This article originally appeared on JLL Real Views.
In the heart of Palm Springs, a once nondescript Howard Johnson motel with an on-site Denny’s restaurant is now the Ace Hotel & Swim Club, replete with outdoor fireplaces, live music by the pool, a vintage photo booth and Middle East-meets-California fusion dining.
The Drifter, once a rundown, dodgy edifice in New Orleans, now offers specialty coffees from La Colombe and poolside craft cocktails for guests staying in minimalist-style rooms.
The Vagabond in Miami, a former dive motel built in 1953, today has rooms with hypo-allergenic Italian bedspreads and stenciled geometric wall art.
Across the United States, hoteliers and developers with an eye for a great location and an affinity for Americana are buying fifties and sixties-era motels and giving them top-to-toe revamps, while making sure they retain the retro aesthetic that attracts style-savvy travelers. The trend has picked up so much steam that it has transformed the very notion of a motel – from one of a pit stop to one of a destination.
“These projects have removed the stigma of the motel experience,” says Geraldine Guichardo, VP of Americas Hotels Research at JLL. “There is no longer the assumption that all motels are degraded properties you pass on the road. The idea around the motel is now enhanced.”
A formula for success
The motel — a word which fuses “motor” and “hotel” — used to be the no-frills mainstay of the weary and budget-conscious road-tripper. As modern hotel brands have reclaimed these uniform spaces, a fairly universal approach has emerged. Designers tend to keep the overall architecture and trademarks of the building intact – as well as the exterior corridors, motor courts and small swimming pools. They often throw in a neon sign or two, so the establishment screams “hip vintage.”
But successful moteliers also include the necessary upgrades demanded by the traveler, Millennial or otherwise, who likes the idea of staying somewhere unique but doesn’t want to sacrifice comforts like high-thread-count sheets and fair-trade coffee.
In Napa Valley, for example, the Calistoga Motor Lodge — formerly the Sunburst Motel — fits right in with the aspirational vibe of the area, which is known for its Michelin-starred eateries and bountiful vineyards. Its grounds include three soaking pools, filled with water from local geothermal springs. The amenities range from a mix-your-own mud bar in the spa and pour-over Equator coffee in the rooms.
“In a market like Napa, a place like the Calistoga Motor Lodge makes sense,” says Guichardo. “A motor lodge with a spa that complements the vineyards and the wine experience — travelers want that quaint, simple, retro experience.”
Location is key to the success of any revamp. “When you have a market that is undergoing a real estate transformation, motel developers have the opportunity to be part of the market’s evolution and can benefit from the anticipated additional demand the market will observe,” Guichardo says.
The Vagabond Hotel in Miami, for example, sits on Biscayne Boulevard (which runs off from historic Route One), a stretch known for its craft breweries and art galleries. As a consequence, the Vagabond draws in design-savvy travelers.
For hoteliers considering a substantial makeover of an existing motel property, seeing thriving adjacent properties, both residential and commercial, “offers some level of assurance,” Guichardo says.
“If they see new restaurants coming in and multifamily complexes going up, with residents who have guests from out-of-town who can stay at the local motel, it makes sense for a hotelier to follow suit and create a new lodging product that’s in line with the cool feel of the neighborhood,” she says.
But it can also go the other way. Some hoteliers take these renovations to the next level by simultaneously sprucing up retail or restaurant properties in the immediately adjacent area, creating, in effect, a hip district.
More money, more problems
Despite the success seen by a number of these new motels, Guichardo says that, like every incipient trend, this one has its challenges. In order to reap the desired profit from their makeovers, many hoteliers need to charge rates that are double or even quadruple the rates of the original motel. Certainly, if a motel’s prices rise from $69 a night to $169 to pay for all the sophisticated touches, some travelers may elect to stay at a recognized hotel brand instead, a place where they know what to expect.
Investors entering the space need to be sure there is enough demand from cash-rich, minimalist travelers. Market research is key to understanding what visitors to an area value, Guichardo says.
Developers should also be cautious of focusing too squarely on Millennials, Guichardo says. While they “make up a considerable proportion of the lodging demand and are known for prioritizing experiences,” Millennials too are pairing off and having families. This may lead many to seek a more conventional hospitality experience.
While there are clear hurdles to a successful revamp, it’s clear the mass perception of a motel stay has changed, and more roadside eyesores will likely go the way of the Ace.
“They’re no longer a place where you pull up blindly after a night of driving,” says Guichardo. “Motels are a place you may want to consider far ahead of time, while planning a vacation. Some are so popular, there’s a waiting list.”