Press

PIP strategies: Planning your property’s glow-up

Originally seen HERE.

It’s not enough for a hotel or hotel group to repaint the walls and change carpeting and light fixtures in guest rooms and swap out color schemes and seating in public areas. Glossy travel magazines and travel-focused “lifestyle” television have shaped the expectations of travelers for years. Factor in the watershed influence of influencers and social media, and keeping things fresh is no longer just an option. It is also important to keep employees who work at your hotel or resort daily in mind, as they too need to be in a place that feels comfortable, fully-functional and exciting.

From the outside in, regular renovations—put into motion with property improvement plans (or PIPs)—are are not only essential in attracting increasingly selective customers at all price points. They can also make the difference in what kinds of employees you attract and retain with the increased importance of providing a good work environment that in turn gives them the motivation to ensure what customers see is what they get. While accomplishing PIPs with consistency is becoming even more daunting with rising construction costs, interest rates, labor shortages and other uncertainties, a well-planned PIP with carefully-vetted designers, contractors and management can ensure continuity in profitability, customer expectations and employee satisfaction.

Fluid Benchmarks in PIP Preparedness

The experts we interviewed referred to general industry estimates. Soft renovations (swapping out carpeting, beds, chairs or mattresses) occur every three to five years, while more extensive hard renovations replacing larger furnishings such as desks, wardrobes, happen every seven to 10 years. However, the reality of renovations is a completely different story.

Mark Knott, Project Management Advisors’ vice president and hospitality sector lead, however, only had to look to his company’s portfolio of over 200 hotels to affirm that PIP cycles’ frequency or depth are not static in nature. Major hospitality projects such as Raffles Boston, St. Regis Atlas (Atlanta), Century Plaza Towers Los Angeles and the Talbott Hotel (Chicago) underscore that what goes into planning depends on a hotel’s brand, property condition and competitive positioning.

“Budget-friendly select-service hotels overseen by a larger firm will follow more prescriptive standards and focus on the consistency across properties, whereas luxury brands require more customization, often seeking higher-end finishes and unique design elements to drive brand differentiation,” Knott said. “Luxury brands may require more frequent updates to maintain high-end positioning. Specific PIP timelines per location will also consider seasonality and market demand, prioritizing renovations during low occupancy periods to ensure higher ADRs and generate a better ROI during busier periods. Technology can also drive PIP decision-making, as data tracking can allow hoteliers to monitor asset performance and anticipate maintenance needs. Innovations like lighting controls, energy efficiency and automation will help streamline renovations—and drive operational cost savings over time.”

Heather Carrasco, vice president of procurement at Coury Hospitality, added that the size of a brand within a major hotel group (Marriott, Hilton, etc.) can dictate the frequency of PIPs and how they are executed. She cited the example of a team working on a PIP or renovation for an Autograph Collection hotel which is required to adhere to Marriott’s specific expectations. They are likely to ask the brand’s management for recommendations on designers they’ve worked with who understand their needs. This gives Coury Hospitality more autonomy as it works with a variety of property types and actively seeks out designers with experience at a specific brand.

“We conduct ongoing quality assurance checks and frequent property walks to ensure that our standards are constantly kept up in asset preservation,” she said, adding that the most important factor in PIP planning is discussing capital plans with the individual properties and owners. “If there is wear-and-tear or damage of any kind, we make a replacement right away rather than waiting the typical amount of time before a replacement is technically needed. It doesn’t have to be seven years before we replace something. This allows for smaller, more intermittent spending on updates and replacements rather than one large lump sum.”

David Kellam, vice president of architecture design & construction at Wyndham Hotels & Resort, pointed out that the approach to creating and moving forward with a PIP is the same, whether it’s an economy brand like Days Inn or an upscale brand like Wyndham Grand. What matters is the vision and the end business goal.

“All hotels are going to have art, furniture and linens,” he said. “A guest staying at Days Inn will have different expectations than a guest staying at Wyndham Grand, and we tailor those finishing touches to suit the guest experience. PIPs are happening all the time. You’ll see them when a hotel is shifting brands, and we go through that process to maintain consistency because that’s what a guest expects from a brand. Otherwise, we’re implementing PIP plans when it comes to quality—and again, it’s to ensure we’re meeting guests needs because when we meet those needs, they’ll stay time and time again.”

Kellam affirmed developing the scope of a thoughtful and strategic PIP starts with conversations with Wyndham property owners to determine specific business needs and crafting the project to focus on the things that will drive a return on investment. Once the decision makers at a property determine those key factors, the scope of the project falls into place. As furniture and construction prices continue to rise, Kellam and his team find it necessary to consider how to design smaller rooms while making them feel larger. One solution is to find smaller pieces like mounted furniture to buy back some available space, while determining a good color palate and thinking through the “emotion of a design” are also important as the finished result can affect how a guest feels.

Designers and Decisions

“Selecting the right designer means making sure they understand the specific hotel brand they’re working with and can adhere to its brand standards, as well as any localization goals across the brand’s portfolio,” Knott said. “With so many hotel brands in the world, particularly in the U.S. market, the goal is to make sure you have a designer that is aligned with aesthetic and timeline goals. Experience with renovation is a must. The creative approach to solving for upgraded brand standards and code compliance, while working around existing infrastructure, is a challenge that not all designers are equally prepared to execute.

Carrasco, meanwhile, said that the designers Coury Hospitality work with have specific hospitality design experience that correlates to the image and philosophy of a given property. “We choose designers whose work aligns with our values of prioritizing the guest experience,” she said. “People come first [at our properties], so we make sure that the designers we work with have similar values that we trust will show through their work.”

And then there are hotels that may have changed hands or are otherwise showing their age. Counting UNC Charlotte Marriott Hotel & Conference Center and Palmetto Marriott Resort & Spa among her projects, Nicole Smith, principal of hospitality interiors at TVS (an Atlanta-basedarchitecture, planning, and interior design firm) recognized flexibility is required on both the parts of the designer or firm and the hotel client.

“In some cases, it has been many years since the last renovation and more upgrades are required to keep the hotel in compliance with the brand standards and quality level,” she said. “In other cases, it has been a shorter duration between renovations and less scope of work is required to upgrade the hotel to meet brand standards—this can mean the difference between a soft goods and a full renovation. Mid-range hotel brands have different brand standard requirements than luxury brands. There is usually more scrutiny with quality upgrades for the luxury brands and the brand reviews tend to focus on sense of place design features to distinguish the property renovation as elevated.”

Smith believes the level of major PIP upgrades versus a limited capital expenditure (CapEx) budget upgrades is part of the negotiation between the hotel owner / brand licensing agreement. Although most hotel owners are aware of a brand’s timeline requirements for renovation upgrades, the PIP scope of work negotiation between owner and brand often occurs before the hotel designer and contractor get involved. “For hotel designers, the PIP is usually included with the request for design services,” she detailed. “There are often differences between what the owner’s budget will allow and what is listed in the PIP. Sometimes the owner elects to include additional hotel upgrades beyond what is minimally included in the PIP, based on the owner’s ROI objectives.”

An Impact on Work/Life Balance

Knott reiterated that understanding occupancy patterns and turnover duration and communicating this with your designers, contractors and project managers will help ensure renovations are phased properly and won’t interfere with high traffic travel periods when 90-100 percent occupancy is expected. However, taking risk factors into account like plumbing infrastructure, especially if you are dealing with older systems, is also important. Good scheduling, however, can also positively impact productivity and employee satisfaction.

Although back-of-house scope of work is included in PIP renovations, Smith said it often tends to be basic finishes such as paint and carpet with occasional furniture upgrades. The owner’s budget is usually limited to what the PIP minimally requires for back-of-house upgrades, because they prefer to spend the budget funds on the front-of-house guest experience which impacts their ROI goals. Kellam and Smith, however, argue that extra effort put into back-of-the-house improvements often pays off in morale, productivity, and the service guests receive.

According to Carrasco, once Coury Hospitalty moves to take over a new property, management and designers will check the conditions of the back-of-house and staff areas. As Coury regards hotel staff as “Experience Curators,” a safe, clean and comforting space providing the best work conditions and space for quality break time can lead to greater well-being for the guests as well. Back-of-the-house improvements encourage “Curator” retention and experience translates into providing unmatched moments for the guests.

“When you take care of your staff, they take care of your guest, and it all goes back to good business practices,” Kellam said, adding that run-down, inefficient workspaces can cause frustration and distract the staff from doing their best work for guests. An updated, renovated and beautiful space, in contrast, makes staff proud to work there. “While updating for the now is important, [it’s always a good idea to] look to the future. Design and construction trends are constantly evolving, and as a brand, it’s our job to forecast into the future to help ensure our hotel owners are meeting and exceeding guest expectations by anticipating those needs.

Knott argued that when hotel staff are the ones managing guest commentary and demands around a renovation, they don’t want to feel left out of the end result. “It is important to invest in back-of-house spaces like redesigned break areas, better locker facilities and so forth to improve employee satisfaction,” he said. “For example, replacing basic cafeterias with modernized multi-use spaces can really go a long way in showing employees that they are valued.”

“From a brand perspective, PIPs drive efficiency and consistency, both of which affect the bottom line of a business and protect the investments owners have in the brand’s they’ve chosen,” Kellam concluded. “That may be aesthetics changes that make a guest feel more comfortable, and that bring in business and entice the guest to stay and influence them to return. On the other hand, it might be back-of-house changes with updates to the actual infrastructure of the building. Investing in and maintaining things like water heaters, laundry and AC units ultimately makes the hotel run more efficiently.”

Design in Mind

While Nicole Smith mentioned TVS mostly focuses on full service or luxury brands requiring a more complete PIP to make a transformative renovation impact, many recent trends appearing in those projects can bolster the guest experience at hotels in various tiers. Some of these include:

Meeting area upgrades: “These are important ROI for owners and hotel group booking opportunities, whether the hotel is located near convention centers, downtown business districts or even resorts that want to draw more business group travel. Meeting area upgrades need to be more than just visual finishes or lighting and furniture improvements, because often the meeting room technology offerings get outdated quickly and need to keep up with current trends.”
Social food and beverage reconfigurations: “These draw guests into the public areas more actively to gather and spend money. While they may involve some design direction from a new F&B operator, or be tied to the overall design vision for the renovation, some properties are also adding quick service F&B outlets, such as grab-n-go markets and coffee shops for guests ‘on the go’ who do not have time to sit down for a restaurant meal.”
“Rooftop and outdoor terrace or pool bars are very popular additions which encourage guest socializing and group events.”
“Local and unique artwork, especially within lifestyle and luxury brands, has become a popular renovation trend to make the hotel look more art-centric, accessorized and tie into the ‘sense of place’ storytelling that goes with a design palette refresh.”