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Hotel Design Trends UK

In the ever-expanding world of pop-up buildings – hotels, restaurants, museums – there’s a newcomer in the UK, Snoozebox, who is ushering in a new era of stylish pop-up hotels. This new breed Hotel Design trends  are aesthetically-chic and can pop-up in 48 hours at festivals and sporting events, with the added advantage of being right in the heart of the action. Right now, one can only find them in the UK but the capability is there to expand worldwide. And here’s why. These hotels are decked out shipping containers, with a double bed and single bunk, full bathroom, air-con, flat-screen TV and free wireless (yes, you heard that right) in every room. Granted, the rooms are on the smallish size, but no expense has been spared in the amenities of these tidy, stylish portable hotels. Plus they can go wherever the world needs additional fashionable accommodations. In other words you call them in when necessary, sort of like a superhero, really. We know that we start to panic when a nice hotel cannot be found at an event we’re attending. The size of the hotel can range from 40 rooms to 400 rooms. It can be set-up as stand-alone hotel that is brought in by the event or festival, or it can be added to an existing hotel to add more capacity. Snoozebox Portable Hotels can mostly be found in 2012 at sporting events, which makes sense considering that the president of the company is none other than former F1 racecar driver, David Coulthard, who ended his racing career in 2008 to move on to other things…like portable hotels. Rates are dictated by the event where the pop-ups appear, ranging from £597 for a three-night package at the F1 British Grand Prix to £149 for one night at the FIM Superbike World Championships. Snoozebox will also be at some of Britain’s largest music festivals: the 2012 Download Festival, with rates at £1930 for a three-night RIP package, and the 2012 Hop Farm Festival at £875 for a four-day package. This is a realistic alternative to adding permanent bedrooms, when business is very seasonal or event based. Compact rooms with very clever designs, Yotel, Snoozebox, are we seeing the future ? If nothing else we can all learn from these compact but very functional Hotel room Designs.


Hotel Guestroom Technology and what you need to Know.

STOP. LOOK. LISTEN. Three simple, potentially life-saving actions drilled into us by our parents and teachers when we are about to cross the road. This sound advice is relevant to all manner of junctions into which we encounter. But for the purpose of this column, none is more relevant than understanding where we are and where we are headed with hotel technology.

During the preceding 30 or so years, the hotel industry has been hooked on placing more and more technology into guestrooms as rooms are refurbished believing the guest wants it, needs it. It’s become a way to stay competitive. In a few cases, some rooms have filled up with so many gadgets that they have almost reached a bursting point.

Reflecting back, one of the first pieces of tech to go into hotel rooms was the telephone. We had a simple rationale for doing this. We put them there because travellers needed to be contactable and make calls while on the road, and the only fixed point was the hotel. We later supplemented the phone with the telex and fax.

Around the same time came the TV. Guests wanted to be entertained in their rooms and have the ability to keep up with current affairs by watching news. Hoteliers thought guests wanted movies, so they attached a VOD system to the TV and later added a DVD player with (questionably legal) on-demand libraries either from the concierge or business centers. Statistics show that apart from news, guests really only wanted to watch pornography.

Then came the fridge, a place where the hotel could put a couple bottles of (comp) water and where the guests could keep their stuff cool. But that wasn’t the case for long. Hoteliers refurbished rooms and morphed them into the mini-bar, offering all manner of overpriced goodies within the impulsive reach of the guest that became a nightmare to control. The electronic door lock quickly followed these innovations.

Room control systems soon appeared in guestrooms, with the kind of functionality one might experience at home: mood lighting settings, opening and closing of curtains from the comfort of one’s bed. Some of these employed motion-sensing controls to raise/lower the temperature or cut some of the power when the guest exited the room.

Guestroom tech and ROI
Then suddenly, as if by the flick of Harry Potter’s magic wand, all of the above became more and more sophisticated, more and more complex to install and manage, and more and more expensive to purchase and maintain. Am I right?

Hotel owners started to question the cost and ROI. As operators, you became increasingly concerned over recurring support expenses. And then there is the guest, heard on a frequent basis complaining that the technology is just too difficult to use. Oh, and one must not lose sight of the fact that there is the obsolescence factor with many of the items being superseded by new models at an ever-quickening pace.

So what do we need to do?

In all this while, we’ve moved on generationally more than at any other time in our evolutionary cycle. However, for most of the hotel industry—and from an in-room tech perspective—it has not.

Just look around and see what hotels  are doing. They dispatch scouts to Refurbished Hotels on reconnaissance missions to see what their competitors have come up with  after the fit out—examining each of their marketing bullets one by one. They take hundreds of photos and measurements and then write up copious notes to include a SWOT analysis. Out of perceived fear or the FUD factor, many copy what they believe to be the most important and end up with a mashup product. Only a handful seems to innovate—most replicate in this cut-and-paste industry.

Less is more
There isn’t a snowball’s chance in hell you can ever compete with the media library the average person owns and carries on a device that neatly fits into a pocket, purse or small case. So why are you adding Blu-ray players or IP-TV systems with video-on-demand functions?

Why are you adding connectivity panels so the guest can tether their device to the TV, when most are very comfortable at either holding it in their hand (like a book) or prefer to connect it wirelessly?

What justification do you have for putting an expensive dedicated shaver socket into the bathroom when the guest really needs a universal power socket?

Then, unless you offer really cheap or free phone calls, will you ever be able to entice guests to use all three of the in-room phones you install to make revenue-generating calls. Most will simply collect dust and be a pain for the housekeeping department to clean. Hotel rating agencies need to wake-up to this new world phenomenon and relax the requirements in this area. It’s time to change the rules of the game.

And when it comes to adding bedside control panels that resemble Boeing 777 flight-deck controls, all the guest really wants to know is “how can I turn off the damn bathroom light?”

To understand what the guest really wants and needs: STOP, LOOK and LISTEN!

What travellers want in hotel technology
Let’s be very clear about this: I don’t profess to be a rocket scientist, a psychiatrist or a fortune teller. But what I am is a fairly good judge of what people are looking for, especially when it concerns hotel tech. Let me give you a simple and short list:

1. Super-fast, reliable and suitably priced Internet access (wired and/or wireless). Wireless is the first choice for most people, with the ability to connect multiple devices—and for free.
2. A well-lit room with simple controls.
3. Power sockets, power sockets and more power sockets. And please, don’t kill the power to all of them when I leave the room. Guests also like USB power sockets so an adaptor is not required.
4. Temperatures that can be easily controlled, both up and down.
5. A place to work—as in a desk. But note: People work anywhere and everywhere today, so understand that, be sympathetic and flexible, and provision for it with power sockets and Wi-Fi.
6. And as for the TV, include 24-hour news channels, sports channels and some entertaining TV channels. Most guests don’t want or like all the marketing stuff you put on the TV, even if you think they do.

That’s a small list, isn’t it?  But it is not funny how many Refurbished Hotels or newly fitted out Hotels get it wrong!

Actually, you can summarize what guests want from a hotel room with three Cs:

1. Clean
2. Comfortable
3. Connected

A fourth might be “cheap,” but what hotelier likes to have his product labeled as cheap

The population in general is prepared to spend time learning how to use personal tech. Why? Because the cost has come out of our pockets It’s hard-earned currency. It will be with them as a tool or amusement for some time. And they need to experience a ROI. Contrast that with the tech found in a hotel room, and most people don’t have the patience or same kind of inclination It’s merely a transient acquaintance.

What does this mean to YOU, the hotelier?
In my opinion, going forward, guests will start to question why they should pay for this tech when they don’t need it, don’t want it and, most importantly, don’t use it. Their desire will be to somehow integrate their tech into your systems and do what they want—with their devices—and customize their experience. They’ve become comfortable with their own devices, they know them intimately and, most significantly, they’ve paid for them, so why are you duplicating the expense? Maybe it’s time to re-think, re-imagine and downsize.

How many times have you looked around and seen people walking down the street, standing in a queue, drinking a latte or just talking with friends? What’s in their hand? Their mobile device of course. These GEN-i folks are so attached to their devices that you’d have to take a crowbar to pry it out of their palms. Believing they’ll pick up yours and learn it is highly speculative—unless you are so blessed to only have geeks for guests.

Consider very carefully the kind of tech you are deploying as you fit out your Hotel. Is it because you feel threatened by what your competitors are doing? Remember they may be on the wrong track. Is it because of the findings from the focus group you so carefully put together and solicited candid feedback from?

A trendy piece of tech is no longer an enticement to make a guest change allegiance from one hotel to another. A B&O stereo or an iPod dock is not a deal breaker, but free Wi-Fi and a free mini-bar can be.

And besides, the lifespan of these toys is very short—12 to 18 months tops—before they become relegated to the old-version league. Can you really afford to swap out gizmos that fast?

When will you STOP, LOOK and LISTEN?, or

Hotel Renovations in a Recovering Market

As the third quarter of 2011 comes to an end, hotel renovations are beginning to make a big comeback—a welcome change in an industry hungry for activity. Owners have begun discussions to re-start projects that were put on hold because of the recession, and new renovation and maintenance projects are in full swing. In this post-recession environment, owners and hotel brands are finding that they are faced with several new realities in trying to launch renovations and, in some cases, re-invent their aging products. Typical renovation cycles have gone out the window, and owners are scrambling to fulfill property improvement plan requirements with limited funds, stricter requirements from their lenders, and new requirements and design directions from the brands. Navigating these new waters can be a challenge, but there are ways to make projects work even in these difficult circumstances. Pressure from PIPs Owners are being required to complete PIPs [product Improvement plans] that are much more demanding in much less time than would have been allowed pre-recession. During the downturn, brands were more lenient with PIP requirements and allowed owners to defer many items, and, in some cases, obtain complete waivers of certain PIP items. With the hotel market rebounding, hotel brands are beginning to get impatient with products that don’t properly represent the brand image that they have worked hard to create. Jonathan C. Nehmer The deadlines for upgrades and PIP completion are approaching rapidly for many hotels that are well past their scheduled renovation dates. All of this is not lost on the traveling public, who also expect to see fresh, newly-designed and renovated hotels after several years of accepting less-than-stellar accommodations. All of these factors are coming together to change the way designers, contractors and owners approach the renovation of hotels. Because of all of these pressures, projects are planned with schedules and budgets that would not have been possible or even contemplated in the pre-recession days. The method of design/approve/bid/build resulted in typical renovation schedules of 14 to 16 months and included significant time for numerous individual reviews and approvals by ownership and brand. The need today is to bring the new designs and newly-renovated properties to market more quickly. Due to the neglect of many hotels, the same renovations must be completed in eight to 12 months. A new approach In order to accomplish these herculean tasks, many owners, brands and project teams have taken a new approach to the execution of the work. The creation of an “extended design team” has become a critical part of new hotel renovations. The extended design team includes the owner, brand and operator in addition to the project manager, architect/designer/consultants and contractor—all working together from the beginning of the project. Involving all necessary consultants from the start of the project enables the entire team to be aware of the schedule and goals, coordinating right from the outset to create a successful project. The old method of design/approve/bid/build cannot provide the speed and accuracy that is required for today’s tight schedules. The extended design team model preserves the design and construction quality required to meet brand standards and guest expectations while allowing teams to work more efficiently. This need to work together to develop uniform expectations for a given property is unique to each project, and each hotel’s needs must be evaluated on a case-by-case basis. By including all of the parties from the beginning, expectations can be managed effectively by a collective brain trust. Everyone needs to work together to develop realistic expectations during this process. A “one size fits all” approach is no longer valid for hotel renovations. In some cases, PIP requirements need to change based on a re-evaluation of existing conditions—some hotel items may have deteriorated faster than others. This newfound spirit of cooperation by the hotel brands, owners and lenders has been implemented in many projects that started in 2011. Designers are able to get the designs done faster because of real-time input from owners and brands. Brands also are more comfortable with the products and review and approve designs more quickly. A holistic view The new realities of designing in the post-recession era require every aspect of a hotel renovation project, from the budget and schedule to the selection of materials and purchasing lead times, to be intertwined and interrelated. It’s a more holistic view of hotel renovation. The extended design team model also integrates reviews in real time rather than providing for reactive reviews at the end of each design phase. While the time saved is significant, the real benefit is that the owner, brand and operator are aware of the design, quality, cost and schedule to a much greater degree than with the design/approve/bid/build method of renovation. The end result of this new design process is that the furniture, fixtures and equipment and long-lead construction items can be submitted for purchasing faster and do not impact the project schedule. The contractor can involve his subcontractors earlier to hone the scope, pricing and execution. If the extended design team model is implemented well, “value engineering” becomes much less of an issue. When all is said and done, this ultimate example of collaboration by all parties can bring many aging properties back to life faster and better than ever before. By Jonathan Nehmer

Finance for Hotel Re-furbishment , 7 steps to Success.


While a clearly defined process and appropriate documentation are essential for any loan request this is especially true for Hotel Finance in this climate, it’s the inputs that make the difference. Think of the process as a recipe and the inputs as the ingredients. The quality of the ingredients used can make a dish that stands out.

The same holds true in hotel finance: Paying attention to what goes into a loan request can help borrowers secure the funding needed even in a difficult and competitive lending environment. In order to be successful, hotel owners and operators should ensure loan requests have the following attributes:

1. Analytical rigor—Strong analytics behind the hotel and sponsorship financials, and performance and market data makes or breaks a deal.
2. Organized presentation—An organized presentation of data, including detailed analytic models help to differentiate a loan request from the pack.
3. One project manager–One person must be responsible for overall management of the deal from start to finish. This includes overseeing the responsibilities of the lender, attorney, title agent, appraiser, surveyor, environmental engineer and others involved in the process.
4. Realism and flexibility—Unlike the go-go days of 2003-2007, it may not be possible to meet all of a borrower’s financing goals. In the current lending environment, it is important to be realistic and flexible. Don’t put off accepting a good deal with expectations of a better one coming along.
5. Professionalism—Working with a third party to help place a loan can often save time and money. If sponsors choose this path, make sure to research companies, conduct background checks and get references before selecting a firm.
6. Prudent leverage—Protect the property’s equity. Smart leverage and an analysis of global sponsorship cash flow can ensure the loan does not go into distress during what appears to be a prolonged economic recovery.
7. Patience—Today, everything takes longer, from lender negotiation to the more intensive underwriting process. If refinancing a loan that is maturing, allow plenty of time to find new debt.

In this economic environment, obtaining hotel refurbishment financing requires creativity, tenacity and flexibility. But it is the professional management of the overall process that leads to a successful loan closing—whether it is an acquisition, refinance or development project. It is important to understand that hotel owners are aggressively competing for debt and equity. As a result, demand for funding allocated to this asset class exceeds available supply. How a hotel loan is structured, negotiated and managed will determine whether a project obtains financing and how quickly the deal will close. Only the best-managed proposals are effectively competing for the limited debt available today.

By using rigorous process management, presenting all the necessary documents and incorporating the key attributes mentioned above, borrowers can increase their chances of successfully securing the funds they need.

By Jane Larkin

It’s not time to build hotels

Luxury Hotel refurbishment kicks into overdrive in London

A Sensory Stay | By Andrew Lo

On a recent holiday in Hawaii, while shuffling from beach to beach on Oahu, I had the chance to read Jonathan Tisch’s Chocolates on the Pillow Aren’t Enough. Mr Tisch, CEO of Loews Hotels, makes the point that it is no longer enough for hotels to offer a unique product or service. Rather, it is the experience that keeps the guests coming back, particularly in the current economy.

Luxury hotel development and refurbishment in London seem to be kicking into overdrive. According to Francesca Nand at HotelNewsNow, estimates are that “by 2012 there will be 18,000 more hotel rooms available” than there are now, with especially strong growth in the luxury sector.

Last October, the Savoy Hotel relaunched after a 100 million pound restoration / refurbishment , while the Four Seasons Park Lane reopened at the beginning of the year. The city has already seen a W appear in Leicester Square, with a Corinthia in Whitehall coming up shortly. The rest of 2011 will find a Bulgari, another InterContinental, and yet another Four Seasons appear on our city’s Where London maps. More than likely, each of these hotels will have one or more of the following: 42-inch Bang and Olufsen TV, Egyptian cotton bed linen, or Penhaligon toiletries.

How then will each of these new or refurbished hotels make themselves unique? Mr Tisch might suggest that it will be through the experiences that they offer. You want your guests to leave your property with delightful memories and stories to tell their friends long after they have left your hotel.

In my opinion, anything that affects the senses is a vital part of the guest experience. Making sure the following bases are covered will significantly reduce the likelihood of unhappy guests posting negative TripAdvisor reviews.

What The Guest Sees: What kind of vibe does the hotel give off? Is it a chic, formal, or relaxed place? Before a guest even sets one foot into the hotel, she takes a look at the outside. What will she see? How is the exterior façade of the building maintained? Are there parts that need touching up? In the guest room, will she see paint coming off the walls? Are there cobwebs in the far corner of the bathroom? Is visible effort put into food presentation in the restaurants? Are staff wearing well-fitted, damage-free uniforms? Before anyone in the hotel has a chance to begin engaging the guest, she may already be forming the opening scenes of the experience in her mind.

What The Guest Smells: Close your eyes and inhale. Where do you think you might be? While easier said than done, it is essential to keep all the public areas and guestrooms fresh-smelling at all times. It would definitely help if smoking was made off-limits on hotel property, but I would be concerned about riots in the streets if such a law was passed in London.

What The Guest Tastes: Whether it is the lemongrass welcome drink served upon arrival, the scones at afternoon tea, or the sausages at the charcuterie counter, you have multiple opportunities for guests to tell others about the amazing F&B offerings at your hotel. So, before that next coq au vin goes out the kitchen, “Taste, taste, taste!”

What The Guest Hears: “Welcome to the hotel, Mr. Jones, how are you doing this afternoon?” or “I notice you are traveling with your children on this occasion, may I ask you about particular housekeeping times you would like us to observe during your stay?” is often all it takes for a guest to feel like you are making an effort to connect. Most guests like to be recognized, and to feel that the hotel staff is trying to meet or even exceed their expectations. That said, use the guest name where possible, but be natural about it.

What The Guest Feels: Here, I am not about to discuss the firmness of the bed and the softness of the pillows. The question is “How amazed is the guest at her experience in the hotel?” The combination of all of the above sensory experiences should culminate in a “WOW! What stories I will have to tell!”

Each day, we have hundreds of opportunities to deliver an unforgettable guest experience. Will you be that special member of staff who turns a first-time customer into a loyal fan?

Finance options for Hotels facing renovations .

Story Highlights

  • Hotel CapEx spending in 2011 is expected to be up 76%.
  • In many cases, owners will opt out of spending and sell.
  • Bridging loans are much more prevalent today than even six months ago


REPORT FROM THE U.S.—With deferred maintenance costs piling up and brands clamping down on required upgrades, hotel owners will be spending more money in 2011 than past years. Trouble is, banks aren’t offering straight renovation loans, so hotel owners are left with a few options: sell, refinance—or get out the check-book.

According to a Bank of America Merrill Lynch report, 2011 total capital expenditure for all the hotel companies in the analysts’ portfolio is expected to be up 76% year-over-year. Each individual hotel company in the portfolio is expected to spend at least 30% more than last year.

“Total Hotel CapEx in 2011 of nearly (US)$2.1 billion is in line with 2006 and 2008 levels and just 13% below the dollars spent at the peak in 2007,” the report reads.

Of the companies Bank of America Merrill Lynch analyzes, Host Hotels and Resorts and Starwood Hotels & Resorts Worldwide plan to write the biggest checks in 2011. Most spending will go toward major repositionings,

“We plan to spend about 6% of revenues in a given year,” said Stephen Schafer, VP of investor relations for FelCor. “Our capital expenditure strategy is to renovate between six and eight properties every year so that our portfolio won’t have anything more than minimal disruption in a given year.”

Host, Starwood and FelCor won’t need to visit banks for assistance, but small owners—such as those forced to comply with Holiday Inn’s relaunch or add new lobbies to their Courtyard by Marriott or Hampton Inn properties—might not have the same-sized balance sheets.

Acquire and renovate
In some cases, those owners will simply opt out of spending capital and contact a broker to bring the property to market.

“The most likely option is the owner will say, ‘I don’t want to write this check, I want to get out of this and let the next guy worry about it,’” said Ryan Krauch, principal at Mesa West Capital.

In order to maintain the brand flag, the new potential owner would then have to be approved by the franchise and would be required to uphold the brand’s property-improvement plan, which is how the necessary upgrades would be completed.

“With the life cycle of the majority of our portfolio, we typically factor in a major renovation upon acquisition, which is part of the deal, and we maintain the properties through the (furniture, fixtures and equipment) reserve,” said Thom Geshay, senior VP of business development for Davidson Hotel Company. “We also typically sell the properties before the next major renovation is due.”
For Rockbridge Capital, a key part of the business plan is taking a look at those capital-starved assets as they come to market and determining whether investing in a renovation and reposition will produce adequate returns. The company recently bought a Park Inn by Radisson near Louisville, Kentucky, and has begun to renovate and reflag it as a Marriott.

“We tend to lever most of our transactions. On the front end, we’re looking for debt and equity,” said Adam Valente, senior VP at Rockbridge. “Typically the renovation component is involved in the majority of transactions. Trying to finance later, after the fact, is much more difficult.”

Valente said he has seen plenty of cases of capital-strained owners “stuck” and forced to sell or take on additional debt.

Bridge loans
For those owners who don’t want to unload the property and can’t afford capital improvements, one option that is much more prevalent today than even six months ago is to seek out a bridge loan. A bridge loan is short-term, enables owners to do minor renovations and is underwritten based on future value and future cash flows.

During 2011, real-estate investment trust FelCor Lodging Trust will renovate six properties for a total spend of US$84 million and redevelop the Fairmont Copley Plaza in Boston, which the company purchased in 2010.

“The best way to get renovation financing today is to roll the request into an overall refinance or acquisition loan. Lenders will most likely require one loan,” said Jane Larkin, managing director of Larkin Hospitality Finance. “I am currently working with a client to refinance his property and a portion of the loan proceeds will go towards property improvements.”

For example, if an owner of a Holiday Inn has an existing loan for US$8 million and needs an additional US$2 million to uphold a PIP, a new lender can offer a US$10-million bridge loan that will pay off the original debt and offer some extra cash for the renovation. The expectation from the lender is the property will be worth exponentially more once the renovations are complete.

“Once the renovation is done, the income is expected to go from US$500,000 to US$1 million a year, for example. And then they’ll take out a permanent loan once it has stabilized,” said Shlomi Ronen, managing director of Lucent Capital. “As a result, we’re comfortable being in the transitional mode.”

If an owner has a cash-flowing property, they should consider an overall refinance that includes money for property improvements, Larkin said.

“We’re definitely doing them,” Mesa West’s Krauch said. “You need to have some sort of value plan; a good business plan and a good sponsor.”

“Yes, they are available today,” Ronen added. “We’re still not back to 2005 where you can get this type of financing in every market across the country. They’re available in select markets that are showing stability, where the rates are still in kind of an upward trajectory.” 

TAGS: renovations, hotel owners, deferred maintenance costs, recapitalize, broker, capital expenditure, refinance, bridge loans, Jason Freed

Hotel Renovations: now or later?

By Jason Q. Freed


Story Highlights

  • It’s time to play catch-up by upgrading areas and items that impact the guest.
  • Most hotels on the market have change of ownership PIPs associated with them.
  • In most markets, renovation financing isn’t available yet.

REPORT FROM THE U.S.—Even if hotel owners aren’t raking in the revenue they were in 2007, most are reporting to at least be in a better position than they were last year. After all, industry revenue per available room in the U.S. increased 8.7% from January 2010 to January 2011, according to data from STR.

So where are those new revenues going? Are hotel owners looking to 2011 as a year they will be investing the money back into their current portfolios, or are they looking to grow the portfolio by acquiring new properties at attractive values?


“I do hear people say, ‘Take your (capital expenditures) money and go out and buy hotels instead,’ but I’m not sure that’s a good strategy,” said Peter Connolly, executive VP of development for Hostmark Hospitality Group, which has ownership interest in 15% of its portfolio. “The CapEx is going to catch up to you eventually. The CapEx bill always comes due.”

Most hotel owners reported they are hoping to do both—play catch-up by upgrading areas and items that impact the guest while keeping their eyes peeled for that great deal that could hit the market at any time. And, in today’s market, acquiring almost always leads to renovating, because nearly all properties up for sale require an investment, whether encumbered by a property improvement plan or not.

“We plan on spending whether we change brands or not,” said Al Whitehouse, chief investment officer for Prism Hotels & Resorts, which has sliver equity in two hotels and plans on ramping up their ownership stake this year.

Whitehouse still sees opportunity to acquire distressed properties and reposition them. Whether that means changing flags or sticking with the current brand and bringing the hotel up to current standards, a significant investment is usually required.

“Most of the hotels that have been in the sales market have enormous change of ownership PIPs associated with them,” Connolly said. “As a result, existing owners who are buyers are spending their CapEx funds on the hotels they are buying rather than the ones they already own.”
Connolly said the recovery thus far is clearly divided by hotels in Top 25 markets versus the rest of the markets. Owners not in the top markets aren’t in a position to spend large amounts on existing hotels, he said, and renovation financing isn’t available yet.

“There are a couple of newer lender programs that are more geared to acquisition and renovation financing,” said Cheryl Boyer, president of Lodging Advisors. “But it’s definitely a factor if the money isn’t there and you aren’t able to get a loan to invest.”

Brands tightening standards
Most owners are either experiencing or expecting brands to clamp down on PIPs in 2011. Extensions were obtainable during the past few years, but now it’s time to write the checks.

“I don’t understand the philosophy of not reinvesting in current assets,” said Mark Crisci, executive VP of investments and development for K Partners, owner of 23 select-service hotels. “Brands are going to tighten up their standards and roll out new initiatives. That’s what you’re buying—the brand.”


Crisci said investing in brand-wide initiatives, especially where there’s proven value, is especially important. He also admitted having access to a solid balance sheet, which may make CapEx investments easier for K Partners than other owners.

“We haven’t typically used renovation financing; we’ve made sure we had enough cash up front when buying hotels that needed renovations,” he said. “We’ve been good about always being true to reserves, even when things got tight for us.”

Boyer said going into an acquisition, most sophisticated owners know about how much they will need to invest to renovate without even looking at a PIP. But certainly she recommends referring to the PIP for a more accurate figure.

Connolly described a potential acquisition he looked at in 2010 where a suburban Chicago hotel hit the market for approximately US$10 million and, after due diligence, it turned out the cost of the PIP was another US$20 million.

“That wasn’t that uncommon last year,” he said. “From a transactional standpoint, you can’t finance that transaction. Even assuming there was liquidity in the lending markets, that lending is risk averse.

“If you went to a lender and said I’m buying a US$10-million hotel and I need a loan for US$30 million, they’d say, ‘Not today.’ Instead of loaning you 60% of the US$30 million, today they’ll loan you 50% of the US$10 million.”

Prioritize spending


But the renovations still need to be done, especially for full-service hotels that are trying to compete with newer, more modern select-service properties, Whitehouse said. Most owners say they are prioritizing guest-facing renovations.

“You have to think about it in terms of guest impact,” Crisci said. “When you start looking at guestrooms, you need new bedding, comfortable mattresses, and everybody who has built in the past 18 months has 37-inch or 42-inch HDTVs. The next thing we do at each property is make sure we’ve got ample amounts of bandwidth so guests have a good Internet experience. At some point it’s a cost versus benefit analysis.”

“It’s really about a sense of arrival,” said Scott Blakeslee, GM of the InterContinental Hotel in Dallas, which just finished a US$10-million renovation. “Right as you pull in you can see a difference. You have to look at today’s business traveler, a young professional who wants that timeless elegance.”

So go out and find that hotel fit out contractor and complete that hotel refurbishment that you have delayed for too long . Specialist hotel fit out contractors will give you sound advice and help you maximise the effect for your money spent .

Rebranding of Distressed Hotels adds value .

Distressed hotels look to recovery

November 9th, 2010, In: Hotels In: News By: smahoney

All levels of hospitality industry professionals met recently at Distressed Hotel Summit2: Stress Test, One Year Later Owners and buyers of distressed hotels, lenders, management companies, and special servicers, met to discuss the state of current and future distressed hotel assets and recovery strategies. Focusing the show on recapitalization, repositioning, receivership, and recovery, the conference aimed to isolate the most important topics specific to troubled hotels.

Speakers addressed the issue of geography, agreeing that geographic supply-and-demand trends influence many of the transactions. “This all depends on the market, the brand, and the location. If you’re in New York City, you’re loving life. Not in other locations,” said David Smith, VP and senior asset manager for CWCapital Asset Management.

A popular topic at the summit was brand recognition. The consensus among the presenters was that recognized and established brands on troubled properties improved the attractiveness of the business. However, simply adopting a brand wasn’t enough to recapitalize on the opportunity. Often hotels will slack on the brand-mandated property improvements and doing so will only hurt the property.

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Travelodge to carry out £2m rebranding of Ramsgate hotel

Travelodge to carry out £2m rebranding of Ramsgate hotel

Janet Harmer
Travelodge is investing more than £2m in rebranding the former Kent International hotel in Ramsgate.
Overlooking the Royal Harbour and Marina, the 57-bedroom hotel with restaurant, two bars, club bar, banqueting suite and meeting rooms is to be transformed into a 68-bedroom hotel with a bar/café. Most of the public areas will be converted to new bedrooms.
Travelodge is leasing the hotel from the Trustees of Morden College who purchased the hotel from its previous owners, Rosslane Investments, which was placed in receivership earlier this year.
Tony O’Brien, UK development director at Travelodge, said that the company had long coveted a site in Ramsgate.
“The hotel is in a prime location and, following the £2m refurbishment we are undertaking, I am sure it will quickly become one of the most popular hotels in Ramsgate,” he added.
The property was sold by Christie + Co, on behalf of the receivers, KPMG