Motels competing against STRs

[Paul Sandhu]

There is a refinery in my town. 99% of my renters are contractors doing short term work at the refinery. A cheap motel is $400/week, and that's what I charge for a 2 BR STR. Over the course of 6 years, I've slowly taken most of the business from the cheap motel, mainly through repeat customers and referrals. The 3 main advantages of an STR over a motel room are being able to cook, doing laundry, and having more space.

The owner of the cheap motel sold it this month, but is helping run it.  The new owner used to be a welding inspector, a contractor, just like all my tenants.  Of course the new owner bought the motel with every intention of making money by doing a better job than the previous owner.  

What would you do if you ran the motel to compete against STRs? And what would you do as an STR owner to offset what the motel is doing new?

1. Motel puts in a food truck in the parking lot. People still have to pay for their food, and they can't cook for themselves. It may not be open 24/7 like the kitchen in a STR.

2. Motel provides laundry service. Guests might still have to pay for this service, and it may not be available 24/7 like it is in a STR.

3. Motel lowers their rates.  They are already the cheapest place in town, but I can go down on price if they do.

4. Motel lowers their rates.  I can keep a base rate the same for a bigger house.  $400/week now rents a 3 BR.

5. Motel lowers their rates. I can put a 3rd bed in all the 2 BR STRs.

6. Motel offers better service.  My renters get a place to shoot guns and hunt, my 40 acre back yard.

7. Motel puts in Smart TV's and faster internet.  I already have Smart TVs in half my units and 15.0 Mbps WiFi in all.

8. Motel has a cookout once a week or every few weeks for their tenants.  I can do the same, and I have a the capability to do it at an apartment complex that has 10 STRs.

9. Motel owner runs for city commission and tries to ban or limit STRs.  I need to be friends with other commissioners.