pip
You Received a Hotel Property Improvement Plan. Now What?
Cicero Construction Group | September 6, 2024
In order to keep a hotel aligned with current brand standards, hotel franchisors will periodically issue hotel owners a Property Improvement Plan outlining required renovations and upgrades. PIPs are mandatory. If the hotel owner does not complete the PIP, the franchisor has the right to remove them from the brand entirely. PIPs differ for every brand and hotel. Newer hotels might simply require small cosmetic adjustments, but older ones may need complete overhauls to their mechanical and electrical systems. However, hoteliers should generally anticipate a PIP every seven to twelve years. Design components that are fundame...
Hotel Renovations: When to Go Big
Jon Peck | September 6, 2024
Most owners and prospective buyers try to reduce their hotel’s Capex spend associated with PIP or Renovation work and with good reason- to keep their investment basis as low as possible. When and How to “Go Big” on your Hotel Renovation However, there are scenarios below where owners may want to go bigger. The hotel is in a strong demand environment and underperforming the competitive set, especially if the hotel has “good bones” and most of the work would be interior. Owner has broader economic interests. For example, the hotel is or could be part of a mixed-use project and the hotel upgrade would improve the positionin...
Should I Stay or Should I Go?: Keeping Hotels Open During Renovation
Cicero Construction | April 29, 2024
While renovations ensure a hotel continues to be a popular destination, it's no secret that renovations can be disruptive for guests. Confronted with this dilemma, a hotel owner is left with the question: “Should we stay open during the renovation or should we close?” The correct answer depends on several factors. Pro: Closing Your Hotel On one side of the ledger, closing the hotel makes good sense. It allows for a far broader scope with work done in less time. Total re-branding of the hotel, a large-scale PIP, or a major build out can be completed on a fast track schedule without concern for subjecting guests to noise or other dis...
What to Expect in the Hospitality Industry in 2024
Mark D. Podgainy | March 4, 2024
By Mark D. Podgainy The hospitality industry experienced a modest increase in RevPAR in 2023, and the industry seems to be optimistic about the future. What’s ahead for 2024? Uncertainty is the major theme. What’s Ahead • Interest rates will be higher for longer. Expectations of a number of rapid cuts to the Federal Funds rate early this year have been dashed with the latest inflation data. Most economists still expect reductions in the Federal Funds rate but have pushed back the time frame for the first reduction to late spring and have reduced their forecasts for the number of reductions. If inflation remains stubbornly high,...
Ashford Hospitality Trust Converting Crowne Plaza La Concha Hotel to Marriott’s Autograph Collection
August 22, 2023
DALLAS, Aug. 22, 2023 -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the "Company") today announced that its Crowne Plaza La Concha Hotel in Key West, Florida (the "Hotel") is on track to convert to a Marriott Autograph Collection® property in 2024 at which time it will be rebranded to Autograph La Concha. Marriott's Autograph Collection Hotels feature a diverse portfolio of approximately 200 independent hotels around the world that reflect a unique vision, design, and environment. The conversion of this iconic Key West hotel to an Autograph Collection property will occur upon the completion of a $35 million r...
Understanding PIP Requirements Can Make or Break a Hotel Investment
Lauren Cicero | December 10, 2021
By Lauren Cicero NORTHBROOK, IL - December 10, 2021 - Stay-in-place orders, travel restrictions, and cancellations intended to control the spread of COVID-19 caused a severe drop in hotel occupancy and revenue. Even the best marketing has not prevented the most enticing hotels from becoming victims of the pandemic. Famed names like the Renaissance Grand & Suites Hotel in St. Louis, the iconic Fairmont Hotel in San Jose, Washington, D.C.’s century-old Marriott Wardman Park, and The Blakely New York have all fallen into bankruptcy. More hotel bankruptcies may be on the horizon as lenders lose patience with defaulting property...
Six Warning Signs Your Hotel Is Overdue for a Renovation
Cicero's Development Corporation | December 2, 2019
PLAINFIELD, IL, DECEMBER 2, 2019 -- Perhaps you've been there before: After checking into a hotel, you head to your room and open the door only to find yourself in a decor best described as Early American Garage Sale. Carpets are dirty and frayed. Wallpaper looks dingy. The bathroom has mold. You vow never to return. It can happen to the best hotel. Hotels that enjoy higher occupancy experience greater use of their guestrooms, translating into more wear and tear. The environment also plays a role. For instance, resorts near the beach will be adversely impacted by sand, saltwater, and the sea air that can destroy carpeting, rust metal fu...
The Current Impact of Brand PIP Requirements on Hotel Sales
Eric Guerrero | November 22, 2019
By Eric Guerrero The most consistent issue HVS Brokerage & Advisory has encountered during transactions is whether a group is budgeting sufficient capital for prospective asset acquisitions that require PIP renovations. An incorrect estimate means buyer groups must increase their capitalizations or request a price reduction on a dollar-for-dollar basis relative to their cost increases. This ultimately changes many metrics late in acquisition processes and lowers IRRs because any extra capital is drawn entirely from equity and not a blend of equity and debt. Recent observations are detailed below. The lesson is that accurate PIP estimat...
