It has been noted in many recent trade journals that 2012 & 2013 will see elevated activity in renovations, compliance to brand standards and the repositioning of hotels!
This expectation comes with a solid foundation!
• All indications point to another year of very little debt or equity financing available for new construction. This is a huge advantage for existing hotels that revitalize their properties for the coming business demand. As business improves, no-action regarding deferred CapEx is “poor business”. It is important that hoteliers take action to both “Extend The Life Of The Asset” and position the hotel to outperform the competitive set.
• Even those properties seeking to secure “contract” business will need to invest in their asset! Prospective clients and meeting planners often demand a commitment that specific items be addressed before an agreement is finalized. Requests such as these may involve meeting room technology, guest room upgrades or fitness center improvements. Identifying and completing those improvements before your client visits your property is strategic! For hotels…..you never get a better time to make a “good first impression”……than the first impression!!
Therefore, properties that refuse to strategically plan and activate upgrades and improvements will miss the full impact of a recovering business environment. In reverse, those hoteliers that have prudently performed……or are now “kicking-off” CapEx projects will be the first in line to capture the new business.
So the real question is: Your CapEx Planning – If Not Now, When?
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