Case Type: improve profitability.
Consulting Firm: Simon-Kucher & Partners first round job interview.
Industry Coverage: tourism, hospitality, lodging; E-commerce, online business.
Case Interview Question #00561: Our client Motel 6 is a major chain of budget motels with more than 1,000 locations in the United States and Canada. Currently Motel 6 is owned and operated by Paris based French hotel group Accor Hotels (Euronext: AC, LSE: 0H59). As of May 2012, global private equity firm 
The Blackstone Group has agreed to acquire the chain for $1.9 billion.
As one of the largest owned and operated hotel chains in North America, Motel 6 has been providing affordable lodging to travelers for many years. For the past 3 years, however, Motel 6′s profit margin has been decreasing. Our client has asked you to determine why its profit margin has declined over the past three years and how to remedy this issue. How would you go about the case?
Exhibit 1: Client Company’s Costs for Years 2009 – 2011
| 2009 | 2010 | 2011 | |
| Labor | $12.8 | $13.1 | $12.9 |
| Maintenance and Supplies | $3.1 | $2.7 | $2.8 |
| Marketing | $4.4 | $4.9 | $5.4 |
| Misc. Fees (Rental & Sales) | $2.8 | $2.9 | $3.0 |
Exhibit 2: Industry Costs for Years 2009 – 2011
| 2009 | 2010 | 2011 | |||||||
| Super 8 Motels | Travelodge | Comfort Inn | Super 8 Motels | Travelodge | Comfort Inn | Super 8 Motels | Travelodge | Comfort Inn | |
| Labor | $12.5 | $13.6 | $13.0 | $12.5 | $13.4 | $13.0 | $12.6 | $13.4 | $13.1 |
| Maintenance and Supplies | $3.1 | $2.7 | $2.7 | $3.0 | $2.8 | $2.5 | $3.0 | $2.8 | $2.4 |
| Marketing | $4.4 | $4.3 | $4.5 | $4.1 | $4.0 | $4.2 | $3.9 | $3.8 | $4.0 |
| Misc. Fees (Rental & Sale) | $0.5 | $0.5 | $0.6 | $0.9 | $0.5 | $0.6 | $0.8 | $0.4 | $0.5 |
Additional Information: (to be given to candidate if asked)
There is no information on revenue: “The candidate should acquire all relevant revenue and cost information”