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Why La Quinta Is Not Just Another Cheap Motel Brand

5 minute read

La Quinta, the hotel company undergoing an IPO of its stock this week, is a limited-service brand favored by travelers on tight budgets. At some properties, rooms start under $50 a night. But La Quinta is not just a run-of-the-mill cheap place to stay.

The IPO of La Quinta Holdings, backed by the Blackstone Group, didn’t get off to a particularly good start. On Wednesday, the IPO price was set at $17 per share, down from the original projected price range of $18 to $21. Despite the lower price, at least initially La Quinta shares barely moved, hovering around the $17 mark through midday Wednesday.

While investors seem uncertain about La Quinta, in many ways middle-income, price-conscious travelers—who truly represent the vast majority of travelers—have already offered their verdict about the brand: They’re fans. Here are a few of the reasons that La Quinta stands out in a good way in the crowded mid-scale lodging category.

Low room rates. It’s rare for a La Quinta Inns & Suites to run over $100 a night. La Quinta is usually lumped into the mid-tier limited-service (no restaurant) hotel category with brands such as Hilton’s Hampton Inn, Holiday Inn Express, and Marriott’s Fairfield Inn, and LQ rates generally match or undercut the competition. Because all of these brands tend to fill up with business travelers Monday-Friday, weekends are slow periods, and La Quinta entices last-minute bookings with weekend deals from $49 per night.

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Travelers tend to think of La Quinta first and foremost as a good value, and that’s reflected in survey ratings: A few years back, the brand was named the second-best midprice hotel (after Hampton Inn) by Business Travel News, and in a more recent traveler survey, conducted by Temkin Group, La Quinta and Best Western received the highest scores of all the industry for best customer experience.

No-hassle reservations. To reserve a room, you must give a credit card number, right? Not at La Quinta. Starting in 2012, the company began offering an Instant Hold option, allowing one-the-go users to reserve a room via a mobile phone with just a phone number. The idea came about because somebody realized that travelers liked to look up hotels and last-minute available with their phones, but it was a pain to enter a credit card number on the device. So La Quinta now lets guests place instant holds on a phone for up to four hours (you’re expected to show up in person by then), and also allows you to browse TripAdvisor reviews of the property and see Yelp ratings of restaurants in the area without having to hop over to another app.

Another unique reservation policy from La Quinta involves advanced bookings. The majority of hotel brands give discounts for reserving two or more weeks ahead of arrival, but there’s usually a big caveat: At Hampton Inn, for example, the tradeoff to a 15% room rate discount for an advanced booking is that payment must be made in full when making the reservation, and no changes or cancellations are allowed. La Quinta offers discounts of 10% to 20% for rooms reserved at least 14 days in advance, but there’s no prepayment required, and cancellations can be made with no penalty up to 24 hours before expected arrival.

Good amenities, minimal nickel and diming. Free Wi-Fi is standard, and rooms are outfitted with flat-screen HDTVs. Several years ago, the company implicitly acknowledged that guests would want to enjoy their own entertainment via laptops and other devices, so it basically gave up on upselling them with pay-per view TV movies and shows. “We have retired that model and replaced it with a solution that instead of preventing guests from plugging their own devices to the TVs in hotels encourages them to do so,” a La Quinta executive explained in 2011.

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Also, breakfast is always free for guests, and almost all properties allow pets to stay at no additional charge. Most properties have pools too.

More and more locations. The overall mid-tier hotel category has pretty obvious mainstream appeal for travelers. “Limited-scale, mid-price properties are probably in the sweet spot in attracting middle-income America from the leisure standpoint” and business travel, Jan Freitag, senior vice president at the lodging research firm STR Inc., told Bloomberg News in a story about the company’s IPO.

Even in a category that’s been marked by robust growth over the last decade or so, La Quinta’s expansion has been especially impressive. The company now boasts more than 800 locations in the U.S., Canada, and Mexico, up from around 500 in the mid-’00s. Last spring, after a particularly big quarter for new openings, a company press release cited data from Smith Travel Research, which showed “La Quinta grew faster than any other select service lodging brand in its main competitive set in the years 2002-2012, growing by more than 141% in that period.”

A report by Skift on the IPO notes that La Quinta currently has 187 new properties in the pipeline. That includes 17 new locations in Mexico, a market that much of the hotel industry has overlooked in recent years, and where, despite the company’s Latino name, there are only five operational La Quintas right now.

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