By Luz Candelas
Not all resort facilities warrant the same level of investment during a capital expenditure program. The guest impact of any single resort space can often be over or underestimated and the ramifications on future margins can be dire.
When traveling to Mexico or the Caribbean, guests expect their chosen resort will have all the attributes of a tropical paradise.
Ensuring the design program is in line with these expectations also guarantees some measure of profitability while protecting the capital expenditure investment from the pitfalls of further redesign.
In fact, taking guests’ preferences into account at the onset of a renovation program can serve as a long-term conduit to the resort’s reputation management.
Guest commentary, in terms of direct feedback to the property as well as online user generated reviews and social media, is also a barometer of the property’s future revenue prospects.
Consistently positive guest comments and social media posts are a complimentary marketing vehicle with profit potential. To achieve that, the majority of any CapEx budget should be apportioned to improvements that will be most impactful on guests and will thus, maximize ROI.
ROI from the Spa
The spa is among the venues that generate the most ancillary revenue for a resort. Together with your spa director, you should work with owners to ensure that new spas are properly fitted in order to generate ROI in their first year.
It is known that guests who make use of the spa will have certain expectations based on their experience at other spas. So, it’s key to design a space that’s proportional to the resort’s room count and offers appropriate features, including:
- Hydrotherapy pool
- Sauna
- Jacuzzi
- Steam room
- Fully equipped locker rooms
“The spa costs for a 450-room resort range between US$1.5 million and $2 million.” – Luz Candelas
Much of the costs are due to the various water features and the specialized equipment that they require. Guests also expect quality finishes like:
- Precious woods
- High-end marble
- Granite
That also makes for a significant investment, but a necessary spend if guests are to leave feeling satisfied with their experience.
The Power of a Well-Designed Lobby
The lobby is another resort space that merits considerable investment during a CapEx program. Although this area of the resort does not generate revenue in the same context as the spa, it serves as a distribution hub to commercial operations that drive dollars to the resort’s bottom line.
Guests cross the lobby to get to the sundry shop, several restaurants and bars where up-sell opportunities await them:
- The concierge
- Outside vendors, such as a photographer
- Desk providing ground transportation and tours to local attractions
The lobby should feel inviting. Moreover, if the resort is targeting a AAA Five Diamond rating, the lobby should also be outfitted with appropriate furnishings and lighting design.
It is also guests’ first impression of the resort when they arrive. I can’t say enough about the power of first impressions.
When guests enter a lobby for the first time, the sea view should be so inspiring that they can’t help but to take out their phone for a few photos.
The “Wow Factor” can have a ripple effect. You want guests to share these views with friends and family. Those shares and comments are the equivalent of marketing currency.
Investing in Safety
Security should be another major investment consideration during a renovation or a conversion. Clearly, there is no direct revenue generated by resort security, but excluding it from the investment plan can lead to an accident that may ultimately translate to a loss for the property. Therefore, take great care in advising your owners on suitable security assets.
A lawsuit can be costly and negatively affect the bottom line. Mishaps can also take a toll on the resort’s reputation. So, keeping both, guests and resort staff, safe is another aspect of investment that you should consider essential to a successful resort.
