By William R. Deutsch
Editor’s note: This article was prepared from an address presented by Mr. Deutsch at the recent Water Conditioning Foundation Convention in Chicago. The author is executive director of the American Motel Association of Illinois.
Reviewing the tremendous growth that has taken place in the motel industry in the past few years is probably the best way to get an idea of the market potential that motels offer the water conditioning industry.
In 1951 there were approximately 600,000 in what were then known as tourist courts, tourist cabins, and tourist camps. At that time, very few motels, as we know them today, actually existed. Today there are more than 1.5 million rooms and several hundred motels are being built annually.
Hospitality Magazine recently released a survey that showed there are approximately 63,000 motels in existence today. The average motel size for a new motel is 55.6 units, but the luxurious 100 unit motels have become a standard for construction and the most widely known in the last year or so; in fact, you could say the typical motel of today has approximately 103 rooms, a restaurant that will seat 16 people, and has an average of 18 employees who work full time in the restaurant. In addition, there will be another 8029 employees that will work full time in the lodging end of the business. It will have a large swimming pool, usually headed the year round in northern climates, and the motel owner has either included or plans to include convention facilities and plenty of room that can be converted to meeting rooms. Television, telephone, wall to wall carpet, tile baths and showers, and background music are now considered as standards of today’s motels.
There is a good chance that the motels will be located within five minutes of the city’s downtown area, and chances are that the motel will offer free transportation to and from the business district.
In the 1950’s motels were found mostly in the Far West and southern regions. Today the Midwest and the eastern regions of the United States have an almost equal number of motel rooms that have been constructed din the past three years. It is estimated in the mid-western and eastern parts of the United States that there are approximately 30,000 motels.
While motels being built today will have from 60-100 rooms, established motels in desirable locations and under progressive ownership as a rule have been expanded to 50-076 rooms in metropolitan areas, and 25-35 in rural areas. About 50 percent of all the motels built today include restaurants, and about 48 percent of the new ones have swimming pools.
About 1958 chain and franchise motels began to appear. The two leading ones today are Quality Courts and Best Western. Each of them boasts of more than 600 members. Holiday Inns and Howard Johnson Motor Lodges began to appear in several areas at about the same time.
While these chain and franchise groups have grown tremendously in the last few years, they represent less than 10 percent of the motel market.
The annual gross sales and income last year for motels reached $2,859,000,000. It was estimated recently that 1,900,000 guests are accommodated each day in motels.
It is interesting to note some of the many services that are being incorporated into new motels – closed circuit television, key clubs, gymnasiums, barber and beauty shops, and even bomb shelters.
Many motels now have their own laundries, and in 1963 the installation of laundry facilities is expected to be widespread as a result of increases in costs of having laundry done by outside services.
Even though the motel business is expanding at a tremendous rate, it isn’t all a bed of roses. Operating costs tend to increase too rapidly. Although the average room rate has climbed to $8.40, or an increase of about 5 percent since 1960, operating costs have increased 4.5 percent during the same period. The price-cost squeeze caused a drop in the 1961 profit picture of almost 3 percent. It should be mentioned here that in many areas, the Chicago area for example, motels have recently been enjoying an occupancy rate of 80-60 percent, compared with hotels at 60 percent.
It all adds up to the fat that the motel business offers an excellent market potential for the water conditioning industry. Many motels have installed water conditioning equipment, and have found that housekeeping costs are reduced substantially, and that guests are highly pleases. And with restaurants, swimming pools, beauty shops, and laundries, the need for water conditioners becomes greater and greater.
When a water conditioning salesman can show a motel manager that an investment in water conditioning equipment will relieve his price-cost squeeze, and at the same time put him in a better position in the “full occupancy” competition, he has an excellent sales story to tell.
Fred Lindsay, consultant to the Water Conditioning Research Council, is conducting a study on the use of water conditioning equipment by motels. While the study is not yet complete, Lindsay says he has received highly encouraging reports from both water conditioning dealers and motel operators. When completed, Lindsay’s study is expected to provide the industry with highly valuable data for use in developing the motel market.
Jerome Peterson kept focus on the motel study through a series of articles and editorials: Making the Most of Motels, April 1963; Motel Study Now Underway, September 1967; Motel Study To Show Water Savings, June 1968 and Motel Study Results Are Dramatic, March 1969. These were augmented by A Boon to Motels by Wilbur Hess, Executive Director, WCAI, June 1964 and Motel Study Progress Report: Soft Water Found to Provide Outstanding Benefits by Gene Burton, WCAI, November 1968). The entire June 1969 issue was devoted to Motel Study: Motel Cost Savings From Softened Water.
Updated facts and figures from the American Hotel and Lodging Association’s 2007 Industry Profile. All figures are for year-end 2006.
Total guestrooms: 4,389,443
Average room rate: $97.78