These tacky roadside boards scream an element of desperation and signal several years of minimal innovation and investment.

The next step to motel-hell are when motel operators start to offer rooms to long term tenants. This changes the nature of the business and will often occur after many years of neglect and little re-investment. The permanent tenants themselves will quickly ingrain themselves into their surroundings and dominate the persona of the business. This will detract from the motel's original market of short term travelers and the rate of decline will rapidly increase as further units are rented out long-term.

It will soon become apparent that the motel business renting rooms long term will soon be unable to sustain basic R and M and the property will transform itself into an unappealing ghetto of undesirables.

Thankfully this scenario seems to occur more in America than in New Zealand.
I have been following with interest the saga Seattle City vs the owners of five seedy motels that have become dens of inequity with one motel employee describing the environment: "They got crack bitches, dope-fiend bitches, pimps, pussy, crank, coke, weed; whatever you want..." Sounds tempting?!?

New Zealand motels are far removed from this scenario, however it is interesting to compare and contemplate how a hard core of American motels find themselves in an ongoing real-life B-grade movie set.

On average, New Zealand's motel stock is a lot newer than in America. New Zealand motels are traditionally situated on land of reasonable value near main arterial routes, close to amenities that dictates that the motel property will produce a reasonable ROI if it is maintained to a reasonable level.

Thankfully the unappealing sub-standard motel seems to have a short life-span in New Zealand and is soon obliterated from the landscape as the motel buildings are replaced or redeveloped for better economic use.

Probably the main reason that New Zealand does not have the same problem of long term tenanted motels as in America, is the competition from the country's largest landlord of substandard slum housing.

We can be thankful that the New Zealand government monopilises this niche market and the private sector struggles to compete;-)

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