Hotel design is often a process of addition, whether it’s that perfect throw pillow, location-specific coffee table books, or a splash of texture on an accent wall.

Not when you’re gutting a shabby 1930s motel. “Most of our design process was about subtraction,” said Liz Lambert, founder of the Austin-based Bunkhouse Group, which in March unveiled its overhaul of the aged Austin Motel. “[We had to] peel away layers of garden gnomes and tchotchkes that accumulated over time.” Now the derelict inn is a cool-kid magnet—just like its sister hotel, the celebrity-packed Saint Cecilia.

Around the U.S., hoteliers are turning down-at-the-heels motels—a national icon of sorts—into stylish, remarkably upscale hotels. The trend started a decade ago, according to Mike Cahill, founder and chief executive officer of hospitality real estate firm HREC Investment Advisors. But it has spread in the past couple of years, spurred by affordable property prices and a changing definition of luxury that puts more emphasis on character and experiences than thread counts and square footage.

That doesn’t make the business of motels a sudden no-brainer. Small properties like these often operate on tight margins. They don’t benefit from economies of scale in everything from marketing, to accounting, to linens, the way chains and large hotels do. (Marriott CEO Arne Sorenson has said these sorts of cost savings drove the Starwood merger last year.) In booming areas, it can be more cost effective to tear down motels and build something larger from scratch. 

Cheap real estate can also translate to costly, time-consuming, and controversial renovations—the buildings are often seen as part of a community’s local legacy. “[Renovating a motel] takes a lot of empathy. It is much easier to develop a hotel in Manhattan,” said Erik Warner, co-founder of Eagle Point Hotel Partners, which this year converted motels in Jackson Hole, Wyo., and Greenport, N.Y. Plus, explained Lambert, “you never know what you are going to find behind the walls. It’s easy to come in and decorate, but much harder when you discover the pipes are bad.”

So why bother? For Lambert and several others, the challenges are worth the reward of creating a noteworthy hotel, contributing to the rebirth of an area, and hopefully profiting as a result. “It’s like the ultimate in recycling,” Cahill said.

They’re a boon for travelers, too, at price points that often dwarf the branded big boxes nearby. Here are the standouts to book on your next great (road) trip.

Austin Motel, Austin

For years, hotelier Liz Lambert had a crush on the 30s-era Austin Motel, an icon of the city’s restaurant-packed South Congress Avenue—thanks in no small part to its phallic neon sign. Now, after her year-long makeover, the 41-room property marries minimalism with bursts of color and kitsch—lip-shaped telephones, colorful Voutsa wallpaper patterns, and synchronized swimming performances for poolside entertainment. “I think we preserved the spirit of the place,” Lambert said. “And of course, we kept the sign. I mean, that sign may be the No. 1 reason I wanted the hotel all these years.” From $125.

First « 1 2 » Next