The Value of Preservation Consultants to Historic Hotel Developers

By John Tess President & CEO, Heritage Consulting | August 25, 2010

This affinity for "character" has led to the rise of boutique hotels, defined not only by size, but by design - typically historic in nature. One of the pioneers was Bill Kimpton, whose foresight created the Kimpton Group. Others leaders in the field include Ian Shrager and Andre Balazs. This affinity for character has also prompted larger projects, such as Sage Development's proposed Marriott Renaissance in a redeveloped Portland, Oregon department store which will have 330 rooms.

As a result of the success of these and other pioneers, hotel developers are often on the prowl of unique opportunities, thinking about the hotel potential of transforming warehouses, office buildings, Masonic temples, train stations and more.

In one very large way, government policy supports this practice. Tax laws allow 20% of the costs of a "certified" rehabilitation of a "certified" historic structure to be used in the form of a tax credit. Under the right circumstances, that credit can also be transferred and sold, thereby bringing money into the rehabilitation project itself. Complementing this federal program often are state and local incentives that use many of the same rules, guidelines and even reviews. All are designed to make the re-use of old buildings financially viable.

Before running out and buying the closest white elephant, however, developers need to temper their temptation to use these incentives. The rules and reviews governing the tax credit process are intricate and in some cases run contrary to what may seem like common sense. The key to success lies with due diligence and in hiring the right preservation professional.

Before we can understand the challenges, it is important to understand a bit more of the tax credit program. As I mentioned, the program requires a "certified rehabilitation" of a "certified structure". In general terms, a "certified structure" means the building is either listed on the National Register of Historic Places or listing as a contributing structure in a National Register historic district.

While there are some exceptions, the baseline for whether a building might be listed on the Register is that it must be at least 50 years old. The individual building itself does not need to be nationally important or even architecturally distinguished. It may be locally significant, and maybe significant for its association with an important person. It may even be important as an example of how a design has responded to development in the community - say a 1954 motor court reflecting the changing nature of hotel design in response to the automobile.

Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.