Survey: More U.S. hotels planning major renovations

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Cicero’s Development Corp., a property renovation contractor specializing in the hotel industry, has just been selected by Apple Hospitality REIT to renovate its Hilton Garden Inn located in Schaumburg, Ill., and if conditions in the hospitality industry remain steady, it will be just one of many hotels to get a refit this winter, according to GlobeSt.com. A survey of about 3,000 hotel owners and operators in the US and Canada recently conducted by Cicero found that more than 40 percent were planning a major property renovation requiring a general contractor over the next year, with 28 percent planning a renovation in the coming six months.

During the recession, many operators put off the usual touch-ups and renovations that they typically implement every few years. But with the hotel industry currently enjoying occupancy rates hovering at fifteen-year highs of 65 percent, the operators have begun to dust off those old plans and call in general contractors like Cicero to help them catch up.

“In general, the hospitality industry is at an all-time high in terms of room occupancy and rental rates,” Sam Cicero Sr., founder of Cicero’s, tells GlobeSt.com, “and the renovation work has really started to pick up.” In fact, “our survey showed the highest levels of planned short-term hotel renovations we’ve seen since the mid-2000’s and demonstrates that the hotel industry continues to improve at a steady pace from recession lows.”

“Everyone that is traveling nowadays wants the newest and the latest,” he adds. “And the most important thing is connectivity; once they get to their room they want to be able to plug in and charge everything up.” In the past, only high-end hotels provided WiFi for free, but it has become standard and operators have responded to this demand. In addition, both upscale and mid-range hotels have begun asking Cicero to build-out common areas where people can hold small meetings, congregate for breakfast, or just do some work on their computers.

For the Schaumburg hotel, which, as reported in GlobeSt.com, Apple acquired in 2010, Cicero will revamp the entire property, including the 166 guest rooms, corridors and meeting rooms and provide sleek, contemporary furnishings, as well as modern interior design from floor to ceiling. New carpeting, fresh paint and vinyl wallcoverings, window treatments and FF&E will complement the hotel’s existing amenities. The company will complete the renovation by mid-January 2016.

Other findings from this year’s survey include:

  • 50 percent of respondents prefer to contact a GC by sending both a request for quote and a request for qualifications.
  • Once they have narrowed down the group of potential GCs, 37 percent of hotel owners want to interview the project team face-to-face. Twenty-one percent ask to interview former clients.
  • When it comes to final criteria in selecting a GC, nearly all respondents put “ability to deliver within budget and schedule” as their number one concern, followed by project experience and price proposal.
  • Eighty-seven percent said “no” to the question as to whether a higher priced GC would be disqualified if they successfully met all other criteria.

Cicero expects the demand to remain fairly intense for about a year, and then level off at the end of 2016 or near the beginning of 2017. “We are almost at the peak of the cycle.”

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