Take advantage of renovation opportunities now

Smartly thought-out renovations create a sense of newness and cleanliness that leads to guests feeling comfortable in extremely uncomfortable times. Photo credit: skynesher / iStockPhoto (HKDecoman and MoneySQ have jointly launched a blockchain based home renovation project tracking platform (Image skynesher / iStockPhoto))

Everyone who is reading this knows how the hotel industry dynamics have been severely altered. This includes those related to hotel renovations, and the renovation rules that we have long thought to be unchangeable are no longer so.

This challenging period can afford lodging owners who have the appropriate resources and capital an opportunity to renovate at an accelerated rate and at more competitive costs. During these times we’ve seen major hotels plan to close temporarily or stay closed longer simply to get much needed renovations completed quicker. We are also witnessing a willingness of designers, contractors and furniture, fixtures and equipment providers to reduce cost of goods and services due to many projects put on hold. In addition, major brands have allowed owners to push back the timeline to complete the required refresh/property improvement plan obligations until the industry recovers.

For those who owners who have elected to halt major construction due to cash-flow concerns, smaller, smarter and less costly tweaks should be considered to help maintain the asset. These small improvements will help provide needed visual impact to guests and complete deferred repairs without the additional business interruption that typically occurs when rooms are out of service.

With the economy having come to a near standstill for a period this year, it’s been a major reset for many industries outside of hospitality, too. This has caused construction costs to plummet back to reasonable levels, making it more cost effective to get projects completed now. We have seen on few projects cost reductions of 15 to 20 percent. Also, with many of the major brands’ 2020 and 2021 required initiative deadlines pushed back, new PIPs are also being extended an additional 12 to 24 months for completion.

It is also important to keep in mind that construction projects may take longer to complete. This is due to the fact that there may be fewer people working on a project at a given time in order to reduce the number of individuals on a site because of COVID-19 requirements.  

The industry will eventually work its way out of this and return to a state of normalcy. But to better appeal to the traveling guest today, smartly thought-out renovations create a sense of newness and cleanliness that leads to guests feeling comfortable in extremely uncomfortable times.

Stephen Siegel is principal of H-CPM, a construction project manager and owner representation firm.