Executive vice president of hospitality, Randy Shelly, contributed his insights to Hotel Business Review on how hotels can undergo a renovation while remaining fully operational, continuing to generate revenue while also maintaining a high level of customer service. Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.
The pandemic has turned the hospitality industry on its head, forcing hoteliers and property owners to reassess their strategy and plans for the foreseeable future. And while the initial reaction may be to hold on to assets and capital, investing in upgrades and modifications now will prove effective and lucrative in the long run.
Some properties may call for full overhauls that require them to close, but the hotels that are able to remain operational while undergoing a renovation—taking advantage of current lower level occupancies—can continue generating revenue while enhancing their value.
The U.S. opened more hotels and rooms than any other country between the beginning of March and end of September of 2020, according to data from STR. So, while there have been permanent and temporary hotel closures, new rooms are continuing to come online, spurring increased competition. Hotel renovations had previously focused on maintenance and staying up to date with the latest standards and design trends to stay competitive in the market; now, hotels are in a competition for cleanliness to stay ahead of the curve and provide customers with the comfort and confidence of staying in a clean, safe environment.
Before the pandemic, a hotel room lifecycle was 10 years on average (and even less in high-end hotels). This lifecycle will shorten, with staying power beyond the pandemic as hotels compete to stay relevant from both a safety and cleanliness perspective, in addition to an amenity and design standpoint. And with this shortened lifecycle leading to more frequent renovations, staying operational and maintaining a high-quality guest experience while under construction will be more important than ever.
The main goal of any renovation is enhancing the guest experience, therefore increasing value. When a hotel remains operational during construction, the guest experience is still paramount, along with a focus on continuing to drive revenue. There are several ways to ensure the best possible guest experience is maintained during a renovation, with health and safety top of mind and as few operational disturbances as possible.
Pre-Planning for Success
Renovating a fully-functioning hotel will inevitably have impacts on day-to-day operations, but pre-planning ensures that disturbances are minimal. Upfront collaboration among the owner, architect, and construction manager ensures that the best processes and mitigation strategies are put in place before work even begins, with potential challenges identified and addressed ahead of time. A customized approach is key, with different strategies considered and vetted to fully understand the implications of each part of the renovation on the overall property.
Logistics and details need to be considered and planned for floor by floor, and room by room. Having a thorough understanding of a hotel's strongest revenue-generators will also provide the team with the direction needed to strategically prioritize operations and create swing space or alternate service stations if needed.
With all key stakeholders involved from the outset, the team can effectively communicate and provide real-time design, constructability, and feasibility reviews, along with budget exercises. This accomplishes three key things: 1) it shortens the overall duration of the project, eliminating time lost—and the cost—from a redesign; 2) minimizes the impact of the ongoing work on hotel guests by identifying disturbances ahead of time and establishing solutions that address or eliminate them; 3) allows for input into certain means, methods, and materials, maximizing cost savings, durability, and longevity. This upfront collaboration ultimately reduces cost and drives revenue, providing the best value.
Mitigating Potential Disturbances
The planning and implementation of mitigation techniques and procedures is essential to a successful renovation in an operational hotel. Indoor air quality management, noise mitigation, and barricades are some of the most crucial elements. Even the most minute logistics, such as where workers park and enter the building to where deliveries are dropped and picked up, make a difference in providing guests the ultimate experience. Adjusted, limited, and shifted work hours should be considered to reduce guest disruption while also providing the hours needed to complete the project on schedule.
Communication is key—frequency and format should be established at the beginning of the project to ensure information is consistently being shared and cascaded to the appropriate teams. Regularly-scheduled meetings between the project team and both the property owner and building management teams allow for a feedback loop that drives real-time solution-finding and action plans, which can rectify or prevent any guest disturbance.
Keeping Amenities Active
To keep as many revenue streams open as possible during a hotel renovation, the construction approach should focus on maximizing the number of amenities online at a time. For example, working sequentially through each space not only allows a construction team to focus on each unique project and deliver the highest level of quality, but also only takes one area offline at a time. This approach also allows for the creation of swing space so hotel guests can continue to enjoy the amenity in some capacity throughout the renovation.
Another key consideration is keeping the back of house operations as highly-functioning as possible to service the amenity spaces, creating temporary space or service areas if needed. For example, keeping the kitchen operational to service not only restaurants but room service should be discussed and accounted for in the initial planning.
To accommodate guests' needs, public space areas can be renovated in multiple phases. A thorough understanding of the flow of guests, luggage, valet, security and operations staff is critical in the pre-construction phase. By taking different areas offline at different times-rather than all at once-these workstreams and pathways can be re-routed and recreated so guests' level of service expectations are still achieved.
Making Rooms Key
A phased, focused approach on amenity and common space work allows for hotels to sell all the available rooms for as long as possible. Once work progresses to the rooms, the construction team should work from the top floor down. Finishing floors two at a time expedites the process, allowing room reservations to be made immediately after completion, while also allotting a buffer floor to ensure there's no noise or disturbance to guests. While two floors are taken offline just to renovate one, this ensures the guests that are booked in the rooms beneath aren't affected by construction noise, and have the best experience possible.
With hotels currently experiencing low occupancy rates, rooms on multiple floors could be renovated at the same time while still allowing for the one-floor buffer, reducing build time and, ultimately, cost. So, while it may seem counterintuitive, now is the most economical time to renovate, taking advantage of lower levels of foot traffic to undergo construction with minimal revenue impact, creating a high value for investment.
To increase efficiency and reduce unforeseen conditions, project teams should implement as many technology programs and techniques as possible. For fast-paced schedules, fully integrating projects with construction management software allows teams to track the progress of each individual room, ultimately cutting the turnover time on each floor.
Leveraging technology during pre-construction is especially important, giving project teams a clear line of sight into certain building challenges. For example, radar and X-ray technologies allows teams to check structures for embedded obstacles, allowing them to plan ahead and factor these conditions into the building plan and schedule. Without this pre-planning, teams are confronted with problems during construction, and are forced to devise solutions reactively mid-project, which pushes out the timeline and increases the probability of disturbances to guests.
The safety of everyone at the hotel—guests, hotel staff, and project team—should remain top priority. There are safety platforms and programs that allow for real-time data sharing, which helps onsite project teams correct any hazards immediately, reducing risk and helping keep the renovation on schedule and everyone safe.
Creating a Safe Space
There is now an immense focus on safety and well-being, so property owners and their project teams need to carefully, thoughtfully map out how to renovate safely. This includes mitigation strategies to prevent the spread of infectious disease. Safely renovating a hotel is just as important as the resulting enhancements and updates that will make it safer and cleaner for guests and hotel staff.
For example, Shawmut Design and Construction has deployed enhanced safety protocols across its jobsites, rolling out new procedures, jobsite innovation, and an exhaustive Covid-19 risk assessment and response plan nationwide. Included is Shawmut Vitals, a custom technology platform which aids in contact tracing and allows team members to self-certify daily health screenings by scanning a job-specific QR code and completing a health survey. Additionally, workers are issued personal protective equipment, including facemasks, while adhering to social distancing requirements.
Providing an enjoyable guest experience is at the core of the hotel industry, and this level of customer service does not need to end or change during a renovation. Through thorough pre-planning, effective mitigation strategies, and strategic construction approaches, hotel owners can continue to generate revenue while undergoing changes that will drive even more value for both guests and the property.