While we try to keep our ramblings reasonably pithy and upbeat we will share a few random concerning observations on the current state of the motel nation.
There is no doubt that it has been a difficult year for many motels with occupancy rates falling by about 7% nationally for the past 12-months. This statistic only tells part of the tale as the spread of this average seems to be somewhat lumpy. While there are many pockets of motels keeping in contact with last years trading results, others are down considerably more than the national average.
From what we can see there are many motel businesses operating very well, however from our observations there are a hard core of motel businesses in crisis.
Our heart goes out to those hard working couples that wake up every day surrounded by a situation that they are unable to escape from. Unfortunately there is often little that can be done to turn a negative financial situation around quickly. Often survival will depend on the innovation, investment and goodwill that has been built up many months and even years prior.
From our travels around the country we are seeing the old rate board bogey starting to appear at the curbside more often. This saddens us as it is an outward display of desperation of an tired old motelier that is devoid of ideas and is desperate to appease a concerned bank manager.
Within the confines of the motel reception operators are prostituting themselves by doing silly deals and slashing tariff in the false hope that this will bring them sustainable economic salvation. It will not.
Our industry urgently needs to have a cup of tea and reassess what we offer. We need to have a discussion on tariff setting, yield management and online marketing. We need to kick the distraction of environmental evangelism to touch and focus on benchmarking quality that will assist the motel sector meet the changing demands of the consumer.
The motel sector needs to acknowledge that it is losing market share. Motels have lost their crown and are no longer the most popular accommodation option for the traveling public with the hotel sector accelerating past. A buoyant, positive and innovative Holiday Park sector is quickly gaining ground from behind. We need to ask ourselves: Why is this?
The individual motel operator is very good at reducing variable costs within their own environment. This is probably the average motel operator's biggest strength, however funding is at times being diverted away to the detriment of guest comfort and from deffering repairs and maintenance.
Substantial operational savings are difficult to find as most expenditure in a motel operation is fixed. With the majority of motel properties being leased is it time to generate a discussion about the changes that have occurred in equity flows between rental, motel expenses and profit? The motel lease has worked well in the past, however it may be time to reassess how this can be tweaked to work better in current economic times?
Finally from what we have observed the average motel operator needs to sharpen up and look the part. For goodness sake lose the jandals, jeans, paint stained rugby jerseys and start looking like a professional operator. At least match the dress standard of a minimum wage fast food operator.
Phew! Glad we got that off our chest....after an increase in our medication, normal service will resume shortly;-)
