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Remember when motels had restaurants? Some still do

Op-Ed: Andrew Morgan says that while times have changed, there will always be strong demand for food and beverage operations at certain motels.

I recently stayed at a motel I had not stayed at for more than 20 years. I thought it would be good to try an alternative and have a look around. One of the other reasons I stayed there was that it was one of the few in town that still had a restaurant, and I knew I wouldn’t feel like getting back in the car and going back out after a long day.

It seems that all or at least most of the other motels in town over the years had closed or repurposed their onsite restaurants. Unfortunately, when I arrived, it was obvious that the restaurant was now being used as a storeroom rather than a food and beverage outlet.

First published in the latest edition of Resort News. Read it HERE

Heading back out to look for somewhere to eat, there was no shortage of options within a few minutes’ drive, from pub or club fare, fast food and restaurant venues. Historically, a lot of these options were not plentiful years ago.

Today it is clear that for different reasons, including more competition, guests’ employment demands, higher operating costs and operators wanting to simplify their lives and limit their working hours (and so on), there are far fewer restaurants or food outlets within motels.

AdobeStock by jdoms

However, I recently saw two formerly closed motel restaurants reopen since the start of the year. This is interesting as there must have been an opportunity identified to endeavour to recreate this former income-producing area of the business.

To expand further, one included the owner being so impressed with the skills of a particular chef that they employed them to reopen the restaurant. The other leased the restaurant to a chef who has reopened the former restaurant. Both have the opportunity to appeal to the in-house motel guests and build a following of a local nature, which good chefs often achieve.

There have been many changes to the way motels operate over the last 25 or so years, particularly regarding their income sources. Food and beverages was an extremely busy and lucrative part of the business model. Travellers for business purposes surrok By Vector Traditionunded the bar whilst others dined alone or as part of a larger group, often entertaining their local customers.

Families who travelled all day were glad to be out of the car and happy not to go elsewhere to get hungry kids fed. The motel owners ran the reception at the same time as waiting tables, all the while getting to know their customers and entertaining them from behind the bar. A full multi-tasking session, that occurred five or six nights a week.

Photo by Sander Dalhuisen on Unsplash

That was then, and today we see a different operation being more commonplace. One where the dining side of things is not as prevalent. Many have been closed and sit dormant or have been transformed into alternative income-producing areas, such as additional units or meeting rooms.

There are probably four main changes that have occurred over the years that may help to explain this:

  1. increased competition,
  2. higher operating and compliance costs,
  3. guest’s changing work life,
  4. the motel owner/manager’s requirement for more of a work/lifestyle balance.

There are far more dining options available today than there were 25 years ago. Large pubs and taverns, sporting clubs, speciality restaurants and fast-food options have grown exponentially over recent years.

In many towns often one can often find half a dozen or more eateries within walking distance of an accommodation. This makes it extremely difficult for a motel to retain its guests to dine onsite. It is often not the case however in smaller towns, where dining options may be more limited. In towns with smaller populations, the motel restaurants without that high level of competition are often very strong food and beverage operations.

The second change is the increased cost of operating a food and beverage business. Several factors contribute to this, including the rising cost of groceries. Other pressures include the overall cost of living, more stringent government and council compliance requirements and their associated costs, as well as higher employment expenses.

AdobeStock by Quang

The third change is today’s employment requirements and changing work life, largely with technology. The increased mobility of people and being able to work more effectively outside of the office means more opportunities to work from a motel room at night. Every work-related traveller has a portable office wherever they go.

A mobile phone, tablet, or even a “bulky” laptop allows one to be just as productive outside the office as in, thereby changing the way travel, accommodation, dining, and evenings are spent whilst away from home. Guests can have a quick meal, then start working from their iPad back in their room instead of remaining in the restaurant through the night. This limits the social side of things, travellers could meet new people in the restaurant or bar and stay on to network and socialise (in person). Technology today means everyone wants everything immediately, so getting back to the iPad and punching out those emails demanded by the customer now takes priority.

The final change is an owner/manager’s work/lifestyle balance.  Many motel operators have changed the way their businesses operate by focusing on accommodation and moving away from the food side of the industry. The higher profit margin from accommodation over food and beverage is a catalyst for this change. Also, the added requirements of additional employees and the motel operator’s increased labour and involvement in the dining area take away from that desire for a better work and lifestyle balance.

Photo by Eaters Collective on Unsplash

Although I have outlined why things may have changed, there will continue to be a strong demand for food and beverage operations within certain motel and other accommodation facilities, based on location, clientele base, larger corporate-based properties, and others. The mix of accommodation, dining, and conferencing within the one facility does have its appeal for segments of the market.

Those looking to acquire a business of any kind do not buy unless they see some level of upside they can build upon. Motel buyers within the market are always looking for something that can offer added value, and the opportunity that an under-utilised area within a motel presents, such as a closed or non-profitable dining area, can be a great way to add value without a massive capital outlay. This makes a vacant area within the property (such as a former restaurant) an asset to have.

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