How to succeed while operating through a renovation
 
How to succeed while operating through a renovation
08 JULY 2019 8:28 AM

Operating a hotel through a renovation can be a challenge, but a focus on guests, careful planning and open communication can help keep interruptions at bay.

REPORT FROM THE U.S.—Anytime a hotel chooses to operate during a renovation there will be challenges; but with best practices in place, interruptions can be kept to a minimum, sources said.

It’s extremely rare for a hotel to completely shut down during a renovation unless the infrastructure will be knocked down and rebuilt, said Israel Mora, GM of the 405-key Holiday Inn Los Angeles-LAX Airport. His hotel completed a full remodel in May and remained in operation.

He said the renovation of the hotel, which was built in 1972, was a unique experience and “challenging in some ways but better in others.”

Improvements to the Holiday Inn Los Angeles-LAX Airport included all new guestrooms and lobby. Normally something like a lobby remodel would require the hotel to do one half at a time and wall off the part under construction, he said.

“We honestly did something a little different,” he said. “We first built up the downstairs—where the parking area is—and set up a check-in counter and small lobby, where we were able to handle all of our guests while we shut down the entire lobby.”

Timing and planning
Though it was difficult to be without a full lobby for six months, the renovation plan surprisingly worked very well, Mora said.

To spruce up the makeshift lobby, his team added plants, seating and other décor to make guests feel welcome. It was also important that temporary walls were strong enough to prevent noise and dust from spreading.

Guestrooms were done one floor at a time, which meant during the renovation 37 rooms were out of commission for each of the 11 floors.

“Depending on how your hotel is constructed, sometimes drilling one floor will be heard below and above, so we had to be really careful about when that drilling happens,” he said. “We always limit that drilling to the afternoon.”

There were some nominal experiences of noise, he said, but the staff was able to move guests who were sleeping during the day away from it.

During renovation of the Montage Laguna Beach, the first priority was the front entrance lobby and lounge, then onto guestrooms and suites, GM Anne-Marie Houston said in an email interview.

“We zoned off the resort with partitions, or discretely closed off a wing when needed,” she said. “Many of our guests were not aware we were actually working ‘behind the scenes.’”

Communication and transparency
However, it remained important for the hotel to communicate with guests that a renovation was going on. She said her hotel’s staff worked with Montage International’s project team to carefully plan the refresh to minimize guest disruption.

“We made sure to communicate with our guests each step so there would be no surprises,” she said. “As a result, we encountered very few issues. Our guests have been extremely understanding of the work, over the last five months in particular, thanks to our professional team.”

Houston added that her team worked around guests’ business commitments, and Montage’s project team understood that guests are the first priority.

Transparency with guests before and during the renovation is key, Mora said.

“We try to put it into all of our websites and confirmations that we’re under renovations. I’ll be truthful … most people don’t read and they still show up and they’re a bit surprised, so we try to be as transparent once they’re here. We explain everything that’s going on,” he said.

Matt Bailey, managing director of Carmel Valley Ranch in *Carmel Valley, California, said the golden rule to a renovation is no one should ever be surprised. His property’s refresh and renovation, which debuted in June, included a new creamery, refreshed guest suites, and meeting and event space.

He said when people booked rooms, his staff made sure guests, third-party partners and meeting planners were aware of the renovations.

“If (groups) had sessions going on, we either scheduled quiet work or we shut down; there were a few periods of time where we would shut down for a couple of days,” he said. “It was costly to do that, but our relationships with our groups are important enough that we’re willing to do that.”

It’s not uncommon though for guests to say, “Oh, I will come after (the renovation) is done,” he said. To keep guests informed, the property continually updated its website with renderings and phases of the renovation.

“As you complete things, updating your photographs to show the new product is very beneficial. … People get excited about that,” he added.

Bailey said it was also beneficial to have the front-of-house staff show guests a building map outlining where the renovations were taking place.

Revenue-managing renovations
Mora said construction rarely runs on time, so it’s common to miss the completion date by a few months. This can cause displacement since rooms are out of commission, he said.

“In our case, well over $1 million (was) lost in revenue while we renovated; that’s not unusual,” he said. “When the renovation’s over, rates go up, occupancy goes up and you make up some, if not all, of that.”

Something like that should be planned for, he said, and he ensured that the hotel’s owners knew.

His sales team understood that while in construction, rooms might need to be discounted. However, he said, market strength and demand drives rates more than a renovation.

Houston said Montage Laguna Beach’s sales team carefully monitored occupancies “and orchestrated the refurbishment in line with ebbs and flows.” She said her hotel was fortunate enough to not be in a situation in which it had to offer discounted room rates.

Bailey said Carmel Valley Ranch’s main sources of revenue come from meetings and guestrooms. He said the hotel didn’t have to do too much discounting because the impact on guestrooms was relatively minimal.

His sales team did not start increasing room rates until the renovation was complete, which was a good selling tool because it allowed guests to see the finished product and understand the value, he said.

From a group business standpoint, he said the hotel did have to make some concessions because the work being done for the market and creamery was near the meeting spaces. “Because of that natural skepticism, there were meeting planners who worried there was going to be issues,” he said.

Making it a success
Bailey said the success of his hotel’s renovation came largely from having passionate owners, which fueled a very thoughtful and careful renovation.

“We met every week as a group with the contractor, our project manager … and made sure that everybody was on the same page. … If we had delays, everybody knew they were coming,” he said.

He said Carmel Valley Ranch is always evolving and his team is already planning its next set of renovations.

Houston said it isn’t easy to undergo a renovation, “but our teams complemented each other perfectly throughout with good humor and understanding at all times.”

Mora said his hotel is already seeing the benefits coming out of the renovation. “Guests are coming back and are thrilled with the new product,” he said.

*Correction, 8 July 2019: This story and photo cutline have been updated to correct a hotel's location. 

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