As a hotel owner/operator, your future success is going to depend a great deal on your ability to compete with other hotel owners/operators. That would be especially true if your property is located in an area where there is a lot of traveling traffic.
If you are going to compete successfully, your hotel has to look and feel like a place that people want to stay. If you intend to maintain the right look and feel over the years, there will come times when you need to do renovations. Travelers don't like paying "top dollar" for a subpar-looking hotel/motel.
Indeed, renovating your hotel property might be exactly what the doctor would order if you want to charge higher rates and draw more traffic. What you need to understand is renovating a hotel is complicated. Given the financial resources you will need to invest, you need for the renovation process to hit the mark as quickly and efficiently as possible at a price you can afford.
In the following sections, the information is going to focus on major renovation questions you need to address and five (5) must-know renovation tips that could help you get the end result you want.
Renovation Questions You Should Be Asking
Before you contract to have your hotel renovated, you need to establish a clear set of renovation goals. That is going to require you to answer some very important questions. As a point of reference, here are a few of the most important questions upon which you need to come up with answers:
- Are you going to renovate with partial occupancy?
- To whom are you going to market your newly renovated hotel?
- What is your budget for the renovation?
- Do you anticipate your renovations allowing you to increase your rates?
- Will you be financing the renovations or going out of pocket?
Once you have adequately answered these questions and have a clear direction for your renovation, you can move forward.
5 Must-Know Hotel Renovation Tips
If you want to save yourself time, money, effort, and potential frustration, you can learn from others who have recently been through the hotel renovation process. In other words, you might be able to save by learning from the mistakes of others.
To help you avoid mistakes and perhaps save time and money, here are five (5) must-know tips for hotel renovating.
1. Get Input From Your Guests
In the weeks and months leading up to your renovation, you should have ample opportunity to find out what your customers would like to see in terms of renovations. You don't have to address all of their suggestions, but they can certainly help point you in the right direction in terms of you renovating and marketing your renovated hotel.
In particular, listen carefully to what your best customers have to say. Your best customers are your frequent customers and the kind of customers who tend to rent rooms at higher prices. As part of the renovation process, you need to maintain these kinds of relationships. After all, these are the relationships that probably made it possible for you to do your renovations in the first place.
2. Hire a General Contractor With Hotel Renovation Experience
If you don't have a strong background in property development, you won't have enough expertise to effectively and efficiently manage a hotel renovation. That's why your best option is to hire a general contractor with plenty of experience in large renovation projects.
It's important to note that a renovation is very different than a new build from the ground up. There are different considerations that need to be taken into account, especially as it relates to the coordinating of construction activities when occupants are still on the premises. That's why a general contractor with hotel renovation experience would be the optimum option.
As for the benefits you would derive from hiring a general contractor, there are two worth mentioning. First, it would give you a focal point for communication as opposed to having to communicate with multiple tradespeople. Second, general contractors can save you money as they rely on tradespeople with whom they have long-standing relationships to provide fair and competitive quotes.
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3. Build Contingencies into Your Budget
When laying out your budget, you should do so by defining all the major construction categories such as plumbing, fixture, flooring, drywall, etc. You also want to include a category called "contingencies."
The contingency category is a catch-all for cost overruns that might occur in any of the other categories. The one thing you can be sure of is things will go wrong and some cost categories will go bust. By putting a budget amount in the contingency category, a line item might go bust while the project stays within budget. This matters a lot to lenders if you are financing the renovation.
As a "rule of thumb," your contingency budget should be 20% above and beyond the rest of your budget. It's all the better if you don't have to use it.
4. Keep Existing Guests Happy During the Renovation Process
If you make the choice to renovate with occupants on the property, you must protect the interests of the occupants. You have to do whatever is necessary to ensure renovation activities don't interfere with the quality of their stay.
The list of precautions you can take include:
- Setting reasonable hours for renovation activities
- Make sure prospective customers know renovations are taking place during the reservation and check-in processes
- Provide extra comps whenever possible to address any inconveniences
- Offer a free night's stay to be used when the renovations are complete
- Listen to complaints and resolve them as fast as possible, whenever possible
5. Communication With Your Contractor is Essential
As the hotel owner/operator, you are ultimately responsible for the failure or success of a renovation. While it's highly preferable to put the building responsibilities in the hands of a reliable general contactor, you still have an obligation to know exactly how the project is progressing.
At the absolute least, you should schedule a conversation with your general contractor at least once a day, preferably at the same time each day. Also, you should do a walk-through of the renovations every two or three days so you have a visual point of reference when your general contractor offers updates or describe issues. Remember, it's your money the general contractor is spending. You have every right to know exactly how the renovation project is progressing.
If you were to follow these five tips, it would improve the chances of you getting the results you want at the end of the day. The results you want should include a beautifully renovated hotel that came in at or under budget.
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