5 Must-Know Hotel Renovation Tips

With the hotel industry in record breaking territory for several years, it's emboldening developers to build new hotels and franchise companies, which are becoming increasingly stringent on PIP requirements. Add in rising construction costs – material costs alone have risen 2.1 percent during the previous 12 months – and any renovation project costs more than a year ago. So, saving money on a hotel renovation is more critical than ever.

Many hoteliers aren’t construction experts, so we’ve assembled a list of tips that’ll help you budget through your next property renovation, including Hampton’s Forever Young Initiative and Holiday Inn Express’ Formula Blue, two of the most popular brand design changes driving PIPs today. Here’s what you need to know to be successful.


Set the Stage


Engaging your general contractor or project manager to be an advocate for your project is essential. If you don’t have a strong relationship with these very influential folks, start one today, especially if you don’t have a project on the immediate horizon.

Your general contractor or project manager are the ones who have the widest sway over the success or failure of your project. If they feel invested in the project, it’ll help to streamline the project and better set you up for success, all while minimizing some of the inevitable headaches. So be sure they have a lot of hotel specific project experience, such as a company like Hotel Rehabs, which understands the brand and design standards you are tasked with bringing to life. A strong general contractor, or third party project management firm, who advocates for you also helps find ways to value engineer the project too, stripping away unnecessary costs.

Also, be sure to budget in ‘surprises’ and follow the rule to always expect the unexpected. Contingency budgets typically include an additional 5-20% for unforeseen issues, such as mechanical, electrical, or plumbing issues that can’t be evaluated during visual inspection. These vary by project scope, age of property, location, and project complexity. 


Understand the Brand

Brands and standards are in flux. Repositioning and morphing customer behavior are prompting hotel franchise company executives to continually evolve brands. A cost-per-key for a renovation can be drastically different than the last time you renovated the property. Plus, because of the strong hotel economy, brand representatives are less likely to issue waivers or exceptions.

Both Holiday Inn Express and Hampton have reinvented their design standards in recent years. The Formula Blue protocols were finalized in 2015 and cost between $20 - $40,000* per-key to meet the standards, because it is a major reimagining of the brand.

Hampton Inn’s Forever Young Initiative was announced in conjunction with the brand's 30th anniversary, with the most recent iteration making its debut this past July. A relatively capital intensive program, the renovation can cost between $20-$40* per key depending on numerous factors, such as a major exterior component that can range between $600,000 to $1.2 million*.

A general contractor, such as Hotel Rehabs, can act as an experienced consultant to assess and help set your specific project budget. 

*costs can vary depending on property, as the area, property, and PIP can increase these numbers.

Communicate and Communicate Again and Again

You must have constant contact with the project team to keep work-flow moving forward while minimizing surprises. This includes all job stakeholders such as General Contractors, Designers, Architects, Owner’s Reps, Third Party Project Managers, Purchasing Agents, Brand Teams, Ownership, Management Companies, and others. A decision by one group can affect all others' timelines and project budgets. Keeping people continually in sync will minimize those costs.


Plan Very Early to Keep Schedule Moving

Seemingly every aspect of the project can take longer than we all like to think it will. For example, designers, architects, and consultants are, in many cases, busier than ever. This means they may take longer to complete their part of the project in a time frame longer than expected. Don’t get stuck with tight deadlines that could have a seriously adverse effect on project costs. 

The hotel brand’s representatives will need time to submit their input. It’s not unusual for a simple prototype review to take 45-60 days, depending on the brand.  If you’re trying to negotiate a custom design, or specific waivers or deferments, the process can take much longer. 

Even FF&E orders can take longer than expected, as factories are working overtime to meet current demands. The last thing you want is a delayed renovation because materials aren't arriving on your installation timeline.


Manage Expectations

This one is all up to you. To be successful, every project participant must know exactly what is expected from them and by when. This is the glue that holds the process together, and failing to manage your expectations of the involved team can lead to unforeseen delays and financial overruns. Understanding not only what success looks like for the project, but understanding how to effectively manage expectations of all parties is key. 

A failed project many times comes down to the person who put it together, don’t be that person. Many issues and disputes can be avoided by simply understanding and communicating what success looks like. A hotel renovation is like a team sport, everyone must be held accountable. To ensure success assign clear cut, reasonable responsibilities to team members. Building the perfect team takes patience, but it’s worth the effort and time invested.

Even if you think you are in control of everything, be sure to have a contingency plan in place for when things go wrong. Because something always does.