How to Start, Run, and Profit From a Motel Business

By August 8, 2022August 15th, 2022hotels

Make no mistake, motels are having a moment. 

From super-sitcom Schitt’s Creek to the cult Netflix show Motel Makeover—which followed the successful founders of the June Motel as they set up another site—motels are no longer seen as the hotel’s downmarket cousin. Instead, they’re its colorful little sister. 

But despite appearances, modern motels aren’t just about Insta-worthy design, cute corners, and “rosé all day”. To see success from the start, motels need to operate at maximum efficiency.

This means minimizing costs, making life easier for you and your team, and delivering streamlined services to a demanding, smartphone-dependent clientele. It means ensuring security and coordinating turnarounds super-fast. 

It also requires multiple revenue streams to ride out economic uncertainty, easy-to-use systems that scale, and customer service that modern guests will rave about. 

And that means tapping into technology that’s as cool as the perfect shade of “Millennial pink” (or, dare we say, “Zoomer green”?).

Here’s how to set up your own motel for success, without going down that proverbial creek…

Want a modern motel with momentum? Put your guests first, exceed expectations, and reimagine the guest experience with Operto Guest.


The motel business and the potential for profit

The Mountain Modern Motel in Wyoming has successfully reimagined the motel experience

Cool, colorful and creative, with minimal overheads once up and running (especially when using hyper-connected tech) and a fast-moving clientele, motels offer serious profit potential.

Motels’ less-than-stellar reputation means many a bargain is out there to discover, ready to be “flipped” from fading to fabulous, securing serious profit potential for investors.

With any hotel business or property purchase, we highly recommend: 

  • Securing financing or a business loan first before searching seriously

  • Figuring out your budget

  • Calculating how much you can invest in renovation

  • Drawing up a business plan

  • Getting clear on the type of motel experience you want to offer

  • Figuring out how much you need to budget for hospitality labor costs (especially staff wages)

You should also check for building regulations and planning projects in the city before buying, schedule an inspection of the motel property construction and land, check out (and even stay in) the local competition to scope out style, demand, and local attractions; and negotiate the best deal.

If renovated stylishly, motel rooms can offer bijou accommodation that wows from the start. 

The casual model (which attracts visitors who may have lower expectations than they would of a high-end hotel) frees you to pick and choose the services you want to offer, and thrill guests with touches they never imagined, without requiring excess investment.

Food truck in vacation location

Partnering with a local food truck can be a great way to offer catering at your motel

This might include:

  • Partnering with a popular local food truck to offer on-trend in-house dining (instead of bearing the cost and risk of starting your own hotel restaurant from scratch)

  • Doing away with the front desk, and replacing it with a profitable bar or coffee shop, in favor of the digital self-check-in welcomed by modern travelers

  • Enabling staff to communicate directly with guests via smartphone messaging for a more responsive and friendly service

  • Offering different levels of rooms from basic motel to unexpected luxe for more upsell and revenue opportunities

  • Creating Insta-worthy aesthetics to encourage free user-generated content and marketing (meaning guests taking great photos, share, and recommend your motel on social media)

  • Automating emails and messaging for efficient communication, a better guest experience from booking to check out, plus more and better reviews

How to start a motel business: Key considerations to begin

Of course, this is not an exhaustive list, but the following is a good starting point for a motel with mojo.

Seek investment opportunities

It’s difficult to arrive at an “average” motel price, but current listings for commercial real estate suggest that smaller, more rural hospitality industry properties are likely to set you back a few hundred thousand, while a thriving, already-profitable motel will cost closer to US$1-2million.

Focusing on tested-but-tired motels in profitable locations—such as near attractions, hospitals, and airports—will ensure your small business has steady visitors (and perhaps even cash flow). This will provide a solid foundation on which your revamped, modern destination motel can grow fast.

Consider construction

It can be tempting to blow the budget on the perfect property, but remember that’s only half the battle. Savvy renovation—even if only cosmetic, such as new paint or tiles—can transform an otherwise unattractive space, so make sure you keep enough money in reserve for construction and interiors.

Budget for at least 10-20% over your expected costs for unplanned snags or emergencies, and work with an architect or project manager, to keep the process ticking along on time and within budget.

Pick your people

Staff members smiling

Choosing the right team is a major consideration when starting your business

Alongside bricks, mortar, plumbing, and paint, your new motel will also need a team you can build your business around.

Consider: How many members of staff will you need? Can you keep the team lean by installing digital technology instead of hiring more staff (see more below!)? Will they all be on-site, or mainly remote? What skills will you require (such as retail, customer service, or barista experience)? 

Where will you hire staff from and what will your hiring and onboarding processes look like? What work and customer culture do you aspire to?  

Design drool-worthy decor

In the Instagram and TikTok age, the aesthetics of boutique hotel trends are everything. 

Great design can help motels make a name for themselves. The June Motel in Ontario, whose Instagram page and decor of hazy pinks, yellows, blues, and greens has garnered it 285,000 followers and a Netflix show, consistently sells out its rooms.

And then there’s the Saguaro in Palm Springs California (pictured above), which uses a motel-style setting (with rows of rooms that overlook a sundrenched pool and courtyard) practically designed for Instagram, with vibrantly painted balconies and sunshine-yellow “daybeds” designed for lounging in selfie-ready style. 

Curating photographic corners will give your motel serious social appeal (not to mention enabling you to raise your room rates as bookings rise).

Get the word out

Airbnb Motel listing

Even the coolest newly-renovated hotel needs to get people booking

Even the most beautiful motel won’t get bookings if people don’t know it’s there. Your marketing strategy is crucial. 

Make sure your motel stands out by organizing professional photos and writing compelling listings on OTAs that clearly highlight how you’re unique to (and better than!) most motels or rooms. 

Don’t just stop at the standard places (such as Airbnb or Booking.com). Try local pages, or even niche sites such as digital nomad specialists, or accommodation sites that appeal to your target market.

For example, if you’re near great hiking spots, connect with hiking travel agents or tour companies who could shout about you to their customers; or if your place appeals to families, reach out to kid-friendly local attractions.

Stay connected

Remote working is here to stay, and modern guests will seek out spaces with excellent WiFi, workstations, and facilities that appeal to digital nomads. 

Unless you’re planning to offer digital detox vacations, this means installing the highest-speed internet you can, ensuring good phone signal, building in lots of outlets for phone and laptop charging, bright spaces, attractive desk areas—not forgetting excellent coffee—so people can work and play in style.  

Stay smart

Thermostat control with Operto Guest

Enabling smart devices such as thermostats enable remote energy management

Smart set-ups such as thermostats and noise monitoring devices can help keep everything connected, and ensure everyone is having a good time, even if you or your lean team of staff are not always able to be on-site.

Connecting smart devices to your PMS enables you to time device operations to guest check-ins and check-outs (so they are turned on automatically when guests arrive and turned off when they check out), and you can see guest data, stay dates, and smart device unit operations on a single dashboard.

Looking to connect and monitor all your tech in one place? Leverage technology to delight your guests and streamline your operations with Operto.

Cultivate community

Many motels depend on their standing within the local community to thrive, so reaching out to locals is a surefire way to raise awareness of your new business and foster strong links.

You might collaborate with a popular store, food truck, gallery, or theater to create a cultural program to get people through your doors, or include locally-produced toiletries in your bathrooms. 

Perhaps you decorate your spaces with works by homegrown artists, offer locally-roasted coffee, hire directly from the local catering college, train students from the more-deprived parts of town, or offer space for workshops for local kids or businesses? 

Making friendly links with existing events and locals will put your motel on the map.  

Diversify revenue

Mixologist showing how to mix cocktail

Putting on innovative events such as mixology workshops can diversify revenue sources

The bulk of your business will come from nightly stays, but diversifying your revenue can help protect you from fluctuating occupancy rates. Motels particularly lend themselves to creative solutions. You might consider: 

  • Replacing your front desk with a profitable coffee shop or cocktail bar

  • Working with a local food retailer and taking part of their sales for hiring your space

  • Installing a small store that sells everything guests see during their stay, from toiletries to locally-produced towels to the mug they were just served coffee in (see The June’s shop here)

  • Offering photoshoots for visitors in the iconic parts of your business (such as that wall with a popular slogan painted on it)

  • Hiring your common areas, outdoor space or events space out to local businesses for workshops, theater productions or small music gigs

  • Hosting workshops for yoga, meditation, crafting, or baking

  • Running mixology classes with your bartender for bachelorette parties and birthdays 

  • Organizing regular events for local residents to bring your business to more people

How to run a motel business by department

Operto digital front desk.jpg

Managing your guests’ stays via a digital access system is a gamechanger

Aesthetics may seem more exciting, but the systems that underpin your motel’s functioning are gold.

Setting up your motel digitally in a few key areas will also mean that you can eventually leave it to run like a dream without you—whether because you’re expanding, working to optimize your staff-to-unit ratio, or you want to sell at a profit. 

Simplifying processes and ensuring your staff follow those processes rigorously makes for sustainable and scalable business practices.

Booking 

Connecting your PMS to a guest experience software like Operto Guest means that digital tech can take over where your PMS leaves off, facilitating automated processes and workflows, and giving you more visibility across all your operations.

As soon as they book (either by OTA or direct), guests are sent: 

  • More details about their stay and property

  • Instructions for parking / arrival

  • Check-in code and details (and check-out policy)

  • Anything else they need to know for a good stay, including a welcome message

This establishes good communication right from the start and reassures guests, with no extra work.

Check-in

Digital smart lock Yale

Offering keyless access via a digital system makes check-in so much easier

A mobile web app means you can offer digital check-in alongside keyless guest access, so guests can independently access their room on arrival with a simple keycode.

Installing smart motel door locks means there’s no hanging around at a front desk after a long journey, and no risk of losing keys. Everything they need is in the palm of their hand. This adds extra satisfaction to the guest and removes much of the frustration often associated with check-in.

A digital check-in system like this also enhances security, as it shares the code with the guest directly, before deactivating the code once they check-out, and creating a brand-new access code for each new booking.

Enable secure and streamlined digital check-in using the power of tech. Simplify the guest experience and automate workflows with Operto Guest.

Front desk

Enabling digital check-in means that your staff are freed from being stuck behind a front desk, so they can be more agile and more helpful throughout the motel. What’s more, with less staff required at the front desk, the fewer staff you need overall to operate a well-oiled motel machine. 

Plus, you can free up that otherwise redundant space with an extra source of revenue (see our list above) or an inviting area that enhances the guest experience far more than waiting around to meet someone in person or picking up a key from an unwelcoming desk or unreliable lockbox.

Guest communication

Using a guest communication app establishes professional, friendly service right from the start. Guests can ask questions and find more information about their stay right where they have everything else about their experience—their smartphone.

A web-based platform enables them to communicate with staff quickly as though they were using a native app, but without the frustration of needing to download it first.

In this way, guests feel as though support is on hand at any time. Plus, digitizing the system means anyone on your team can reply promptly, without requiring a physically present member of staff to help. This makes answering questions much quicker, while also reducing your staff costs.

F&B and guest experience

Operto guide book recommendations

Offering guests a digital guide improves the guest experience

Communicating digitally, via the same system that coordinates the rest of the guests’ stay, means you can improve the guest experience from start to finish. 

For example, you can keep track of guests’ coffee orders, for example, and hand them their favorite latte after they check in. This adds impressive personalization that builds loyalty and provides tangible examples of good service that guests will remember in their reviews. 

With staff freed from mundane check-in and check-out tasks, they have more time to pay special attention to guests and personalize offers.

Similarly, a digital web app like Operto Guest can be integrated with platforms such as Google Maps, for tailored and interactive guides to local restaurants, coffee shops, bars, or other attractions. This helps guests feel at home, and see your motel as a real source of insight into the local area.  

Housekeeping and maintenance staff

Enabling digital communication by connecting your guest communication platform with your scheduling tool and staff management tool means that managers and housekeeping staff are easily notified when guests leave. 

Enabling them to see the schedule eliminates the need for clunky spreadsheets and printouts, and reduces the risk of missed or late cleans.

This ensures smooth turnaround times, excellent communication between staff even in the event of a last-minute check-in or late check-out, and no chance of guests arriving to an uncleaned room.

No more spreadsheets, no more missed cleans.

Automate your staff scheduling with Operto Teams.


  • Unlimited task rules based on check-in, check-out, mid-stay, mid-vacancy, and on a set schedule

  • Communicates with your PMS for the latest booking information

  • Scheduling Calendar, Master Calendar, Staff Portals

  • Stripe and Quickbooks integrations

  • Pull reports for payroll and billing

“Operto Teams is a great product with a terrific support team, we love it.”

Security

Digitizing booking, arrival, and check-in don’t mean compromising on security—in fact, it can improve it. 

Operto offers enhanced digital check-in so all guests are automatically screened before they arrive.

You can use this to automatically change used door codes for a new one to add an extra layer of security—all without you needing to be on-site, paying staff to keep watch behind a desk, or doing any extra admin work.

Reviews and repeat guests

Smart tech can also send messages at the exact right time to improve the number and quality of the reviews your motel receives on important spaces such as OTA listings. 

For example, automated messaging can send a request just before check-out, timed to each guest stay. This means you can ask for reviews when the guest’s stay is fresh in their mind, improving the chance they will leave one, and that what they write is positive. 

This in turn will encourage more bookings, for a virtuous review cycle that effectively runs itself.

Minimize operating costs to profit, scale, and exit

The June Motel has shown that it’s possible to redefine the motel experience and profit

Implementing each of these changes, and harnessing the full power of automation tools means you can build a profitable business and set it up to run without you or a full roster of staff. 

For example, The Annex in Toronto used Operto technology to reduce staff to just 1.5 per 24 rooms. Granted, it’s not a motel, but its experience in using hyper-connected tech to simplify operations and reduce costs still shows the power of rolling out technology to minimize overheads. 

Similarly, on a smaller scale, Danielle Dirks, operator of short-term rental business CozyHaus, used Operto tech to run her business so successfully that she was able to expand from one unit to 12, and later to hundreds of units as part of an entirely new venture.

Minimizing operating costs makes your processes more efficient and scalable, improves your experience as investor or manager, and frees your team to innovate and vastly improve the guest experience.

With less time, stress, and money spent on admin, you’re free to expand and invest further, scaling your business beyond a single motel, just like The June, whose creators opened a second site in Sauble Beach due to the success the founders experienced at their original location.

How to run a modern motel: Success through systems

Make good on the motel movement by setting it up for success from the start. Aesthetics are key, connecting with the community is great, and creating Insta-worthy moments is essential.

But the real secret to a successful motel is to design it around scalable operations and business practices—and automated processes alongside smart tech solutions make that possible. 

Investing in a new business is a prime opportunity to build a lean, systems-driven operation that uses a tool like Operto Guest to put the guest experience first while also simplifying all processes for staff and managers.

We can’t promise a smash-hit sitcom or Netflix series, but we’re confident that with Operto, the only creek you’ll be up will be a profitable, peaceful one.

Looking to invest in a motel that guests will love and you can leave? Prioritize the guest experience while streamlining systems with Operto.

Frequently asked questions about running a motel business

What do you need to have to start a motel?

To start a motel, you need a good investment opportunity, financing, an estimate of construction and renovation costs, an idea of who to hire, and what kind of motel you want to run. You’ll maximize success if you prioritize good design and excellent technology systems, that will reduce overheads and costs, and simplify operations so you can make great profit, scale fast, and exit (if you choose). 

What is a motel?

A motel is traditionally a roadside or small hotel, usually found in the US, which generally has rooms arranged around a parking lot outside. It’s traditionally considered to be downmarket and somewhere that only tired drivers would use for a night or two. However, motels have had a cultural revival with new and exciting motels starting up where guests book their visit in advance and enjoy unique vacation experiences.