Welcome Change: Reinvesting in Hotels

Earlier this month I participated in a panel discussion that asked “Capital Expenditures: A Design for Pinching Pennies or Spending for Recovery?” at New York University’s Hospitality Investment Conference. While our hotel clients are always seeking smart, sustainable, economical designs that maximize ROI, I definitely answer that question with “spending for recovery!”

But what are hotels spending money on? The answer is not uniform – nor should it be. Priorities vary by market, flag, and specific property conditions, and we work closely with our clients to analyze those conditions and set priorities based on their own unique goals. Looking at the broad spectrum though, here are some of the trends that we’re seeing as hotel owners, operators and brands are spending money for recovery:

• Brands are redefining themselves – repositioning to align with current consumer trends such as value, authenticity, comfort and connection. Our work with Comfort Inn and Comfort Suites is a great example of this, focused on experiences and creating the sense of a home away from home that franchisees are excited to implement.
• Public areas are being upgraded as individual owners are investing in property renovations too, whether dictated by the brand or not. Lobbies are becoming more flexible for gathering, meeting, relaxing alone or with a group.
• Restaurants, bars and lounges are getting facelifts as well as menu upgrades to attract local residents as much as hotel guests.
• Updated meeting rooms and banquet spaces are often a priority, too – maximizing the use of space, integrating better wireless technology, and improving opportunities for event revenue.
• Upstairs in the guest rooms, hotels are incorporating more home-like furnishings and spa-like fixtures, better in-room workspaces (with more electrical outlets!), local art and high quality bedding.
• Back-of-house, they’re maximizing the use of real estate and improving operational efficiencies through technology and enhanced infrastructure.
• And more often than not, owners and operators ask for green elements that help them reduce operational costs, such as efficient lighting and HVAC, low-flow water fixtures and solar equipment.

I think we’ve all been relieved that the hospitality market is rebounding a little faster than many of us feared it would. But cautious optimism is still the predominant position, and setting priorities for smart growth is always the best way to invest in the future.

Tom Ito is a principal in Gensler’s Los Angeles office and a leader of the firm's global hospitality practice. Providing overall direction for all hospitality projects, Tom assures that the practice achieves sustainable design, innovation and strong client service on each project. Tom launched Gensler's hospitality practice with the renovation of the Beverly Hills Hotel and has since developed the practice on an international scale with clients throughout Asia, the UK, the Middle East and the Americas. Contact him at tom_ito@gensler.com.