Thursday, February 17, 2011

Motels feeling the pinch?

The article in the Herald on Sunday "Motels feel pinch" was a lightweight ring-around of various moteliers following November's stats that revealed a continuing decline in guest nights compared to the hotel sector. 

While there are many good examples of strong motel businesses that are well positioned, have reinvested and are well run; as a collective we're not doing so good. It's beyond question that there has been a short term blip in consumer demand for motels and guests seem to looking elsewhere. 

The Herald on Sunday article faithfully reported a clutch of reasons as to why the motel sector appears to be losing market share that included discounting from other accommodation sectors, competition from holiday home sites such as and the perennial issue of commercial versus non-commercial rated accommodation.

One property owner seemed to believe that a long term downturn in trade was inevitable and extolled the lifestyle benefits of the motel sector. 

The Motel Association was quick to blame those devious accommodation players in the market place that operate accommodation businesses from residential rated properties. We agree that this is an anomaly, however this is a separate issue that requires joining the chorus of valid business groups that advocate a rating system that is applied according to use rather than perceived ability to pay. This includes the gradual removal of differentials applied between residential and commercial property...

Getting back on track, Jasons CEO Matthew Mayne said that "hotels could not compete with the owner-operator service that motels provided, but getting customers through the door was the trick." And that's the rub. We reckon that the motel product is still a fantastic and relevant product. Motels are easily accessible, their hosts go that little bit further with friendly personalised service, motels offer tremendous value and you can park right outside! The flat management structure of a motivated Ma and Pa that are running a business (and not there for the "lifestyle") should be unbeatable.

We respect that it is difficult to communicate with the MSM, so why is the motel sector really losing market share?

The reasons are numerous, however we reckon that they can be capsulated under two main headings that require urgent attention:
The quality of the motel product and the acumen of its operators.
So instead of witch-hunting other accommodation sectors and blaming others, maybe the motel sector should be looking closely in the mirror where the solution to their collective woes will be reflected back at them.

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