The Bare Essentials Of Repositioning Your Hotel

By Steven Belmonte CEO, Vimana Franchise Systems LLC | June 10, 2012

There are several steps that can be taken to ensure smarter decisions when it comes to repositioning your hotel in the marketplace. Industry vet Steve Belmonte shares these steps that he believes will help your hotel to thrive in this economy whether you choose to renovate, reposition or reflag.

Intro Paragraph: When weighing the pros and cons of renovating a property and/or reflagging and repositioning it, few owners and operators think in terms of extra room nights that need to be sold. Hotel owners and operators need to start "doing their homework". Steve Belmonte has put together 8 steps to get you on the road to success. From "shelving your ego" to "getting the maximum bang for your buck," following these steps can help you to make smarter decisions when it comes to either renovating or repositioning your property in the marketplace.

So your current franchisor wants you to spend $500K on upgrades? How many extra room nights do you have to sell to make an additional $500K in profit?

No matter what size or type of hotel you own/operate or what market you compete in, your answer most likely is "a lot more than I might be able to in today's competitive climate."

Ironically, few hotel owners and operators think in terms of the extra room nights that are needed to be sold when weighing the pros and cons of renovating a property and/or reflagging and repositioning it. This is just one reason why some renovations and reflaggings fail to recoup an adequate return on investment and why capital markets for such projects today often are deemed too risky. These and dozens of other "cancers" are blackening what otherwise undoubtedly would be a much-brighter profitability picture for lodging.

Due diligence means 'do your homework,' which includes many steps along the road to success:

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.