Motel 6 is heading north of the border in its first expansion outside the United States.
Dallas-based Accor Economy Lodging, the owner of the budget motel chain, said Wednesday that it plans to invest $68.1 million ($100 million Canadian) over the next two to three years to build 10 new economy motels with a total of 1,200 rooms in the Toronto area.
"We have a lot of Canadian travelers staying in Motel 6 in the U.S.," said Georges Le Mener, AEL's president and chief executive.
"The Canadian economy was not very good in the early '90s. It has now recovered."
If it is successful in Toronto, Motel 6 plans to expand into other Canadian cities and start franchising efforts, he said.
The motel chain's focus on Canada comes after several years of working to increase its presence in the Midwest and Northeast.
Motel 6, which has traditionally been strongest in the southern and western United States, has 800 locations around the country.
Besides Canada, the 37-year-old motel chain is also eyeing expansion into Mexico, Mr. Le Mener said.
Motel 6 hopes to attract Canadians by offering the lowest-price rooms.
Though chief rival Econo Lodge has no motels in Toronto, Motel 6 will face competition from Quality Inn and Comfort Inn.
"The market is much less competitive than in the U.S.," Mr. Le Mener said.
AEL will open three Motel 6 inns in Burlington, Whitby and Brampton and a Studio 6, the chain's extended-stay motels, in Mississauga early next year. Other Motel 6 facilities are slated to open in Markham, Scarborough, Mississauga and Vaughan.
In addition, two other Studio 6 locations are planned for Brampton and Markham.
The new motels are expected to create 250 new full- or part-time jobs in the Toronto area.
Accor SA, AEL's parent company, is not a stranger to Canada. The Paris-based company, the world's third-largest hotel operator, owns eight Novotels, a group of upscale hotels, in Canada, including five in the Toronto area.
AEL has no plans to expand its recently acquired chain of Red Roof Inn economy motels into Canada, Mr. Le Mener said.
