Reinvent your hotel façade for higher profits
by Chris Winterhalter
Changing consumer tastes and increased competition from new-build hotels across more brands is convincing established hoteliers to rethink their existing hotels from the outside in – literally.
Hotel exteriors built 10 or more years ago simply don’t reflect current design trends, and in many cases, properties such as Gen 1 and Gen 2 Courtyard by Marriott require a complete façade redesign to maintain that flag. Plus, as real estate becomes increasingly scarce in overdeveloped regions, land prices continue to escalate. Combine that with construction and material costs continuing to rise and, many times, it’s a better option to upgrade the exterior rather than scrap the site and build a new hotel from the ground up.
As older hotels in good sites come to market, an exterior update also is a smart solution for hoteliers buying hotels they’re looking to reposition upward.
All these factors have hoteliers investing in reinventing building façades nearly as frequently as their lobbies and guestrooms. A refreshed exterior creates stronger curb appeal, as well as the perceived appearance of a newer, more upscale product that helps keep a property desirable for another 15 to 20 years.
Be warned, however, that renovating a façade requires a wholly different construction skill set than what’s required for inside the building. Just because your contractor may do a great job on the interiors doesn’t mean they are properly suited to revamp the exterior.
First, alert the brand of your intention to reinvent the hotel’s façade. Though there are times when owners feel as if this will pit them against brand stewards, the opposite is typically true. More than ever, major hotel franchising companies understand the expensive nature of façade redesigns. They will work with you to achieve the brand design intent, while partnering to achieve value-engineered savings. They’ll also assist through unexpected issues, changes, and delays if included in communication from the beginning.
From an ownership perspective, we’ve seen some owners fail to do exterior work properly because they have hired a contractor who simply didn’t understand this highly specific design process. Talk to a general contractor, project management firm, or architect that’s done this work before, so they’re not learning on your dime. This is essential for creating a realistic budget. Next, put a different contingency in place than you’d do for the interior, which we recommend at 10-15 percent. It’s always smarter to have a better buffer than a lower contingency.
Also, the project architect should have previously worked on hotel façades. Architects tend to design to whatever they think is right, which may not always be the most cost-efficient solution. Firms inexperienced with this kind of work don’t have a complete understanding of achievable savings during the construction process and are more likely to design in a way they think is wanted by the brand but not actually required. I see this happen regularly; owners get wildly varied prices during the bid process, which can strain construction funds and FF&E/capex reserve. Plus, additional expenses to value-engineer the project after it’s already over budget are often incurred.
- Work out the contract to limit risk on the ownership side, and work in tandem with the brand on specifics required for their approval before work begins. A design build approach with an experienced design build firm is a great solution, especially if you can minimize the budget and the risk.
- Don’t just stick to the brand essentials. Get the property inspected to determine if there are problems with the façade or structure, such as moisture issues, the need for a new roof, or site work that may be needed. If rebuilding the porte cochère, consider a pre-fabricated unit. This saves significant installation time while minimizing guest interruption. While it may not always save money, there’s better consistency and pricing if you have multiple properties in a portfolio and are looking to refresh several at a time.
- Understand the existing condition of the structure to consider the cost of both cosmetic and architectural upgrades. Exterior upgrades require a much closer look at the overall structure, which can lead to cost overruns if not prepared during the budgeting and bidding process.
- Engage a contractor experienced in working on occupied buildings, for both guest safety and comfort. This means a clear understanding of work hours and a realistic plan.
- Give guests a little extra love such as extra food or complimentary cocktails.
- Ensure constant communication throughout the process with the construction team, so any potential delay doesn’t come to light on day 89 of a proposed 90-day project.
The issue is not if your hotel will need to refresh its façade, it’s a matter of when. Keep these concepts in mind, and you’ll save time, money, and hassle during the process while simultaneously pushing profits.
Chris Winterhalter is the CEO and co-founder of Hotel Rehabs, a nationwide hotel renovation contractor specializing in major branded hotel renovations in the Upper Mid-Scale to Luxury spaces. For more information, visit www.hotelrehabs.com, or find them on LinkedIn at www.linkedin.com/company/hotelrehabs.