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Breathing life back into dying properties
April 2 2013

Struggling hotels can be brought back to relevance if owners are able to execute a well-thought-out turnaround plan, panelists said during the Hunter Hotel Conference.

Highlights
  • Constant communication between everyone working on the renovation project is the best avenue for success, panelists said.
  • The rise of social media puts an added onus on owners to ensure their hotel is checking all the right boxes, Access Point’s Jim Alderman said.
  • Hotels built 30 or 40 years ago might have a frame that is salvageable.
By Shawn A. Turner
Finance Editor
Shawn@HotelNewsNow.com

ATLANTA—All is not lost for hotel properties that have flopped and are on the verge of oblivion. With creative thinking, teamwork and attention to detail, these hotels can become superstars once again, panelists said during the 25th annual Hunter Hotel Conference.

It’s important for owners to be proactive in changing the fortune of these hotels and boost return on investment, panelists said during a breakout session titled “From Dud to Stud: How to Elevate Your Asset.”

“A dud to me is not making money for me,” said Jim Alderman, chief investment officer at Access Point Financial. “Based on the TripAdvisor reviews, guests will tell you tonight if you have a dud.”

The first step in turning around these flailing assets is to bring a comprehensive team together from the start—owners, managers, designers, contractors, etc.—and ensure constant contact and communication between team members, panelists said.

“If you’re not getting after it, your competitor is,” said Jim Anhut, senior VP of Americas brand management at InterContinental Hotels Group.

Alan Benjamin, president and CEO of furniture, fixtures and equipment procurement company Benjamin West, recalled a project that resulted in a successful renovation of a hotel. The hotel had an involved owner and operators who coordinated efficient communication between the various groups involved in the project. The end result was a sharp-looking hotel that included an “energized” lobby with video wall and central bar.

“The reason it worked is because we had everyone working together at the same time,” he said.

It’s also important to keep the hotel’s staff in mind when imagining what the final look of the hotel will be post-renovation, Anhut said.

“These are the people who have to operate the hotel,” he said.

Benjamin added: “Before you are out with the old and in with the new, hit pause. Figure out what works.”

Guests also play a role in the redesign of a hotel, the panelists agreed.

“You’ll see brand companies spending a lot of time with guests,” Anhut said. “Our philosophy is it’s a very transparent world now. The guests can see what you’re doing and not doing.

“The days of us doing things in a vacuum are over.”

The rise of social media puts an added onus on owners to ensure their hotel is checking all the right boxes, Alderman said. “You can watch someone You Tube their experience,” he said. “They put it up so fast.”

Creative thinking
An outside-the-box approach is sometimes best, Anhut said. He remembered a property in Atlanta that underwent a creative renovation after being kicked out of IHG’s system because of poor performance. He said the 400-room exterior corridor hotel shrunk to 300 rooms by creating shotgun suites and closing off one of the corridors.

The hotel later returned to IHG for admittance back into the system, and IHG’s development team “saw promise” in the new design, he said.

When it comes to renovations, Jonathan Nehmer, president of architecture and construction management company Jonathan Nehmer + Associates, prefers to get everything done in one shot.

“We love it. Do it at one time,” he said. “It’s great. You get better buying power.”

Stephen Siegel, principal at construction management company h-cpm, said he prefers to get the work done all at once, too, but acknowledged that owners might not share the same sentiment.

“For us to do it all at once, it’s very beneficial,” he said. “But obviously, we don’t want you guys to lose any money” by having to close down part or the entire hotel during renovations.

Alderman said it’s usually best for hotels to incorporate as much of the work being required by the brands as possible. “Trickling it in every once in a while will probably leave you behind,” he said.

If the redesign is happening piecemeal, be cognizant of what furniture items are placed next to each other. It’s best not to place a brand new piece of furniture next to an old piece, Nehmer said.

“They get old-looking in a hurry,” he said.

Those that can’t be saved
Unfortunately, there are some hotels that, despite an owner’s best attempts, simply have to be put out to pasture. In those cases, the owner should devise a plan for the property, Nehmer said.

Is the box of the hotel salvageable? Is it worth thinking about down branding the property? Hotels built 30 or 40 years ago are much different than the properties going up today, he said.

“When you take it down to the frame, they have a lot of life left in them,” Nehmer said.

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