Acquired a Hotel? Balance Renovation With Guest Satisfaction for Higher ROI
By Tom Baker, Managing Principal
Hotel acquisition and renovation often come hand-in-hand. The obvious reasons for this are many, but the top ones are 1) the best deals to be had are often on properties in need of a fresh start and 2) new hotel owners often want to mould their hotel into a representation of their design ideals. Both are excellent reasons to move forward. Each undertaking is an exciting project with tremendous potential for considerable return on investment. After decades in this industry, I’ve learned nothing can take away from the upsides like beginning the adventure into hotel ownership battling the aftereffects of unhappy guests inconvenienced by a hotel renovation. Avoid this with my guide to post-purchase hotel renovation.
The top 3 situations to avoid during a hotel renovation:
1. Don’t move ahead before engaging a trusted guide who undertakes all necessary research.
Before you begin the renovation, have someone at your side who can uncover the important details necessary to move forward with full confidence. Choose someone versed in all aspects of renovation research, both physical and digital. I have a few tales to tell of those who found out the difficult way that a particular website domain was under copyright restrictions despite open availability and that their vision of a stunning ultra-mod hotel interior design was not remotely possible given the building’s historic importance to the city. Better yet, have someone chosen before you purchase the hotel who can advise you well in advance of acquisition decisions that will have an impact on your planned renovation. This way, unpleasant surprises will be avoided and pleasant ones uncovered. You may even be able to bring what you learn to the negotiation table for extra leverage.
2. If you decide to open the doors during the renovation, don’t try to hide it. Make it known with enthusiasm!
Many hotel owners, new or tenured, opt to keep the doors open during an overhaul for good reason. Cashflow is important and can mean the difference between moving the project forward or not – this won’t happen without guests or carefully managed funds from investors, loans or a personal account. For those who opt into this plan, it’s quite tempting to hope no one will notice that you’re renovating, but they definitely will. Even if you take the precautions mentioned in this article, secrets don’t exist in a fast-moving, digital world where leisure and business stays are thoroughly researched while TripAdvisor is scoured for mentions of possible inconveniences.
What many don’t realize is that most guests are open to the idea of minor construction and major interior renovation if they know about it in advance and if there is a deal associated with it. By taking ownership of a renovation announcement on your website, booking engine and third-party platforms, you control the tone and message. It can absolutely be a positive one such as, “Work is underway to make our hotel better than ever! Stay during the transformation to take full advantage of our renovation special, plus be among the first guests to see the progress.” Take this tip and watch the cash continue to flow.
3. Don’t wrap it up without a grand re-opening. Celebrate!
The completion of a hotel renovation is the ultimate reason to get the word out in a big way. While new ownership of a hotel is newsworthy, the combination of a new owner and a renovation sets the stage for a series of great events. From a branding perspective, announcements such as these get noticed and it’s easy to create a buzz to spur bookings. Guests want to get in on something that they hear about from multiple sources and understand great demand boosts rates. This is an ideal time to hire a PR firm for a few months to invite writers. Every link from a well-trusted website to yours increases website score resulting in your hotel appearing higher in search results. Encourage reviews during this exciting time by training your front desk staff to hand a card to guests when they check in (this is preferable to when they check out). You may even want to throw a party for the press coverage and the fun.
The AHA Takeaway
When you undertake a hotel renovation, whether or not it follows a hotel acquisition, do it the right way to take advantage of the unique upsides inherent in the project if you know where to look. Full transparency, taking control of the message, completing the research and announcing the project’s completion are key to an excellent return on your important investment.
Let’s talk. Use the quick form below and I’ll personally reach out.
– Tom Baker, Managing Principal