BVM May 2016 - page 111

Business View Magazine - May 2016 111
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of success increases tremendously.”
Today, Motel 6 has 540 company-owned properties
and 750 franchises. According to Savas, 40 percent
of his franchisees are multiple owners, meaning they
have more than one Motel 6 property, but over 60 per-
cent of them own other hotel brands, as well. Savas
explains that these experienced owners have proper-
ties in the economy segment
as well as in the mid and up-
per segments of the industry,
and thus can spread their risk
over the different market seg-
ments. When times are good,
the upper end hotels can
make more money, but when
times are not so good, and
the luxury market is weak, the
economy segment can anchor
a portfolio with its greater prof-
it margin and more tangible
returns.
According to Savas, those
franchisees understand that
the hospitality industry is cycli-
cal. “There’s a five, seven, ten
year span, you’re never sure
of where you are in the cycle,
but you’re going to be up and
down. It’s a trend that’s been
going on in the hospitality in-
dustry for decades and you
have to prepare for it. It’s inevi-
table. The timing can change,
but it’s inevitable.” While
the entire industry struggled
through the Great Recession,
the economy segment was
less impacted. Since operat-
ing costs there are minimal, when less people come,
less money is lost proportionally as compared to the
mid and upper segments.
Savas says that even as Motel 6 continues to stick to
its primary mission - which is to become the uncon-
tested leader in economy segment - it will not refrain
from growing and expanding. Franchise development