My uncle wants me to invest in a small motel (30 rooms) in a mid-size Southern town. The 'Patel motel' tradition is real — I know dozens of families who built wealth this way. But with Airbnb competition and rising maintenance costs, is it still a viable investment? Anyone curren...
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Operating 2 motels (total 85 rooms) in Georgia since 2019. Honest answer: it's still profitable but HARDER than it was 15 years ago. **The good:** - RevPAR has recovered post-COVID and is strong for budget motels near highways - Brand affiliation (Choice, Wyndham) gives you booking systems + loyalty programs - Tax advantages (cost segregation study saved me $80K in year 1) **The challenges:** - Airbnb hasn't killed budget motels but has eaten into midrange properties - Staffing is the #1 problem — housekeeping is nearly impossible to hire - OTA commissions (Expedia, Booking.com) take 15-25% - PIP (property improvement plan) costs are brutal when franchise renewal comes For a 30-room property, expect to invest $1.5-3M depending on location and condition. Aim for 50-60% occupancy to break even. If the location is near a highway exit with limited competition, go for it.
My family has been in the hotel business for 3 generations. The key now is location and brand. An unbranded 30-room motel will struggle. Get a Wyndham or Choice Hotels flag — the booking engine alone doubles your occupancy. Also look into the SBA 504 loan program, very favorable for hotel purchases.
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