Driving back to Scottsdale from Durango last weekend, we noticed that there is a shiny new La Quinta motel going up in what can only be described as the middle of nowhere- more-or-less midway between Kayenta and Tuba City. For those who haven’t been to this area, it’s in the middle of the Navajo nation, and is extremely sparsely populated. There are some attractions within driving distance (Monument Valley, for example), but nothing that is particularly close.
Who does the analysis to determine that such a site makes sense? I can’t figure it out.
Why is it always La Quinta or Comfort Inn?
I’ve noticed a couple hotels like this. Out in the middle of nothing.
I was told maybe they are halfway between two places and that’s the need.
Trust me, someone figured out that it was worth the investment or they wouldn’t have done it. They don’t need to fill the place up every night, they just need to have enough guests during the year to make a small profit, and then do it over and over again. Personally, I’m glad they built it, because I now have another place where I can spend the night and take my dog along with me.
Looks like the project was in the works for a while - article from 2021…
And the construction appears to have some fits and starts - google maps from 2023 shows what looks like slow progress on the project…
“People are going to stop here as they go from here to Kayenta and on to Monument Valley,” Nez added. “(Tourists can also) go to Tuba City and on to the Grand Canyon. After Grand Canyon, they go back to Las Vegas. That should be the Navajo Nation Grand Circle.”
Nez said his administration is looking forward to doing more projects in tourism and trail development, including planning a visitors’ train on the nearby former Black Mesa and Lake Powell Railroad.
There’s a Shell station there, which means people will be stopping, and may decide they are ready to call it a day.
It’s a tax write off. It’s designed to lose money, and it will do it spectacularly.
Eventually, in five years or so, it will become a Red Roof Inn, or Knights Inn, and it will lose more money for those companies, and eventually it will become an independent “American Owned” hotel that might turn a small profit, despite the 20 year old carpets and beds.
For what it’s worth, the Navajo Nation currently has 4 casinos. The motel location is well away from each of those. Perhaps they want to make it a mini-casino? E.g., slots and poker machines. Just testing the water???
Doesn’t seem the way to build up to a full casino.
I’m not disputing you, but is that mere cynicism or are you familiar with a standard “play” in the hotel biz?
In general, a planned tax writeoff is still a money loser. Lose $1M of real money, take a $1M deduction, save $300K on taxes, and be $700K poorer. Hard to get rich that way.
It’ll be a vacation spot for the younger folk, so they won’t feel inclined to go afar, to Las Vegas and such.
People passing through on the way to somewhere else will stop for the night, dining expansively on offerings from motel candy machines and goodies available at the local Marketplace a.k.a. convenience store.
IOW a jobs program for the local youth.
The situation with tribal youth is dire and was 35 years ago when I lived in the vicinity.
~2 hours from the Grand Canyon and ~1 hour from Monument Valley. For the right price I’d stay there, if those were my goal.
I’ve stayed in motels over an hour away from Banff, Jasper and the Everglades (when visiting those parks), so that doesn’t sound objectionable to me.
There are already plenty of accommodations in both Tuba City and Kayenta. That’s why it seemed so odd.
At an identical price point? I’m a price-sensitive shopper, personally. We visited the Grand Canyon a few years ago. We stayed in Tusayan and it was pretty expensive (and I don’t think we saw any hotels that were radically cheaper in Tuba City, et al).
If you are ever going through Kayenta at mealtime, I heartily recommend the Navajo burger at the Amigo cafe… phenomenal.
Back to your regularly scheduled thread.
Relatively speaking (and I know nothing of these towns/that area), the more rural location may have been a real estate bargain.
And if you look at industry standards, which – IIRC – say that break-even on a small hotel happens at something like 50-60% occupancy – it may not be all that enigmatic.
And that’s before anything else they do/sell (eg, gas, convenience store).
I’d also imagine they looked at demographics and – more particularly – traffic counts over time, and felt bullish about the traffic along that particular stretch of road in the future.
[I used to choose locations for a couple of different (non-hotel) retail chains. Probably very different variables, but comparable equations]
My area has multiple motels/hotels that always seem packed at night despite the fact I live 2 hours away from anything interesting (middle of nowhere Southern California) always wonder what exactly people are staying in there for.
Consider there may be more development initiated but yet to be revealed. A factory going in, a housing subdivision, a new plaza, it could be anything.
If any of those things are slotted, getting a hotel in first isn’t a bad idea. A place for folks to stay/eat as the site is rising may be what they’re aiming at.
Put some charging stations there too!
Most newer EVs have the range to comfortably get to there from Las Vegas but much farther would make one anxious.
If this wasn’t in the middle of one of the most economically disadvantaged areas of the country, that would make some sense.
Most hotel chains are franchised. So the franchise owner is the real loser.
Also I wouldn’t be surprised to learn that the local tourism board kicked in a few bucks to make this development happen.