Insightful article from Hotel News Now managing the rising costs and guest disruption of hotel renovations:
Published by: Laura Koss-Feder/Hotel News Now
Published date: April 2019
There is no escaping renovations in the hospitality industry.
They will refresh properties and ultimately bring in more business. However, hoteliers need careful planning to take into account upward-creeping labor and material costs, and must have a strategy in place for ensuring guests aren’t interrupted by the project.
Vikram Sood, SVP of operations at RAR Hospitality, said he’s seen costs increase between 8% and 15% over the past two years.
“To justify this, you have to know what the renovations will result in, in terms of (return on investment),” he said.
To get a better price on materials and products during renovation projects, RAR hired a procurement company that it trusts to help bid on vendors, he said.
Pre-construction planning with all parties is key to an effective renovation strategy, said Kevin Filer, SVP, design & construction, at Davidson Hotels & Resorts.
“Define the scope in detail with all stakeholders; missed scope items cause cost overruns and delays,” he said.
This includes ensuring that the development team completes all research of existing space to uncover and/or confirm locations of plumbing, structural columns and other issues that might cause the proposed design to be altered during construction, which could result in delays or lower-quality product, Filer said.
The furniture, fixtures and equipment procurement process is also key to an effective renovation strategy. Getting all stakeholders to sign off on all FF&E items early enough in the preconstruction process will ensure the right timing for deliveries, sources said.
To help reduce costs when The Adolphus hotel in Dallas underwent a two-year, $100-million renovation, it locked in purchases of materials in advance, said Brett Orlando, GM of the 407-room property.
The Adolphus’ renovation, completed in April 2018, included a transformed lobby, refurbished public spaces, new restaurant and bar concepts, the addition of a spa and pool deck and new stores.
Alexandra Zullo, director of sales and marketing at the 199-room Equinox Golf & Spa Resort in Manchester, Vermont, said the property chose to purchase some items such as carpeting in bulk to help reduce material costs. The hotel completed its $8-million renovation in July 2018.
The renovation of the Equinox Golf & Spa Resort included redesigned and refreshed guestrooms, restaurants and public spaces, as well as a soft renovation to the resort’s 18,500 square feet of indoor and outdoor venue space. The resort sits on 1,300 acres, which meant there was plenty of room on property to store excess items.
Hotel owners rely on the management company and on-property team to develop an effective plan to mitigate the loss of business during a renovation, said Kathy Hood, SVP of sales and revenue management, at Davidson.
To read the entire article at Hotel News Now, click here.