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

By Alan Roberts Global Head, Embassy Suites by Hilton | 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, decor 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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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.