Budget Host Liberty Inn

In the early 90s while driving on I80 in eastern Iowa I spent a night in a motel near an exit. These days when driving long distances (which I do a fair amount of because I am afraid of flying) I generally make reservations for intermediate stops over the internet before starting out. However at that time I would just drive until I was ready to stop and then start looking for a place to spend the night. This usually worked out okay. In this case as I recall the motel had a sign near the exit offering some sort of cross promotion (something like 10% off your room rate if you bought a tank of gas, that sort of thing) with a nearby gas station and/or restaurant.

In later years I drove on that section of I80 a number of times and with nothing better to do started trying to pick out the location where I had once spent the night. But although I knew the approximate location (a couple of hours east of Des Moines) I was never able to confidently identify the exit. Eventually this annoyed me enough that when I got home I found the old motel receipt (I am a packrat type with a house full of useless stuff like that). This told me that the motel was the "Budget Host Liberty Inn" and that the exit was number 259. Armed with this information the next time I drove by on I80 I was of course able to locate the exit. I saw there was an Econo Lodge motel nearby but it and the site in general still didn't seem familiar. Of course driving by at 70 mph an hour doesn't give much time for a close inspection. And then I moved from Ossining to Princeton and stopped driving on that section of interstate highway. Recently while on Covid lockdown I looked on the internet for more information about the place and was able to find some.

The 35 room motel was built in 1966. At some point it became part of the Econo Lodge chain (motels move from one chain to another a fair amount). It operated as an Econo Lodge until about 2015 and then as an independent motel (named "Elegant Inn") until about 2018. It appears the building may now be in use as a warehouse for a company that sells vintage motorcycle parts. In 2015 somebody (perhaps on behalf of the owner in preparation for a sale) took some fancy 360 degree pictures of the Econo Lodge entry, front desk, breakfast area and two rooms which can be found on google maps. It all looks pretty nice but the extant reviews (from 2010-2015) are a mix of "okay for a cheap motel" and "not okay even for a cheap motel". I only found bad reviews for the "Elegant Inn".

There is an adjacent gas station/truck stop and convenience store that dates to 1964 with some alterations in the early 90s. There is also a restaurant building (built in the early 90s) on this property (which is currently distinct from the motel property). It appears the restaurant building has not been in use for at least 10 years. The changes on this property were made soon after I stayed in the motel and may partially explain why I was unable to recognize the exit. Also available pictures of the Econo Lodge incantation of the motel show some superficial alterations were made to the facade at some point (perhaps when it joined the Econo Lodge chain). Together with a garish paint job this would be enough to significantly change the motel's appearance again making it harder to recogize. And of course memory is unreliable, I have stayed in many cheap motels over the years and may over time start conflating details.

If you drive a lot you see a fair number of abandoned businesses like gas stations, motels and restaurants along interstate highways. This always seems a little sad to me. In this case the motel property (which includes 4 acres of land) sold for $695,000 in 1996 which indicates (unless the buyer grossly overpaid) that it was doing well at that time although the building was already 30 years old. At a cap rate of 10% this implies operating income of $69,500 a year or a bit over $5 per room per night (or perhaps $10 per occupied room per night). This seems pretty good but apparently it didn't last. Perhaps the building started showing its age. And the failure of the restaurant wouldn't have helped. In any case the motel sold in 2007 for $388,000 and again in 2018 for $170,000 and now is not worth operating as a motel. As noted the restaurant failed some time ago. The gas station/truck stop is still operating (albeit currently for sale) but you have to wonder about its future long term.

So what went wrong here? My guess is that for whatever reason this exit failed to amass the critical mass of businesses needed to make a location sufficiently attractive to passing drivers to survive long term. Perhaps somewhat counter-intuitively businesses along an interstate are better off clumping together (at least up to a point) than spreading themselves out evenly. This is easier to see in cases of complementary businesses like gas stations, restaurants and motels as each will draw business to the others. It is clearly better to have a gas station, restaurant and motel all at one exit than spread out one each at three adjacent exits. But even competitive businesses like gas stations are better off clumping together. This is because an exit with two or more gas stations is a more attractive place to buy gas than an exit with a single station as travelers will expect a better price. And two gas stations may draw enough traffic to support a restaurant (where a single station would not) which in turn will draw more business to the gas stations. As this process continues some exits will lose out unable to compete with nearby exits with more businesses bringing in a greater volume of traffic.

Of course this process has limits. If you get too big a gap between gas stations, restaurants or motels it becomes attractive to open a new location near the midpoint. But you don't really need gas stations (or restaurants or motels) every 5 miles along a rural interstate.