So Long $8 Room, Hello VCRs and Fluffy Towels : Motel Prices Rise With Boost in Service

The motel room was little more than a bed and a shower, but for years a tired traveler could find lodging for less than $10 along every major highway that crisscrossed America.

With names like Motel 6, Super 8 and Western 6, at least a dozen large chains promised a clean room, clean sheets and perhaps a coffee shop nearby. And their $6 to $8 room rates were the same at every location.

The $8 motel pretty much disappeared in the inflationary 1970s, and these days it is nearly impossible to get just a bed and shower. Serving ever-more-demanding guests, these economy motels and hotels today are as sophisticated in some ways as many of their more upscale counterparts.

At Motel 6, which began advertising for the first time in 1986, guests now get in-room telephones, satellite televisions with free movies and fluffier towels.

In Santa Ana, the Super 8 Motel competes for business with three nearby all-suite hotels. The inn’s lobby resembles those in fancy hotels, with plush chairs, plants, paintings and an adjoining restaurant.

And at budget McSleep Inns, to be opened later this year by Quality International, video cassette players are expected to be standard in every room.

“It’s budget but with a twist of luxury,” said Ray Sawyer, president of Ft. Worth-based Budget Host Inns, which calls itself a luxury budget chain.

“The no-service market has disappeared,” said Randy Smith, president of Smith Travel Research in Hendersonville, Tenn.

“We were traveling West in the early ‘70s, and all we expected or wanted was a good bed to sleep in. Today even budget-minded guests expect more,” Smith said.

Motel 6, which opened in Santa Barbara in 1962, was the first major budget chain. By 1970, there were about 50,000 economy motel rooms nationwide. And it was in the no-frills era of the 1970s that budget motels and hotels became ever more popular along the interstate highways.

Smith said that after consumers began getting economy cars and other products, they wanted economy motels too. “Why would they spend $50 when they could get all they needed for a fraction of that,” said Dan Baker, chief operating officer of 3-year-old Travelers Inns, a limited service chain based in Fullerton that operates 19 motels.

The popularity continued to grow in the mid-1970s, when higher gas costs cut into vacationers’ budgets. And nowadays, saving money at motels seems to be standard for many price-conscious travelers who have become as loyal to Motel 6 or Super 8 as others are to Hilton or Marriott.

Of the 2.8 million motel rooms in the United States, 300,000 are considered economy--that is, rooms at inns offering limited services, Smith said. While the total number of hotel and motel rooms increased 4.2% last year, the number of limited service rooms grew 11%.

Even the most crowded lodging markets--such as Southern California--are getting more budget motels, and the inns are reported to be more crowded than ever. In 1987, an average 63.9% of the rooms at limited service motels were occupied each night, up from 63.4% in 1986. The occupancy rate for the entire hotel-motel industry was 62.9% in 1987, up from 62.4% the previous year.

Motel industry analysts said the growth of the limited service business is responsible for Motel 6 moving relatively “upscale” by offering more amenities. Hugh Thrasher, executive vice president of Motel 6, said the rooms haven’t gone upscale, they’ve just been “updated for the 1980s.”

Phones Next to Beds

And while televisions and telephones have been in Motel 6 rooms for years, until 1986 there were extra charges if guests wanted to use them.

“If someone is used to a phone by his bed at home, you don’t take it away from him in a motel,” said John Bonifield, a vice president at La Quinta Motor Inns in San Antonio.

“The guest wants limited service but he doesn’t want no service,” said Thrasher. Last month, Motel 6 moved its headquarters to Dallas from Santa Barbara, the last in a series of major changes for the company, which had become known as the sleeping giant in the budget motel industry.

The investment group of Kohlberg Kravis Roberts & Co. purchased the chain in 1985 and then spun off Motel 6 in a public offering.

Radio Campaign

In November, 1986, the company started advertising on the radio, and last year spent $6 million on its campaign that features a plain talking spokesman named Tom Bodett who reads “letters from satisfied guests” and invites listeners to give Motel 6 a try.

Thrasher said the radio campaign has worked wonders and is partly responsible for reversing a five-year decline in motel room occupancy. In 1987, chainwide occupancy was up six percentage points.

Another victim of company changes is the “nationwide” rate. The 6 in Motel 6 once meant $6 a night--anywhere. The nationwide rate grew to $17.95 before it was finally dropped in 1985.

“It became impractical,” he said. “It meant that we couldn’t build motels in some expensive markets, and in other places, at $17.95, the Holiday Inn was almost that much.”

Nationwide prices just don’t work, said Carol Bivins, a vice president of Atlanta-based Days Inn. “The best value might be $100 in New York. In Iowa City, it might be $30.”

While some budget chains are going upscale--Aberdeen, S.D.-based Super 8 has motels with room rates from $20 to more than $50--others are stepping down into the low-service market.

This year, Quality International in Silver Spring, Md., is planning McSleep Inns, with rooms that are 70% of the size of larger rooms at rates from $20 to $30 per night.

McSleep properties eliminate restaurants and meeting rooms that aren’t profitable at smaller motels, said Susan Donnerman, a spokesman for Quality.

But Donnerman said the rooms will have “thick carpet” and the same quality furniture as in full-service hotels.

TOP 10 LIMITED-SERVICE LODGING CHAINS

1987 Rank Chain Location Properties Rooms 1 Days Inn of America Atlanta 530 77,900 2 Motel 6 Dallas 440 49,500 3 Travelodge El Cajon, Calif. 496 38,800 4 Econo Lodges of America Charlotte, N.C. 451 36,200 5 Super 8 Motels Aberdeen, S.D. 512 32,700 6 Comfort Inns Silver Springs, Md. 363 32,500 7 La Quinta Motor Inns San Antonio, Tex. 194 24,500 8 Rodeway Inns Dallas 204 24,500 9 Red Roof Inns Hilliard, Ohio 186 20,300 10 Hampton Inns Memphis, Tenn. 147 18,900

1987 Average Rank Rate 1 $33-38 2 $20-25 3 Not provided 4 $32-37 5 $27-32 6 $37-42 7 $35-40 8 $35-40 9 $28-33 10 $35-40

Source: Economy Lodging Council; Laventhol & Horwath accountants