In the Heart of It

When Memphis Businessman Luther F. Matthews, 53, put up a glossy, 60-room motel in the heart of town seven years ago, the smart hostelry money had long since been out in the suburbs. Figuring that Matthews, whose business was parking lots, just did not know any better, some of the local hotelmen charitably warned him that he was bound to flop. Some flop! By its second day, Matthews' Downtowner Motor Inn was filled to capacity, and this week in Muskegon, Mich., Matthews opens his 66th motor inn. Plans are for a new one about every nine days for the rest of the year.

Texas-born Luther Matthews has prospered on the simple notion that people went to motels outside of town because city hotels were "obsolete and rundown." While other motel chains bent over backwards to be everything from convention halls to resorts, Downtowner Corp. zeroed in on the all-but-forgotten traveling salesman for its bread-and-butter trade. The motel mix Matthews offers is free and easy parking, a swimming pool and a good room within walking distance of the town's No. 1 retail center. Obviously the formula works. With a healthy 75% occupancy rate last year (v. 64% for hotels) Downtowner Corp. rang up sales of $15,300,000, or 37% over 1964.

In his Memphis office, Matthews keeps detailed files on property in every sizable U.S. city, looks with an especially sharp eye for anything "adjacent to the largest hotel in town." With few public rooms, small staff and relatively low capital investment, Downtowners can substantially undercut hotel room prices, thus siphon off an instant clientele. So far, the Downtowners have been keeping things hot for hotels mainly in smaller cities. As Vice President Ronald Kirkpatrick, 33, sees it, that is only the beginning. "We have been in training," he says. "Now we're big enough to take on New York and Chicago."

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