Test driving property plans
Renovating one typical room before embarking on the full renovation is another tactic owners and their teams can use to develop a more reliable plan and identify trouble spots in advance. When John Hardy Group (JHG) implemented a strategy to renovate 79 Candlewood Suites and Staybridge Suites properties owned by Hospitality Properties Trust and managed by Intercontinental Hotels Group (IHG), model rooms were a key milestone in the project, which kicked off in November 2011. JHG divided the $165 million renovation program into five phases, starting six properties each week. A team of vendors, general contractors, and warehouses completed each property in about eight weeks, and wrapped up the entire process by the end of 2012. The renovations involved 10,000 guestrooms, kitchens and baths, exterior painting, and other quality upgrades.
“Model rooms are a key component of ensuring the design everyone settles on and is happy with—and that you’re going to create 10,000 rooms of—is also in the budget,” says Nathan Hall, senior project manager for JHG. During the model room construction, the team discovered that the gypcrete subflooring was in poor condition. The design initially called for carpet tile, but that would require a level surface to avoid individual squares from popping up over time. “We were able to steer them away from carpet tiles and go with more of a broadloom, which is your standard commercial carpet,” Hall says. “That would have been a huge expenditure that required a lot of unnecessary subflooring repairs.”
Instead of removing the old kitchen cabinetry, the team refinished the existing boxes and only replaced the door fronts and hardware. In the end, the model room design demonstrated cost saving measures for the overall renovation project. “Any time you spent $100 on anything, you had to keep in mind you’re then doing that 10,000 times,” Hall says, “so you’re looking at a $1 million expenditure across the entire portfolio.”
But in some cases, owners prefer to skip the model rooms and get right down to business. When Roedel Companies recently started renovations on a couple of Hampton Inns for a client, things didn’t go exactly to plan. The wallpaper didn’t come off as cleanly as anticipated, and left a lot of glue residue behind. When the contractors put up the first room as per specs—remove wallpaper, give the drywall a light sanding, put up new wallpaper—the old glue showed right through the paper. Although it was a minor speed bump, Roedel had to revise the plans and come up with a new schedule that required an hour more of sanding per room.
“That costs money, but somebody has to do it,” Roedel says. “Versus knowing it up front, we had to find out during the plan. The only challenge is, if you work very hard with the client to get them to their monetary objective, this is something possibly above and beyond their objective.”
Other frequent problems discovered during renovations include mold and mildew, broken down drywall, and water leaks. “You really don’t know until you dig in there,” Roedel says. “It’s stuff we always have to be ready for. If you can do that exploratory work beforehand, that’s a perfect world.”
To maintain position and relevance it’s important for owners to invest in renovations, Roedel says, but they have to be smart about how much they can afford to spend. If you allow assets to deteriorate, they will go downhill fast. Guests notice when hotels aren’t up to par. And once you lose them, it’s hard to win them back.
Extensive preplanning, defining a reasonable budget, developing clear objectives, and establishing a reliable team will all help streamline renovations. “Regardless of the breadth of the renovation project,” Roedel says, “I think its success or failure is probably directly linked to how much effort you put into it beforehand.”