PLAINFIELD, IL, JUNE 11, 2019 — Renovating an existing hotel is all about time and money. That’s why it is essential to plan ahead for the challenges—and costs—a renovation can pose.
If you are a hotel owner or operator, balancing the need for cash with your renovation objectives is one of those challenges, bringing to the forefront the most crucial decision made during renovation planning: “Should we keep the hotel open or should we close?” The answer lies in the scope of the project plus any role seasonality plays in the business.
On one side of the ledger, closing a hotel makes good sense. It allows for a far broader scope so that more can be done in less time. A major build out of a new restaurant or ballroom, for example, can be completed on a fast track schedule without concern for guests being subjected to noise or other distractions. Another plus is that time sequencing is more flexible for trade people to schedule work. Finally, if the hotel sees key occupancies during the winter months such as a ski resort, closing down over the summer for a renovation will not greatly impact revenues. Or vice versa for a hotel that counts on summer visitors for the bulk of its business.
The key negative of closing up a hotel is that cash flow comes to a screeching halt. Hotel owners often need to maintain a certain level of revenue for loan payments or to cover payroll, so this may not be a realistic option. Also, a hotel that is closed for an extended period can be forgotten by guests. Occupancy seasonality for most hotels doesn’t fluctuate greatly over the course of a year so the example of a ski or summer resort likely won’t apply.
Experience has shown that keeping a hotel open during renovations is the smart move for most hotel owners. However, it takes a special breed of renovation contractor to pull this off. The contractor must be highly skilled in the time sequencing of demolitions, deliverables and sub-contractor schedules. They need to show a unique sensitivity to guest needs. The fact is, all of us expect a certain degree of comfort and relaxation when we stay at a hotel. Noise, dust and busy contractors roaming the hallways can be a perfect recipe for guest dissatisfaction.
Skilled project managers will know to avoid disturbing guests by using floor-by-floor renovation scheduling to buffer noise, and to ensure guests do not see construction debris or contractors coming and going. In higher-end properties, the hotel operator may need to put an additional floor between guests and construction.
However skilled the project manager, a stealth renovation is rarely possible. Open communication with guests is the best way to avoid complaints and bad online reviews. It is important to let guests know as much as possible to avoid unpleasant surprises before they check-in. Once a construction schedule has been established, use social media to keep guests aware of progress. Post what the hotel will look like once it is completed. Also, provide conversation tips to employees to share with guests.
For more information visit www.cicerosdev.com.
