Three Rules of Renovation

Lodging’s current robust performance is creating a competitive environment when it comes to product freshness. The industry fundamentals have never been better, and these conditions are driving a flurry of construction projects, rebranding and conversion activity, and renovations of every scope throughout the United States.

In the last three years, an estimated 1.2 million hotel rooms have been renovated, representing more than 20 percent of the existing supply, Lodging Econometrics (LE) data reveals. According to Bruce Ford, LE’s senior vice president and director of global business development, the number of renovations will likely trend downward as strong hotel operating profitability discourages owners from making rooms unavailable while being renovated. However, for those hoteliers willing to take the plunge and make some upgrades, here are some key takeaways for making the best renovation decisions for your bottom line.

Rule No. 1: Property Improvement Plans Are Never Cost Neutral
When Cicero’s Development Corp. gets involved in a hotel renovation project, it typically starts with a call from an owner who needs to conduct a property improvement plan (PIP). During the conversation, they discuss the budget and scope of the project and how they can align with the owner’s business plan. “In all cases, we say, ‘Give a range of prices you want us to fall in between,’” says founder Sam Cicero. “It has to be a conscious business decision.”


An effective PIP should help a property gain market share, increase guest satisfaction, drive revenue performance, and enhance profitability, according to HVS. When determining where to direct capital investments, owners focus on areas that will drive a considerable return, and whether that means tackling a guestroom refresh, an FF&E renovation, or a complete revamp of the public spaces depends on a variety of factors, including a property’s performance in the market, where it is in the life cycle, and whether it is in the process of repositioning or rebranding.

PIP projects should always start with design professionals, Cicero stresses. “That’s the part owners skip over—just go to the flag and get whatever they recommend. But, if they go this route, by the time they get to the end, they’re usually over budget. You want to take what the flag wants them to do and make it fit the budget.”

The best way for owners to prevent spending excesses is to get a good general contractor involved in the project early, Cicero explains. “Contractors will watch the purse strings and timeline and get whatever professionals involved that they need. You want to maintain the design, watch the budget, and do whatever you can to increase the property’s sustainability.”

Last year, Cicero’s completed a multimillion-dollar renovation of more than 25,000 square feet of meeting space in the DoubleTree by Hilton Hotel Chicago–Oak Brook. The refresh included a new look for the grand ballroom, in which the team changed out 469 incandescent downlights with 407 energy efficient LED fixtures and installed a dimming system. They also removed more than 100 fluorescent ceiling fixtures and replaced them with 15 larger hybrid LED chandeliers. “They got savings, and it was better for the environment,” Cicero says. Since the hotel is located near many corporate offices, Cicero’s also made changes that would better accommodate business travelers. These included converting the hotel’s Wine Den bar and restaurant into a meeting facility for hosting intimate to midsize events. The gut-job involved installing new ceilings, energy-saving lighting, wall finishes, and trim. They also mounted glass doors to provide easy access to the 1,500-square-foot outdoor deck.

To accomplish the owner’s end goal, renovation experts must consider a variety of factors, such as how the project will save owners money or how to meet brand standards without going astray. It’s also smart to leverage the existing asset to emphasize the hotel’s strengths. Owners with one or two hotels can sometimes lose track of the big picture, Cicero says, which is why it’s important to get the right parties involved to steer the project in the right direction. “If you are making decisions solely on your budget, you may be making cuts on quality that will inhibit your ability to sell the property down the road,” he says. “If it costs more than you have right now, phase the project so you can do what you want in the confines of your budget.”


  1. As Principal Architect of one of America’s most practised hotel renovation architectural firms (AXIS Architecture + Design), I agree almost entirely with your list with one exception to your first point. Getting experts involved as early as possible is wise advice, but for the types of renovations you’ve described, a General Contractor might not be the best first choice. When it comes to significant renovations, an architectural firm can bring the complete toolkit to the job, including contracting and design. Food for thought.

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