Meeting brand standards
Every few years, hotel franchisees are faced with new design concepts and other brand standards they need to address in order to stay competitive and maintain their flag. The challenge is coming up with a plan that fulfills the brand’s vision and also makes sense for the owner’s budget. As the partner and managing member of Roedel Companies and president of ROK Builders, Fred Roedel III has been involved in his fair share of renovation projects. In addition to providing development, construction, management, and design services to third-party owners and investors, Roedel Companies owns and operates its own portfolio of hotels. When implementing new brand standards, ROI is always top of mind. “We really want to keep our overall investment in line with what we think the improvement will be in our revenue and ultimately our cash flow,” Roedel says.
He thinks back to when Marriott debuted its new Courtyard lobby design in 2008, and his colleague spent approximately $1.5 million in renovations as the first adopter. “Every owner in the world said, ‘Woah, back up. We’re not touching that with a 10-foot pole,’” he recalls. Marriott looked at alternative designs and materials to reduce the cost burden for owners while still achieving its objective, Roedel says. When the price eventually came down, the investment made more sense for owners. Roedel Companies has renovated a number of Courtyard lobbies that have cost between $500,000 and $700,000, depending on size. The entire Courtyard system should be updated with the new concept by mid-2013.
As lobbies continue to evolve into 24/7 social hubs, there are more opportunities for ROI. “It’s an important point to the hotel,” Roedel says. “For that level of hotel that has food and beverage, you have to do certain things that cost money, but you can get revenue out of it.”
Brand standards are typically good for about six to eight years before they are updated. “Brands are cognizant that there’s only so much money in the world and they’ll hit a brick wall at some point,” Roedel says. “But certainly they want to make sure they’re changing, modifying, and keeping their respective brands fresh, exciting, and relevant to the public.”
Fairfield Inn & Suites by Marriott recently introduced a fourth generation prototype to better meet the needs of its consumer base while helping owners boost performance. To achieve brand-wide consistency, hundreds of existing hotels will need to implement a new renovation package with core components of the Gen 4 design.
This includes flexible workspaces with mobile desks, purposeful storage solutions like peek-a-boo drawers and luggage counters, and an elevated bath experience with glass showers in king guestrooms and suites. New seating components in the public spaces are intended to inspire meetings and foster socialization.
Shruti Buckley, vice president and global brand manager for Fairfield, says franchisors are expected to upgrade to the new look when their properties are due for cyclical renovations, but some owners have chosen to implement the package sooner than required. “Hotels that have already gone through the renovation have been able to increase their rate and their RevPAR performance, as well as their guest satisfaction,” Buckley says.
In 2013, the brand expects about 80 renovation projects to begin, with that pace continuing each year until the rollout is complete. Among the early adopters of the Gen 4 renovation is the Savannah Airport location. The owners shared their feedback to help Marriott’s design team identify value-engineering opportunities, which will be passed along to all future projects.
For example, one of the décor elements—a large Plexiglas panel with embedded images that sits behind the front desk—had a high price tag. “Now we’re working with our vendors to not only decrease the size,” Buckley says, “but to also look at different materials that provide the same effect but cut the cost by more than 50 percent.”