Convert a small motel to AirBnB?

Question

Been searching but can't quite find what I'm looking for.  There is a open motel with 12 units that is run like a typical motel, except with someone who manages the bookings and cleaning from offsite (no main office).  Each unit is either two queens or a queen and a pullout.  No kitchen, just microwave and small fridge.

Thinking about updating all the rooms (either individual looks or all uniform) and run it as 12 airbnbs.

Can you tell me if 1) this is something feasible, and 2) possible pros/cons as well as things I should know/ask?

Considering maybe keeping one unit as an onsite property manager if needed.

Appreciate the help in advance!

Kristin Zajac · Answer

Hey Dan! I own a 13 room ski lodge in Vermont that was previously run as a hotel and I now run as an STR. When I bought it I considered renting the rooms individually, but I didn't want to deal with 13 different guests at a time. I rent the entire place to large groups, one at a time, and it's going fantastic. People love being able to rent the whole place out and it's pretty easy to manage. It's lodge-style (you can see a link to my listing on my BP profile), so it's a single building that has a great room, game room, I added a kitchen, etc. and it basically functions as a huge house. I get that your situation is different: I have thought about buying a motel like what you are looking at, and what I would do in that circumstance would probably be to (zoning permitting, etc.) put on an addition that includes a large common living room and a kitchen/dining space, and again rent to 1 large group at a time. I am doing about 2X the revenue that the previous owner did as a 13 room lodge, as 1 large STR, so I strongly recommend going that way if at all possible! And of course, if the numbers make sense in your market. :)

Happy to chat with you to share more learnings if you'd like!

Nick Tran · Answer

Following thread. I also have the same idea as Dan. Looking to aquire motel in colonial VA beach. Waterfront views with it own fishing pier. I want to covert to str. Need v rehab is in 90s style . But want to have a common hangout area. Maybe sell some convience items  for guest and fishermans .Would love to chat with anyone with similar experiences. @kristin love your idea. I had similar ideas to rent out to large group for events and to individuals also. @dan how is going so far?

Jonathan Greene · Answer

Who stays there now and what town is it in? If the existing clientele is motel clientele, you would have to make substantial upgrades to get the extra money out of expectant Airbnb rates and you would have to know that those upgrades and higher-end amenities would bring more of an Airbnb clientele. Not that Airbnb is better or worse, but much more expectations from them and reviews that could tank the place when a motel churns money and is what it is, but has more staff.

Alex S. · Answer

Account Closed Can you explain the "why?"  AirBnB tends to attract folks looking for something bigger and/or more amenities than a hotel.  Do you think you'd make more returns listing it on AirBnB and paying their cut?

Account Closed · Answer

@Jonathan Greene  Thanks for the response/input.  I definitely will look into the license aspect.  Good idea about adding amenities!

Alex S. · Answer

I would like to retract my previous post.

The Magnolia Network is doing a show called (re)MOTEL where people buy old shoddy motels and turn them into STR-esque fancy places with fine decor and design. https://magnolia.com/watch/sho...

Account Closed you might be on to something!

Alex S. · Answer

This is a really interesting concept to me.  It just seems like we are blurring the lines of boutique hotel 12-unit hotel vs. STR.  I'm not sure the motel realities (shared walls, tiny bathroom, boring rectangle shape) could demand a high enough price per night.  I love the idea of buying an old motel, renovating it, and then charging higher rates...but I don't see AirBnB being the right clientele.

I have done my share of hotel stays for my W-2 job and I hate the slow check-in process, so the plan to eliminate the office and book online sounds brilliant.  You might have to train guests...because motel guests typically expect to walk up to the counter and buy a room.  I'd love to hear how it goes!

Kristin Zajac · Answer

Hi Jerry - I think you are at the scale where my model of renting to one group at a time won't work, so you have to decide if you want to run a motel with employees or some sort of STR with individual room/floor/wing rentals. Although I will say that I was not able to get an insurance policy from either STR insurers or hotel insurers when I was considering a model when guests under separate reservations would encounter each other in common areas. You could try though! Best of luck!

Jace Perry · Answer

I am under contract on a 41 unit, how would you suggest best optimizing a motel with that many units? It is located on a main street downtown area.

Leon Lee · Answer

Potentially a nice idea but not without problems:

1. Many people rent Airbnb instead of hotels/motels because it is actually cheaper if you have a large group. Motels usually come with smaller single room.

2. They like fully stocked kitchen for cooking, which can be challenging to cadd in a motel room

3. Motel taxes seem to be higher than those of short-term rentals, which can kill your profits quickly.

4. Most motels are not built in great areas, which may limit your nightly price as upgraded Airbnbs.

Best

Lee

Convert a small motel to AirBnB?

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