How to Successfully Renovate Hotel Properties: Tips for Controlling Costs and Maintaining Quality
By Fred B. Roedel, III, Partner & Managing Member, Roedel Companies, LLC
Keys to a successful renovation
Renovation projects are successful only when all involved parties are aware of and plan for the unique challenges they pose. Completing renovations in an operating hotel, making today's standards work in an older building, completing work within a short down period, and effectively dealing with existing and unknown conditions without negatively impacting the budget, the schedule or guests are just a few common challenges.
The keys to a successful renovation project involving one or more hotels are:
- Having a clear vision and objective for the project.
- Defining standards for the time, cost and quality of the project.
- Outlining scopes of work and linking them directly back to the objective and performance standards.
- Developing a well-conceived and reliable schedule that integrates operations and construction to ensure a smooth transition for transitioning guestrooms in and out of service during the renovation process.
- Involving qualified contractors who truly understand the work they are undertaking, have the resources necessary to meet the schedule and budget, and the experience to deal with unexpected challenges.
No matter how large or small they are, all renovation projects have a set amount of dollars assigned to them. One of the best ways hotel owners and investors can ensure that projects are completed within a defined budget is to pull together a team of professionals who have extensive hotel experience and will work together to oversee the entire renovation process. Core team members should include owners/investors, operators, designers and contractors. Not including construction expertise early on in the process typically lowers the reliability meeting time, cost and quality standards.
Objective / Vision & Performance Standards
A clear vision and objective are critical elements to keeping renovation projects on track. Standards must be defined regarding time, cost and quality prior to starting a project.
- Time standards include the time allotted for assessing a property, designing the renovation, bidding the work and completing the work.
- Time includes the actual hours that construction can occur, e.g. 9AM - 3PM.
Staying focused on time standards is critical to a renovation project since customers will be staying at the property and the operations staff must be able to do their jobs. Not accounting for guests and operations during a project is disastrous. Cost:
Clearly define the investment limits for the project and break it down into the most relevant factors, i.e. design costs, construction costs and operating costs.
Prior to defining investment limits, do the evaluation necessary to be confident that the market will provide an economic return on the invested capital. Quality:
Be clear and committed to what you see the product being. If working within a brand, this standard is most likely outlined. If the standard is not well defined, then it will be incumbent upon the owner and/or operator to establish this quality standard.
- Quality considerations include the level of construction drawings to be completed, the level of accountability, outlining current conditions; identifying the type of contractors needed and the methods of qualifying them prior to bidding; and detailing the condition and appearance of the property that must be maintained during construction.
Once the standards of the renovation project are established, the exact condition of the property must be determined. Have an accurate building engineering and status report completed, it serves two purposes. The first is to identify existing conditions, which enables the designers and constructor to address and mitigate their potential impact on the project. The second is to identify outstanding building code issues that may require action.
If a building engineering and status report is not prepared prior to starting the design phase, it is unlikely that the final design will work when unknown existing conditions arise, a very common occurrence during renovations.
The Project Team needs to be actively involved in the design process. Design consultants should present progress reports at regular intervals to its members so the project is evaluated on an ongoing basis against the time, cost and quality parameters.** **
Three of the most demanding elements of a renovation are bidding the job, scheduling and the actual work.
- Take the time to qualify all bidders. Renovating a hotel property requires people who are very good at their trade, can handle unexpected surprises efficiently and effectively, are able to work with people and maintain a clean organized process.
Never risk your property to an inexperienced contractor. Doing so will result in dissatisfied paying guests and a tainted reputation. Schedule:
A well thought out renovation timeline that accounts for the entire scope of a project is critical because it will minimize the impact on guests and operations. It is crucial to incorporate the operations tasks within it. Operations must remove operating elements from rooms before work begins and then re-organize all rooms before they are put back into inventory.
- Whenever possible, renovate one typical room before starting the entire renovation process. Doing this will answer 90% of potential questions and provide all contractors with a chance to fine-tune their processes. The Work:
Despite qualifying contractors and completing a one-room test, there will always be questions and issues to resolve, especially at the front-end of a project. Make sure you have a team of experienced professionals in place that can quickly answer and address issues during the initial days of a project. Doing so will help ensure that your project will not come to a screeching halt.
- Make sure the process for ordering and receiving materials is clear and that all necessary materials are readily available prior to starting work. Failure to do so will bring work to a stop and unfinished rooms will be unrentable while everyone waits for the materials to arrive.
- Finally, have a clear and agreed upon process for reviewing and accepting completed rooms. The more actively involved either the owner and/or manager are, the more efficiently issues can be resolved and rooms put back into service.
Avoid Unpleasant Surprises
In order to keep a renovation project on time and within budget, it is important to be cognizant and on top of the following areas:
- Work hard on communications: The property manager must have a reliable contact with the workforce that they can go to at anytime. The manager of the project must be prepared to address issues. Proactive communication between operations and construction will bring reliability to the time it takes to renovate and re-activate guestrooms. It is also important to communicate to guests all the positive aspects that a renovation will translate into for them through appropriate signage and by keeping operation's staff in the loop so they can inform curious guests of the wonderful changes.
- Adhere to the Schedule: Ensure that neither too few nor to many rooms are out of service at any one time. Work crews must be methodical and organized in their work. They cannot be going back to address issues, this will only hinder the entire process. Continually review the schedule, the required tasks and seek opportunities to bring reliability to the time, cost and/or quality of a project.
- Keep the work zone and guest areas separate and distinct: Design all work processes to avoid interaction between guests and operations. Never allow guests in a work zone or contractors in guest zones.
- Maintain clean work and staging areas: Work and staging areas, inside and outside, must be cleaned daily. If the potential exists for guests and/or operations to be around a work area, be certain to use that proper signage and barriers to protect everyone. At the same time, take advantage of the opportunity to market the improvements you are making to the property. All workers need to maintain a clean and orderly presence. They are a reflection on your property. While renovating a hotel can be challenging, proper planning and being prepared for the unexpected makes the process smoother and helps maintain positive guest relations.
Mr. Fred Roedel is a Manager of Roedel Companies, LLC along with his brother David. He shares the responsibility of developing and implementing the annual strategic plan of Roedel Companies. He also shares the responsibility of approving the final design, budget and timeline of any asset developed. Mr. Roedel is President of ROK Builders, LLC, the wholly-owned Construction Management subsidiary of Roedel Companies. In this capacity he is responsible for developing the strategic and annual plans of ROK Builders. Mr. Roedel, III can be contacted at 603-654-2040 ext. 105 or FredRoedel@roedelcompanies.com Extended Bio...
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