How to Keep a Small Hotel Renovation Project Under Budget

By Jed Heller President, The Providence Group | January 05, 2010

Rejuvenation of your hotel, whether it be new carpets and drapes in guest rooms or an upgrade in the ambience and functionality of the common areas, goes a long way towards protecting your assets as well as maintaining superior guest services. However, to achieve or exceed your long term ROI goals, it is crucial that renovation costs stay in line with your budget. It is very easy for even the smallest project to get out of control and create a "money pit" of unexpected expenses, cost overruns, labor issues and inconvenient delays.

There are many twists and turns that can occur during a renovation that can strain your patience and assault your project budget. Fortunately, there are tried and true practices that will help you navigate the minefield and complete your project on time and on budget. The key factors to keep in mind when planning your renovation are:

  • Choose an experienced project manager
  • Create a detailed scope of work
  • Assess cost estimates and timelines
  • Document the budget
  • Hire the appropriate contractors
  • Manage the process If care is taken to properly address all of these areas, your renovation project should go off smoothly with minimal disruption to your operations and your guests.

Engage the Right Project Manager

The project manager is key to success and should possess a number of skills ― time management , attention to detail, ability to develop a work schedule, set goals, create/implement actions plans, monitor progress towards goals, and make clear, timely decisions. He or she is the project maestro, organizer and traffic cop and needs to fully understand every component of the project. If there are multiple contractors involved, the project manager is the one who will ensure that each contractor has fulfilled their part of the project as expected and be sure that the next contractor is ready to go. If your renovation project involves plumbers, drywallers, painters and carpet layers, for example, there is an orderly progression of work that needs to be completed before the next stage can begin. It only takes one contractor to muck up the works - perhaps they can't start when expected, they may be having labor issues, or encounter other unexpected problems. Any of these problems can contribute to project delays and cost overruns.

Who should manage the project? For larger projects involving multiple contractors, it often makes most sense to hire a construction firm and use their experienced supervisor to manage the project and oversee the various stages and subcontractors involved. They should have the expertise and understanding to keep the project on track, from both a timeline and cost perspective. For smaller projects, it might make sense for the hotel general manager to oversee the project, but only if they have had some experience dealing with contractors. And it is important to understand if your general manager truly has the time, skills and inclination to manage a project as well as perform their daily management tasks. If not, your project may be at great risk.

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Guest Service: Empowering People

Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.