Slowly but surely, G6 Hospitality spreads its wings outside North America

LOS ANGELES—G6 Hospitality is not a household name. Its flagship brand, Motel 6, is. And has been since 1962, when the first property opened in Santa Barbara, Calif., where a room cost $6 (hence the name).

Those roots that were laid down back then continue to grow and spread today; all under the leadership of G6 Hospitality CEO Jim Amorosia, who has been CEO of Motel 6 since 2000, when the brand was part of Accor, up through to today as CEO of G6 Hospitality, the management company that now operates four brands, and which was acquired by Blackstone Group in 2012. 

Amorosia, who we spoke to here at the Americas Lodging Investment Summit (ALIS), is hard on the job pushing the brands outside its U.S. and Canada familiarity. And adding more brands. Under his leadership, G6 now, in addition to Motel 6 and Studio 6 (its extended-stay brand), includes Hotel 6 and Estudio 6, both targeting Latin America, where expansion continues. 

In late 2014, G6, based in Dallas, made its first foray into Mexico, partnering with Latina Promohoteles, which had plans to open up to 55 new-build Hotel 6 or Estudio 6 properties by the end of 2020 in major cities across Mexico. Hotels under the two brands will begin opening this year.

Mexico, however, was only the beginning. At ALIS, G6 announced two blockbuster deals in Central America and India. In the former, G6 signed a new area development agreement with InterAmerican Development Group for Hotel 6 and Estudio 6, in Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama. 

"Phoenix" is the new design prototype for Motel 6. Credit: Motel 6

New Opportunities

With this new partnership, the company plans to expand its portfolio opening up to 10 Hotel 6 and Estudio 6 properties within the next five years. "In 2014, we saw an opportunity to expand our footprint to Latin America as a response to increased demand in the region's economy travel segment," Amorosia said.

Amorosia said the first of these hotels will break ground this year in Guatemala, adding that the difficult part is the permitting, which can take upwards of 12 months just to sort out.  

While conquering North America and now taking on Central America appear to be a natural evolution, G6 dropped another news bomb at ALIS, announcing a development deal that will bring the iconic brands to India. The deal is with Auromatrix Holdings, a commercial hotel developer, hotel/resort owner and management operator, and comprises a total of 40 properties under the Motel 6, Studio 6 and Hotel 6 brands by the end of 2022.

Amorosia is downright giddy over the prospects, calling India possibly the company's "biggest opportunity." But it, like Central America, won't be easy—developing hotels in India can be an arduous task. 

Amorosia pointed to cities like Chennai and Kanpur as potential locations, but could not give a number of how many properties he envisioned in India total. But with an exploding middle class and, as he referred to it, "one of the best rail and bus systems in the world," the opportunity for limited-service hotels is limitless. 

A renovated bathroom. Credit: Motel 6

U.S. Business

The U.S. is still G6's main franchising focus with some 1,300 properties in the U.S. and Canada. And while dual-branded opportunities are not a limited-service-segment staple, G6 is looking to change that, Amorosia said, with combined Motel 6 and Studio 6 properties. "We can improve the margins and use the overall redundancy in the back of the house," Amorosia said. Two such have already broken ground.

In 2016, G6 opened 100 Motel 6s and 20 Studio 6s and signed 40 new development agreement with Studio 6. Amorosia said that within the extended-stay segment, the Studio 6 brand makes up 50 percent of all new construction. Still, G6 brands have a 3:1 conversion versus new-construction ratio. Through 2016, 98 percent of G6's owned properties in the system (500 hotels) have been renovated while 90 percent of all have been renovated. 

In addition, G6 is seeing more multi-unit ownership of its brands, especially among the AAHOA community. 

With four brands currently, don't expect G6 to add another any time soon. However, similar to what Best Western launched last year, G6 studied a white-label brand, whereby independent hotels can plug into G6's distribution system without carrying one of the brand flags. Ultimately, nothing came of it. 

What it did do was launch a new mobile app called My 6. The app was built with Prolific Interactive and allows guests to reserve a room in just three taps. 

G6 continues to operate as a unit of Blackstone, which, as Amorosia told us, last refinanced G6's debt in 2015. "They dictate how to best use our real estate," he said.

How to best run G6 is the charge of Amorosia, who famously wakes each morning at 4:30. That's when he turns the light on for a company that has left the light on for 55 years.