G6 moving forward with growth in Mexico
03 FEBRUARY 2016 8:46 AM
G6 President and CEO Jim Amorosia says the first stage in plans to grow globally begins with the opening of five properties in Mexico this year.
LOS ANGELES—More than a year after announcing plans to expand south of the border, G6 Hospitality President and CEO Jim Amorosia said he still sees Latin America as his company’s biggest opportunity for growth.
He said expansion into countries such as Mexico, Bolivia and Ecuador will encourage more global travelers who come to the United States to stay at Motel 6 and Studio 6 properties.
“We believe that we’re going to get cross (pollination) as it goes forward,” Amorosia said during a break at the Americas Lodging Investment Summit. “As the burgeoning middle class occurs in Latin America, first they’re going to travel in their domestic markets. But as that group starts to develop disposable income and start looking at leisure, we think they’ll start looking beyond their domestic markets.”
The company plans to open five hotels in Mexico in 2016—three under the Estudio 6 brand and two under the Hotel 6 brand—and Amorosia said G6 will break ground on several more projects that won’t open this year.
“We have agreements pending in Bolivia and Ecuador,” he said. “And we’re working feverishly on agreements in Peru and Brazil. So we’ll be all across North and South America.”
While Amorosia sees southern expansion as the next step for his company, it’s not the last one. He said he believes partnerships in Asia, particularly India or China, would make sense for G6, but he said those plans will have to wait until the company has a better foothold in Latin America and South America.
Domestically, Amorosia sees growth opportunities with its extended-stay brand Studio 6. There are about 100 Studio 6 properties, but he said “the sky’s the limit” for that brand.
“It’s really a question of finding the relationships with the right developers,” Amorosia said. “So one of the things we started doing in 2015 and will continue in 2016 is expanding our universe of development partners. We’re looking not only at people who have been historically connected to the hotel industry on the Studio 6 side. … You’re able to also look at people who have land connected to an existing establishment they’re working with—could be restaurant, fast food, retail, apartments, whatever the right combination is.”
G6 officials recently announced the opening of their 1,300th property—a Motel 6 in Bakersfield, California—in late December, capping off what Amorosia described as a successful year.
“We were very pleased with 2015 as we were with the year prior,” Amorosia said. “Since Blackstone bought us in October 2012, and they gave the ability to invest in our core assets from a renovation and asset management standpoint, we had tremendous growth.”
He said the company saw just shy of 10% revenue-per-available-room growth for owned assets in 2015 and more than 9% for the entire brand, which he attributed in part to a lift from renovations.
G6 opened 141 properties in 2015 and has 96 properties in the pipeline.