Mr. Hill

Architecture & Design

Renovate Now and Reap the Benefits Later

By Roger G. Hill , Chief Executive Officer & Chairman, The Gettys Group Inc.

We have all heard it, and quite frankly said it, 2009 was a challenging year. The good news is we have all made it to 2010, but what now? While there are many signs that the economy is beginning to stabilize and move forward, we still have not seen an influx of capital into the market. There are certainly no new build projects, and a select few renovation projects that are moving forward in the current economy. With everyone still waiting to renovate and the industry is off to a slow start to the next cycle in the process, we ask ourselves - why not renovate now?

There are so many advantages to getting a head start on a renovation of your property; whether it is from savings on renovation costs due to supply dominating over demand when it comes to labor and construction, reduced guest displacement within the hotel due to lower occupancy and extending hospitable actions to just beating your competition to the market by coming out with a refreshed property ready and poised for increased average daily rates (ADR) in twenty-ten.

Renovation costs continue to remain low but that will soon change as the number of new-build and renovation projects are on the rise. While labor in the construction trade industry remains available and in abundance and costs are more aggressive than they have been in years, the price of goods and materials will soon start to increase. Many manufacturing companies have shutdown production facilities and carry little or even no inventory. A small pick-up in the construction industry will make products and materials much more difficult to obtain and lead-times will grow quickly. The global demand will put pressure on availability, therefore leading to an increase in pricing.

Guest displacement is so often an overlooked byproduct of hotel property renovations. At the nucleus of what our industry is centered around; hospitality and graciousness, we should strongly consider the benefits to not only our project, but also your staff and hotel guests. By renovating during a lower occupancy period, you will not displace guests and, more importantly, you will not inconvenience the guests that are in-house. By all of these actions while going through a renovation, you as the owner or manager will have both direct and indirect results in repeat business and a successful property. Even in today’s economy, guests are still looking for an experience they do not have at home- a getaway from the everyday routine. Surprisingly they are willing to pay for such escapes, too.

Also, by having a larger area of the property available for renovation at one time allows the General Contractor to be more efficient, lowering your costs and property area downtimes. This works in your favor when it comes to two areas of benefit, as discussed above: renovation labor costs and guest displacement.

Many properties have had very little capital invested in them over the last few years due to the economic situation. By renovating now, you can beat your competition to market with a new and refreshed product. Typical design and renovation cycles can take anywhere from six to twelve months in time to complete depending on the scope of work and services. By starting a renovation project now, you and your property will be very well positioned to take advantage of the upturn in the tourism industry, which is upon us, and provide a superior product to your guest.

A positive byproduct of our recent recession has been the improved relationship of the Hotel Brand and the Owner. Many of the major hotel brands have become more flexible in their assessment of each property and have shown a willingness to find a cost effective solution to improve an existing property asset. As we continue to recover from the economic stress felt around the globe, many properties will be in need of a renovation and the brands have typically had to take a harder line on compliance with their standards. Now is a good time to leverage your relationship with the hotel brand and work together as a team to find common ground on a potential renovation scope of work. There will probably not be any better time than now to negotiate an appropriate solution to your property’s needs.

Yet another reason to renovation now- available resources that are able to accommodate accelerated renovation project timelines. It’s a great time to find the best possible consultants to work on you project. Interior Designers, Architects, Procurement Agents, Engineers and various other consultants have talented and available resources to attack you project and get started and finished quickly. Since the onset of each project begins with these professionals, they will be the first to receive an increased workload. Finding the right team of professionals is one of the most important aspects to a successful project and providing you with a high quality product that generates more revenue due to the renovation.

There are a few characteristics to look for in order to ensure the consultant team you hire will be the right fit for your project, its parameters and the overall goals of your project renovation. Finding a consultant or a group of consultants who understand and that can successfully work within program elements, communicates efficiently and transparently to the owners and understands your Hotel Brand requirements are the building blocks onto which a strong renovation is built.

In addition to a strong consultant team, there are three benchmarks to a successful renovation: quality product, fair price and the speed-to-market factor. There has never been a better time to capitalize on the current market conditions and be able to achieve great success in all of these areas. Current costs are low, but are soon to rise as the barometer changes on the state of the travel and leisure industry. Quality consultants and contractors are available, improving your speed-to-market factor and quality of property asset.

All is all, no times like the present to improve your property in preparation for the steadily improving economy. What are you waiting for?

Nearly 25 years ago, Roger Hill co-founded Gettys, a Top 10 hospitality interior design, procurement and development firm. Under his leadership, Gettys has grown to a global team of business-minded professionals who specialize in hotels, resorts, spas, casinos and mixed-used developments the world over. A respected industry veteran, he is frequently called upon by hospitality and business media outlets to provide insight into the redevelopment, renovation, and repositioning of hotels. A graduate of Cornell University, Roger has served as an appointed delegate for the White House Conference on Small Business, and is a member of ULI, YPO and ISHC. Mr. Hill can be contacted at 312-836-1111 or info@gettys.com Extended Bio...

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