Mr. Cerrone

Development & Construction

Distribution Partners are Critical to a Successful Renovation

By Bob Cerrone, Director of National Accounts - Hospitality, Ferguson

According to the U.S. Travel Association, spending by U.S. residents on domestic travel has rebounded to around $928 billion from a recession-low of $700 billion in 2009. Furthermore, hotel occupancy rates have steadily trended up since the recession, going from 54.6 percent in 2009 to 64.4 percent in 2014. Price Waterhouse Coopers projects hotel occupancy rates to be 65.8 percent by 2016 as consumer confidence continues to grow.

The resurgence of the economy has prompted hotel groups to move forward with planned renovations that were previously stalled. Some of these renovations are necessary to comply with brand property improvement plans (PIPs), and some are to keep up with the demands of savvy travelers looking for clean, updated accommodations.

There's a reason hotels delay hard renovations to just every 10 or more years; rooms under construction are rooms that are unavailable. Every day a room is unavailable is a chance that a potential guest will choose to stay at a competing property. When the time comes to update plumbing, fixtures, lighting and HVAC units, hotel owners turn to their designers, procurement firms and contractors to make renovations seamless and within budget.

Hard renovations can take anywhere from 12 to 18 months to complete. Within this timeframe, several crucial steps involving many different players must take place: purchasing, demolition, delivery, installation and clean-up. Any missteps or hang-ups during the process can cost the hotel time and money - both of which are required to come within budget or else the property begins to experience unplanned revenue loss.

While some complications are unforeseeable and unpreventable, there are steps hotel owners and procurement firms can take to greatly reduce costly errors. Those steps involve an important partner in the renovation process: the distributor. Take advantage of the distributor's knowledge and capabilities to avoid some common, yet avoidable, costly complications:

Complication #1: The Products Specified in the Design Plans are Impractical.

Designers are tasked with planning a functional renovation within a specified budget. Once a design has been approved, the procurement firm or project manager will move forward with purchasing the products specified for the job. What happens when the product arrives - or even worse, has begun to be installed - only for a contractor to find the items purchased aren't practical for the application? The process of returning a truck load of bath tubs or vanities is both costly and a huge waste of valuable time and resources.

Case Study: Years ago there was an upscale property in the middle of bathroom renovations. When it was time to install the new faucets that had already been delivered, the contractors discovered the arc and height of the planned faucets would create significant splashing. The faucets were delivered, unloaded and prepared for installation before the error was discovered. The crew had to work many extra hours to gather the wrong product to return to the distributor and the procurement firm had to scramble to secure hundreds of new faucets from multiple distributors that were better suited for the application.

Solution: Share design plans with your distributor early on. A distributor with significant product knowledge and manufacturer relationships knows if the specified products are going to fit the needs of the renovation. If the designer specified a product that won't work, a distributor with strong industry knowledge can make a recommendation on another brand that works better for the application within the set budget. Sharing design plans before purchases are made will eliminate the chances of the wrong product being installed.

Complication #2: There Isn't Enough Inventory to Fulfill the Order

Room renovations require purchasing hundreds of the same product all at once. What happens when the order is placed with a set delivery date, only for the hotel owner or procurement firm to learn that the order cannot be fulfilled as-is? Whether the lack of inventory is due to the distributor or the manufacturer, not having enough product to fully supply the renovation will stall the project.

Case Study: A major property put out a bid request on a large-scale renovation. They chose a distributor mainly based on price with little regard to the distributor's full capabilities. When it was time to install the plumbing fixtures they had ordered, they found out their distributor couldn't deliver the entire order on time. At the last minute, the procurement firm had to scramble to find another distributor that could complete the order at once.

Solution: Choose a distributor with vast inventory availability and give them a heads-up on the order. Set your distributor up for success by giving them a heads-up on a big order that's about to come down the pipe. This allows them the time to check their own inventory and to possibly even contact the manufacturer to ensure the order can be completely filled by the time the product is needed. Or better yet, choose a distributor with vast inventory and national distribution. You're far less likely to run into an inventory issue when your distributor has a strong logistics network with the ability to quickly deliver product.

alt text

Complication #3: Too Many Cooks

Renovation projects require managing many different key players. Procurement firms and contractors often are required to work with multiple suppliers out of necessity. This means multiple company contacts, multiple purchase orders and multiple service and delivery terms, which can quickly get out of hand.

Case Study: A hard renovation included replacing several major items on the property. From the lighting to the plumbing fixtures and HVAC units, the renovation was going to require several key players to complete. The project manager had chosen other suppliers for the many other elements that were affected. While the renovation as a whole went smoothly, they later shared that managing the project from start to finish - including working with several companies with several different sets of business practices and several purchase orders - was a nightmare. They hadn't considered how time and cost effective it would have been to consolidate many of these purchases through one distributor.

alt text

Solution: Choose a single-source supplier with knowledgeable associates. Look for distributors with highly-trained associates that can spot your needs across multiple product categories. Distributors with knowledgeable associates who understand the products and process of a hotel renovation will know how they can add value, especially when they carry a wide breadth of product. Take advantage of suppliers who will allow you to consolidate your purchases into one single point of contact, one single order and one set of business policies.

In today's world where social media gives guests a public forum to share their experience, hotels can't afford to give anything other than first-class service and accommodations. The consequences for not completing a renovation on-time means more than the immediate loss of heads in beds and subsequent revenue. It also means risking one-star reviews due to noise, construction debris, or broken promises in regards to room availability and guest experience. Those reviews don't go away when the project is finally complete; they live on and have an effect on consumer perception and choices long after.

Not every renovation hiccup can be avoided and some projects will go past deadline despite perfect planning, but choosing the right distributor that can act as a trusted partner is one crucial step in the hotel renovation process that could prevent unnecessary loss in valuable time and money. Look far beyond price to determine which distributor is right for the job.

Some important questions to ask when choosing a distributor:

  • Does the distributor carry multiple product categories involved in the renovation that can be consolidated into a single order?

  • Are their branches or warehouses close enough to ensure quick delivery?

  • Can the distributor guarantee 100% fulfillment by the designated delivery date?

  • Do they have the financial strength to handle the job from start to finish?

  • Does the sales associate have the industry knowledge needed to make sure the supplied product matches specifications or

  • Does the distributor have strong manufacturer relationships?

Completing a hotel renovation on time doesn't have to be due to luck. Get to know your distributors, make them a part of the renovation process early on and utilize their capabilities to the maximum. We guarantee an improved renovation experience that will result in a strong, long-lasting business relationship.

Bob Cerrone, Ferguson’s Director of National Accounts – Hospitality, is responsible for leading Ferguson’s Hospitality strategy and discovering and implementing new opportunities within the segment. Mr. Cerrone, a nearly 40-year veteran of the plumbing industry, launched Ferguson’s Hospitality division in 2006. Under his leadership, Ferguson Hospitality has grown into a talented group of more than 100 associates comprised of national account managers and the Hospitality Renovations Team. Mr. Cerrone can be contacted at 954-520-5965 or bob.cerrone@ferguson.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
General Search:

OCTOBER: Revenue Management: Technology and Big Data

Gary Isenberg

Hotel room night inventory is the hotel industry’s most precious commodity. Hotel revenue management has evolved into a complex and fragmented process. Today’s onsite revenue manager is influenced greatly by four competing forces, each armed with their own set of revenue goals and objectives -- as if there are virtually four individual revenue managers, each with its own distinct interests. So many divergent purposes oftentimes leading to conflicts that, if left unchecked, can significantly damper hotel revenues and profits. READ MORE

Jon Higbie

For years, hotels have housed their Revenue Management systems on their premises. This was possible because data sets were huge but manageable, and required large but not overwhelming amounts of computing power. However, these on-premise systems are a thing of the past. In the era of Big Data, the cost of building and maintaining an extensive computing infrastructure is incredibly expensive. The solution – cloud computing. The cloud allows hotels to create innovative Revenue Management applications that deliver revenue uplift and customized guest experiences. Without the cloud, hotels risk remaining handcuffed to their current Revenue Management solutions – and falling behind competitors. READ MORE

Jenna Smith

You do not have to be a hospitality professional to recognize the influx and impact of new technologies in the hotel industry. Guests are becoming familiar with using virtual room keys on their smartphones to check in, and online resources like review sites and online travel agencies (OTAs) continue to shape the way consumers make decisions and book rooms. Behind the scenes, sales and marketing professionals are using new tools to communicate with guests, enhance operational efficiencies, and improve service by addressing guests’ needs and solving problems quickly and with a minimum of disruption. READ MORE

Yatish Nathraj

Technology is becoming an ever more growing part of the hospitality industry and it has helped us increase efficiency for guest check-inn, simplified the night audit process and now has the opportunity to increase our revenue production. These systems need hands on calibration to ensure they are optimized for your operations. As a manager you need to understand how these systems work and what kind of return on investment your business is getting. Although some of these systems maybe mistaken as a “set it and forget it” product, these highly sophisticated tools need local expert like you and your team to analysis the data it gives you and input new data requirements. READ MORE

Coming Up In The November Online Hotel Business Review

Feature Focus
Architecture & Design: Authentic, Interactive and Immersive
If there is one dominant trend in the field of hotel architecture and design, it’s that travelers are demanding authentic, immersive and interactive experiences. This is especially true for Millennials but Baby Boomers are seeking out meaningful experiences as well. As a result, the development of immersive travel experiences - winery resorts, culinary resorts, resorts geared toward specific sports enthusiasts - will continue to expand. Another kind of immersive experience is an urban resort – one that provides all the elements you'd expect in a luxury resort, but urbanized. The urban resort hotel is designed as a staging area where the city itself provides all the amenities, and the hotel functions as a kind of sophisticated concierge service. Another trend is a re-thinking of the hotel lobby, which has evolved into an active social hub with flexible spaces for work and play, featuring cafe?s, bars, libraries, computer stations, game rooms, and more. The goal is to make this area as interactive as possible and to bring people together, making the space less of a traditional hotel lobby and more of a contemporary gathering place. This emphasis on the lobby has also had an associated effect on the size of hotel rooms – they are getting smaller. Since most activities are designed to take place in the lobby, there is less time spent in rooms which justifies their smaller design. Finally, the wellness and ecology movements are also having a major impact on design. The industry is actively adopting standards so that new structures are not only environmentally sustainable, but also promote optimum health and well- being for the travelers who will inhabit them. These are a few of the current trends in the fields of hotel architecture and design that will be examined in the November issue of the Hotel Business Review.