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The success of low-priced lodging in part reflects effective marketing. Red Roof Inns advertises with signboards that say SLEEP CHEAP. Says President Trueman: "It may be grammatically incorrect, but it sure pulls travelers off the highway." His occupancy rate of 84% is the highest in the economy-lodging industry.
Still, experts wonder how long no-frills operators can enjoy such a smooth journey. As new companies enter the market and established chains expand, there is the growing risk of a glut. "Profit potential now is high, but success breeds excess," says Daniel Daniele, an analyst at Laventhol & Horwath, an accounting firm specializing in the lodging industry. Daniele predicts an industry shake-out in the next two to five years, but that is a distant prospect. This summer travelers tooling down interstate highways are sure to find plenty of bargain motels.