Motel 6 owner bets Latin Americans will choose value amid slowdown

Motel 6 owner bets Latin Americans will choose value amid slowdown.

Undaunted by an economic slowdown in Latin America, G6 Hospitality, a U.S.-owned chain of hotels that owns the Motel 6 and Studio 6 brands, believes that this may actually help its expansion south of the border as there could be a search for value; G6 Hospitality, already present in 1,200 locations across the U.S. and Canada, is carrying out efforts to expand to Latin America following a decision in late 2013 that began to be fully implemented last year.


“It is an opportunity: we are opening a brand that is entering the market offering value, which means receiving a good service at a good price,” Guillermo Estrada, development director for Latin America at G6 Hospitality, said. 


The company is developing the Hotel 6 new brand in Latin America.


So far, contracts have been signed for a development agreement of 55 hotels in Mexico and one in Bolivia.


“We see countries in South America with much potential, like Colombia, with economic stability, and Peru,” Estrada said. 


Unlike in the U.S., where the company directly owns and operates 530 of the 1,200 locations, with the rest being franchises, in Latin America all of the new openings will be franchises.


The company provides investors with training and support including a reservations platform, he added.


Studies carried out by the company show that in Latin America a large percentage of those who use similar hotels are locals, including those traveling on business like salespeople, inventory managers and also families on vacation that want a clean and inexpensive place, he added.


Another difference found in Latin America is the need to offer food along with the room -- at least breakfast -- he added. Also, the Latin American consumer needs an Internet connection. Room sizes are the same as those in the U.S.


The name in Latin America was changed to “Hotel 6” instead of Motel 6, following studies, Estrada said.


The 55 hotels to be built in Mexico will be completed by 2020. Construction has already started in Guanajuato and will soon begin in Puerto Vallarta. In Bolivia, the design stage has started in Santa Cruz, he added.


The company is building new hotels from the ground up as opposed to incorporating independent operators, though this option has not been ruled out. “There are costs associated with taking independents” up to company standards, Estrada said.


“We see much potential in Latin America," Estrada said. "There are investments in petrochemical plants, natural gas, and this expands the economy. We see also a growth of the middle class.”


The company hotels are in the economic segment that, in Latin America, is referred to as “three star” category, he added.


The company has been operating in the hotel business for the past 52 years and has 10,000 employees.