Product Improvement Plans can be a tremendous asset to the life blood of any hotel. Even though a PIP is designed to position a hotel for the future, it is also a very serious capital expenditure process. A little work on the front end of the PIP project can be most rewarding to hotel ownership, management and the renovation team. Consider the following tips….to help your team complete a PIP which will postitively affect the guest perception of the hotel.
1. Review & reconcile the PIP document
Product Improvement Plan documents can have mistaken or mis-leading information. Leaving these inaccurate pieces of data in the PIP can cost you substantial money. One of the requirements might read something like….“85 rooms have new wall coverings. These wall coverings are acceptable however the remaining rooms must be re-vinyled to match.” As an example….if the acceptable room quantity was actually 185 units, it could lead to an approximate $80,000 glitch in the cost analysis of the PIP. Even a few misleading issues added together could throw the PIP estimate off by several hundred thousand dollars. Bring all erroneous issues to the attention of the franchise’s PIP department. Get all the inconsistencies resolved, the wording changed and a revised PIP issued.
2. Determine the cost of the PIP
Some organizations use a combination of their Chief Engineers, outside Contractors and an Operations Director to “wing” the estimating phase of a Product Improvement Plan. This leaves too many “gray areas” and overlaps that can cause budget embarrassments at the end of the project. Good examples are such project costs as waste management, freight variances, sales or use taxes, contractor overhead & profit percentages, purchasing fees, equipment rental, storage, etc. Hoteliers can expect a better PIP project if they use an independent consultant to estimate the wide variety of elements involved in executing and completing a Product Improvement Plan. Such services are not expensive. Information and documents produced by such consultants are beneficial to ownership, financial partners, hotel management and the project team throughout the renovation process.
3. Assemble the right team
The mission is to accomplish the PIP renovation with the least disruption to the hotel guest and operations staff. The sub-components of this mission are bringing together a general contractor, architect/interior designer, purchasing group and consultants that all “buy-in” on bringing the project in “at/or under budget and on time”. Unexpected issues will surface in every Product Improvement Plan project, but each team member must commit to resolving those issues without direct effect to the overall budget or schedule.
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