Renovate, Refresh and Generate ROI: Effective Strategies for Revitalizing Properties

By Alan Roberts Global Head of Embassy Suites by Hilton, Hilton Worldwide | November 20, 2016

Renovations at hotel properties promise significant rewards. From higher guest loyalty scores to additional revenue streams and new business from trusted partners, revitalizing a property constitutes a win for both brands and owners – but only when done right.

As the Global Head of Embassy Suites by Hilton, I’ve witnessed many major renovation projects firsthand. The successful ones have three important factors in common: owners who think bigger than just their financials; careful planning with guests’ needs kept top-of-mind; and a strong collaboration between the brand and ownership to prioritize renovation areas and create cost-effective strategies that align with individual budgets.

The Bottom Line Matters, But Value Engineering Isn’t the Only Way

For most hotel owners, the primary factors when planning a property renovation are the price tag and the return for themselves and their investment partners. Hotel owners approach the property renovation process from one of two vantages. Either the owner acquires a property and thus knows from the start what renovations are required, and can have the necessary budget to begin the process immediately, or the owner already has the property in his/her portfolio. For the latter category, a different approach is needed.

First, owners need to understand the future of the brand and use the renovation as an opportunity to align to ensure they are reaping the full benefits of brand affiliation. Next, they should assess how the hotel measures in the brand’s key performance indicators. A major renovation is the single best time to address high guest impact areas that may have been falling short and plaguing the property. Missing this opportunity could mean years before these issues can be properly solved. Finally, it’s important to understand the position of the hotel in the economic cycle and effectively budget the project to take advantage of the desired timeline.

To ensure owners are capitalizing on the full power of our brand, we created the Embassy Suites Atrium Refresh, a renovation initiative that transforms the original hotel atriums from traditionally large, open-air spaces filled with live plants, large scale water features and multiple elevation changes, into scalable social lobbies that invite guests to work, dine and socialize in comfortable spaces. Our new atriums, a signature gathering place and feature of our brand, include a soothing color palette, comfortable and stylish furniture, décor reflective of the hotel’s location, work-friendly features like easy access to power and Wi-Fi, and a vibrant dedicated bar area for the brand’s complimentary Evening Reception.

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Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.