Executive vice president of hospitality, Randy Shelly, contributed his insights to Hotel Business Review on how hotels are in a competition for cleanliness to earn the trust of their guests through thoughtful upgrades and renovations. Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.
In April 2020, hotel occupancy in the U.S. was the lowest for any month on record at a mere 24.5%, according to STR. With the coronavirus pandemic restricting travel and creating a sense of fear around it, the hospitality industry took one of the biggest financial hits. However, it's also in the position to make one of the biggest comebacks.
With a strategic approach to upgrades, hoteliers can transform their properties into a space where travelers feel that their safety and well-being is a top priority, instilling confidence that drives continuous, repeat traffic. From simple cosmetic refreshes to thoughtful renovations to leveraging open-air square footage, properties can earn the trust of their guests as leisure travel picks back up and hotels enter a competition for cleanliness.
Prior to Covid-19, older, dated hotels had the stigma of not being as clean-from wall paint that's lost its luster to worn carpet to high-contact surfaces that are showing wear and tear. With the health care crisis, this sentiment has been amplified, and cleanliness has become more of a deciding factor in hotel choice. The perception of cleanliness and how it relates to a property's ranking in the marketplace will drive more upgrades, ranging from needed cosmetic touchups to full gut renovation overhauls.
Before the pandemic, a hotel room lifecycle was 10 years on average (and even less in high-end hotels). Now, this renovation lifecycle will shorten. Properties will need to stay ahead of the curve and provide customers with the comfort and confidence of staying in a clean, safe environment. This shortened lifecycle will outlast the pandemic as hotels compete to stay relevant from both a safety and cleanliness perspective, as well as an amenity and design standpoint.
Hotel renovations had previously focused on maintenance-staying up to date with the latest standards and designs, keeping a competitive edge, and ensuring the brand was progressing and meeting the guests' needs. Prior to the pandemic, revenue per available room (RevPAR) during the one and two years after renovation had been +7% and +15%, respectively. As cleanliness and safety become the standard benchmark and main traffic-drivers, RevPAR will increase even more the first two years following a renovation. Travelers' comfort level will now be measured more by the hotels' proven and perceived hygiene and sanitation standards rather than design aesthetics and amenities.
Shawmut Design and Construction has already seen hotel clients shift some of their materials, most notably opting for hardwood flooring instead of carpeting. There will be more of a focus on sourcing materials that are easier to clean and disinfect-especially on high-touch areas-and are less prone to capturing and holding on to germs and particulate matter. Material choice adjustments can range anywhere from replacing upholstered headboards with wood, to rethinking fabric choice for lobby furniture, to replacing shower curtains with glass shower doors. Technology is also becoming a key consideration, replacing unnecessary face-to-face and hand-to-hand interactions and high touchpoint areas with contactless systems such as automated check-ins and sensor-based lighting.
While cleanliness will be a greater focus than it previously has been, properties cannot forget the importance of the overall guest experience. Hospitality is, by nature, a social, community-driven industry, and hotels should not lose sight of that fact. Properties can maintain social elements by remodeling shared spaces to avoid further social isolation through safe, thoughtfully-designed areas. Hoteliers should also consider activating any available outdoor space, providing one-of-a-kind experiences in an open-air setting that allows for a safe, communal experience. These enhancements also generate more revenue per square foot.
Before the pandemic, hoteliers in New York City had begun focusing on creating public spaces to be inclusive of the surrounding community; properties in Los Angeles were activating as much real estate as possible to provide a unique guest experience while also creating additional revenue streams. Turning underutilized lobby, meeting, and banquet space into bars and restaurants accomplishes both of these objectives and caters to the trends emerging from the pandemic-some of the population will be focused on staying local, and some of those who travel will want to stay closer to their hotels.
By creating public amenity spaces-keeping safety and health at the forefront-hotels are providing both local destinations and options for guests that allow them to experience their destination without having to leave the property often. Similarly, owners should consider adding more private options such as villas or singular suites-converting multiple spaces into a singular suite-to provide multiple amenities within guests' personal space so they don't have to travel outside the hotel if they don't feel comfortable.
All of these upgrades present an opportunity for hotels to win back market share from homestay offerings. Hotels are able to provide a level of cleaning service, updates, and refreshes that aren't attainable in homestays, achieving an increased level of confidence and comfort with guests. So while the hospitality sector rebounds from record lows, making strategic decisions along the way will allow properties to get ahead of both direct and indirect competitors.
As the country reopens, some hotels that are in the midst of, or about to begin, scheduled work are staying closed to complete the work, taking advantage of the anticipated lower levels of foot traffic and occupancy. While it may seem counterintuitive, now is the most economical time to renovate, saving on both cost and schedule. A property that's shut down or at low occupancy allows for a shorter build duration; couple that with lower construction labor and material costs in the short-term and minimal revenue impact, and it's the highest value for an investment.
On top of that, it's less disruptive to guests since lower capacity levels allow for easier logistical accommodations during construction. Typically, a one-floor buffer is needed to prevent guests from being disturbed by construction, therefore taking two floors offline just to renovate one. With hotels seeing lower occupancy levels, the renovation work can easily be coordinated and scheduled around the blocks of booked rooms, allowing the property to achieve 100% of potential revenue without sacrificing the guest experience, all while having the construction work completed in the shortest time possible.
This slower period of reservations and foot traffic also allows hoteliers to be thoughtful about renovations, ensuring that the updates they make will help them win in the competition for cleanliness. Key to this is upfront collaboration with key project stakeholders-owner, architect, and general contractor-which creates a knowledge feedback loop tapping into each team's expertise to ensure certainty of outcome, achieving the hotelier's goals at the best value. When the design is developed in consultation with the contractor partner, real-time feasibility and budget checks ensure that nothing is incorporated into the design that will be removed later. It also eliminates any potential time lost and cost of a redesign, ensuring the project starts and is completed on schedule.
Partnering from the start, the contractor can provide input into certain means, methods, and materials, identifying critical paths upfront for early planning and providing the maximum amount of time for long-lead material procurement-ensuring the best quality of materials are secured and ultimately maximizing cost savings, durability, and longevity. With hotels focused on maximizing the opportunity to capture bookings during the typical year-end busy season, this method of partnership provides certainty in cost, schedule, and outcome to meet this deadline.
While it's expected that hotels will have a slow recovery-hitting 50% of pre-Covid-19 levels in 2021, 75% in 2022, and 100% in 2023-owners cannot lose sight of their guests' new priorities and the importance of putting them first. Comfort level in travel will be the most important factor in gauging recovery, and hotels have the opportunity to make themselves part of the solution by providing the ultimate client experience-homing in on the safety and well-being of their guests while also providing them with the service and experience they expect. Confidence in the cleanliness of hotels-from the lobby to the elevator to the room-will drive repeat, continuous traffic.
Hospitality and customer satisfaction are at the core of the hotel business model, which is why the sector will recover from this pandemic stronger than ever. The properties that will come back on top will have a focus on safety, an understanding of the importance of purposeful renovations and refreshes, an eye for activating as much square footage as possible, and an unyielding commitment to making their guests feel comfortable and confident-ultimately winning the competition for cleanliness.
See the article on Hotel Business Review here.