How To Maintain…Your Budget, Your Brand And Your Guestrooms, While Maximizing Your ROI Throughout 2020!

Maintaining your guestroom furniture is a critical component to your hotel’s long-term profitability. Why? Because it affects so many other areas in the hotel such as guest experience leading to reviews, brand standard specification leading to passing PIP reviews, just to name a few. FF&E is one of the largest components of hotel assets and 9% of a hotel construction budget (architectural, design and project management are 12%). Managing costs is vital. When it comes to sourcing, refinishing eliminates long lead-times, and costs incurred for shipping, taxes, labor for moving, storage and disposal all while improving your hotel’s CO2 footprint as an added value.

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Let's take a closer look at the REAL costs for a U.S. average-sized hotel. In 2017, according to Smith Travel Research (STR), FF&E costs averaged $10,000 per room per year. Not addressing the obvious FF&E wear and tear issues for a moment, if just one-half of one percent of those rented rooms had a “serious” maintenance-related failure, approximately 139 room nights per year would be detrimentally impacted! With an average-sized 115 room hotel, if those rooms were out of service for just one day, using 2017’s average room rate of $127 per night, the hotel could face $17,653 in lost revenue. If a room is out of order for more than one day, that lost revenue figure quickly grows higher.” During a renovation, The Refinishing Touch? understands the critical importance of getting rooms back into service, as soon as possible, for your guests! With our on-site refinishing, we’re able to return hotel rooms back for occupancy that same day saving tremendous amounts of money with no downtime!

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As hotel brand options continue to multiply, PIPs also continue to take center stage for hoteliers. Planning for PIPs early on can directly increase proceeds to sellers and lower the costs for buyers in most hotel transactions. In the right market conditions, a PIP can be highly beneficial. PIP renovations often create a path to increased profitability, providing a favorable return on investment. With the ongoing demand and increase of brand options contributing to rising PIP costs, parent brands seek to differentiate consumer experiences at each of their sub-brands, partially through furniture packages, revamped amenities and finishes. The total amount of work required to meet brand standards under a PIP can vary tremendously. These factors typically depend on the property condition, length of time since the property’s prior renovation and recently enacted brand standards not completed by the seller.

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We always encourage hoteliers to contact The Refinishing Touch? early in the specification process. It gives us the opportunity to save you time and more money without incurring more costly missteps that could be avoided. And while our goal is to help you avoid pitfalls with our years of experience and expertise, we also know that if price is driving your decision, that can be the costliest misstep.

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If the brand believes in the ownership and with the proposed upgrades in PIP that the asset will complement the market, they may be more willing to defer or modify certain requirements. This strategy allows the buyer to negotiate with the brand for certain PIP modifications and controlling capital expenses. With an accurate understanding of the PIP cost, that is the time to negotiate with a trusted contractor to get your hotel completed within the budget and scheduled time frame.

In most cases, updating guestrooms and public areas allow a hotel to be more competitive both for transient and group demand. If a PIP gives a hotel a chance to stand out among the competition, it can reward the owners with a greater market share and increased customer satisfaction, and thus a greater profit. Hotels are always looking to create those “Instagram-able spaces” within their hotel.

Photo: The Edwin Hotel, Chattanooga, TN.

There has been a lot of discussion on the design side of the hotel industry regarding brands expanding their flexibility & adaptability in the industry. For a hotel brand, it’s the value perception of an experience we promised to them as stated by Alan Roberts, Global Head, Embassy Suites by Hilton. Allowing more room in the brand provides opportunity for regional tweaks. Hotels can put their stamp on the property becoming more connected, authentic. Activating more freedom of design in the common areas & public spaces requires inviting the local culture to truly be showcased with local artists, F&B enhancements, music. All these add to that experiential luxury guests are looking for.

The Refinishing Touch? has completed renovation projects with many brands over the 42 years of operation. We help Project Managers, GM’s, Chief Engineers, effectively navigate around the costly PIP pitfalls because of our years of experience and expertise.

View our completed projects list!

We are the trusted and preferred supplier for HILTON.

In 2021, Lodging Econometrics forecasts that Marriott will open 328 new hotels/40,841 rooms, IHG to open 284 new hotels/27,810 rooms and Hilton to open 268 new hotels/29,373 rooms. Should all these hotels come to fruition, these three companies will continue their dominance opening 73% of all the new hotels in 2021.

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It is very evident that global leaders such as HILTON, Marriott, IHG, and many more are also understanding how important it is to laser focus on providing key experiences, specialty services but they are also focusing on giving back to the community, adding sustainability back into their hotels. When you make the decision to refinish your guestroom furniture, you are adding green back into your hotel and reducing your CO2 footprint.

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When changes and improvements are made even one percent at a time across every department, it solves hundreds of problems across the hotel. This process is based on implementing a Kaizen program modeled after the Japanese idea of continuous improvement by small steps. It leads to improvements in everything from planning for guest arrivals and departures to reducing the use of plastic throughout the hotel. Success always includes consistency.

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The Refinishing Touch? has been providing hotels with successful, consistent management for existing assets for over 42 years. During that time and completing more than 7,000 renovation projects nationwide, there have been many problems seen, discussed and solved when it comes to refinishing, re-engineering and reupholstering FF&E for hotels.  

Our team will partner with you and review all the critical details during pre-construction planning of your renovation and provide many options you may have not considered. We provide on-site refinishing, re-engineering and reupholstering but we additionally provide solid surface replacement including stone, glass and laminate. We also provide decorative hardware selection.

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Our expertise includes providing strategic timing for when it’s best to have our team on the property during the renovation to keep it running seamlessly. We save you additional costs by not moving the furniture out of the rooms and incurring additional manpower, time and storage and reducing downtime of rooms out-of-service by getting the rooms back in-service the same day in many cases. This sets us apart and provides you with a trusted partner that has the professional experience you can count on.

Call us today for your online quote at 1.800.523.9448 and email Erek Schwartz, Sales Manager at [email protected] to discuss your project. It would be our pleasure to be your Sustainable, FF&E Solution Provider! For more information about our community of services, we invite you to visit www.therefinishingtouch.com

RESOURCES:

Navigating the PIP Process with a Project Manager By Stephen Siegel, Principal of H-CPM (Hospitality CPM)

Best Practices for Managing Your Hotel’s Next Property Improvements By Lillian Connors

Preparing for a transaction in a new era of PIPs By Nick Plasencia & Lou Plasencia

Lodging Econometrics Business Opportunities - 2nd Quarter 2019  -U.S. Edition