Motel Business Plan

Motel Business Plan-31
But perhaps more remarkable--and more indicative of the chain's growing success--was its occupancy rate, the true measure of a lodging facility's success.In 1962, the company recorded a 53 percent occupancy rate, a figure below the national average, but by 1966 Motel 6 was registering an 84.9 percent occupancy rate, well above the national average of 67 percent.This gave Greene and Becker all the encouragement they needed to continue expanding their motel chain.

But perhaps more remarkable--and more indicative of the chain's growing success--was its occupancy rate, the true measure of a lodging facility's success.In 1962, the company recorded a 53 percent occupancy rate, a figure below the national average, but by 1966 Motel 6 was registering an 84.9 percent occupancy rate, well above the national average of 67 percent.This gave Greene and Becker all the encouragement they needed to continue expanding their motel chain.

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Leading this new attack against such larger motel chains as Holiday Inns and Sheraton were Scottish Inns of America, Inc., Chalet Suisse International, Inc., Days Inns of America, Inc., Econo-Travel Corporation, and a motel operator the Wall Street Journal referred to as the "grandaddy of budget motel companies," Motel 6, Inc.

Although the strategy employed by this relatively new band of budget motel companies was similar to the strategy once utilized by Holiday Inns and other large motel chains--charge lower rates than the competition--their approach was novel.

Famous for its "We'll leave the light on for you" tagline, Motel 6 operates as the largest economy motel chain in North America.

The company is a subsidiary of French hotel giant Accor S. and has over 800 locations throughout the United States and Canada.

From California, Greene and Becker had moved into Utah, Nevada, and Arizona and were awaiting the completion of a 12-story motel in Waikiki and two more motels in Iowa, targeting any community that had a population base of at least 50,000.

Changes in Ownership: 1970s-1980s By this time, Motel 6's advertising budget was less than it was at the company's inception four years earlier, declining as Motel 6 billboards were eliminated.Nearly all of the budget motel companies creating a stir in the lodging industry during the early 1970s were operated by management with professional backgrounds in construction rather than hotel management.Such was the case with Motel 6, one of the discount pack that would force motel industry stalwarts to rethink their marketing strategies.After exploratory research proved that figure too low, Greene and Becker raised their target price to per night, then finally settled on per night two years after beginning their design work.Once all the preliminary work was concluded and it was decided that a nightly charge would cover land leases, mortgages, maid service, managers' salaries, and building costs, Greene and Becker set to work, opening their first Motel 6 in 1962.Their 54-unit complex in Santa Barbara was itself a notable achievement and an exception to the other motels scattered across the country.While Greene and Becker were constructing their first budget motel, other larger operators, such as Holiday Inns, were creating increasingly luxurious properties, emulating hotels rather than countering them as they had first done.Four years after the first Motel 6 opened, there were 26 motels in operation, each built for 50 percent of the construction costs other motel properties required.The company generated more than million in sales in 1966 and earned more than 0,000, double the figures recorded the previous year.Now, as these same motel companies reaped the rewards of their successful incursion of decades before, they found themselves vulnerable to attack by newer motel companies employing a similar strategy.In this latest revolution to sweep through the lodging industry, however, the motel industry turned against itself.

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