Rob Palleschi, CEO of G6 Hospitality, the parent company of Motel 6 and Studio 6, shares some of the reasons the economy sector of hospitality is so profitable, which he illustrates with this anecdote: “As one of our owners, who has numerous brands—including full-service and luxury properties—joked, ‘I have Ritz for show and Motel 6 for dough.’”
1It is less vulnerable to economic pullbacks.
“Although business has been great in the strong economy, it historically does even better when the economy falters.”
2It offers high margins to owners.
“As long as you deliver on your value proposition—in our case, to provide clean, comfortable, and affordable accommodations—guests don’t expect or demand amenities that increase expense for them and the owners.”
3It provides an option for those who would otherwise be priced out of travel.
“Our sweet spot is serving guests paying out of their own pocket to see family or friends, or who have been saving up to go on vacation.”