hotel renovation business plan

Hotel Business Plan Template

Written by Dave Lavinsky

Hotel Business Plan

You’ve come to the right place to create your hotel business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their hotel companies.

Sample Hotel Business Plan Template

Below is a template to help you create each of the key elements of your own hotel business plan:

Executive Summary

Business overview.

Pegasus Hotel is a startup full-service independent luxury hotel in Austin, Texas. Owned by two local businessmen, Frank Girard and Miles Butler, it will serve the new up and coming district of the outskirts of Austin and cater to the locals and travelers who crave a luxurious and relaxing atmosphere. Pegasus Hotel will be a 10-story, 360-room hotel with a five-star restaurant and bar, relaxing pool and spa, 20,00 square feet of meeting and event space, a spacious and fully-equipped fitness center, and a view of scenic Austin. Pegasus Hotel will hold weddings and events, meetings, retreats, and those looking to unwind and be pampered while staying at the hotel. The service and amenities will be first class and the concierge will treat guests with extreme care and ensure guest satisfaction is held at an exceptional standard..

Service Offering

The following are the services and amenities that Pegasus Hotel will provide:

• 354 luxury rooms, two presidential suites, and four parlor suites
• Olympic size pool with adjacent hot tubs and surrounding cabanas
• First-class full-service spa
• First-class restaurant and bar
• Spacious fitness center
• Over 20,000 square feet of attractive meeting space for events
• Concierge and butler service
• Complimentary wifi
• Valet service
• Laundry service
• Business center

Customer Focus

Pegasus Hotel will target the population of Austin, Texas, its surrounding communities, and travelers visiting Austin for work or play. Guests will be mid to high level income, enjoy traveling, enjoy visiting spas and high-end restaurants, and work in the corporate or government sector.

Management Team

Pegasus Hotel will be owned by Frank Girard and Miles Butler. They will act in an Owner capacity, and will not be involved in the day to day operations of the hotel. Frank and Miles will hire the appropriate staff to ensure Pegasus Hotel is a profitable and successful business.

Lorenzo Falucci, General Manager, has over twenty years of experience in the hotel industry. He has most recently managed another independent boutique hotel in New York and was excited to be recruited by Frank and Miles to operate the Pegasus Hotel.

Lorenzo will hire Lisa Montgomery as the Director of Sales and David Jimenez as the Assistant General Manager. Lorenzo, Lisa, and David will be the senior management team of Pegasus Hotel. They will oversee all other department managers – Maintenance, Housekeeping, Front Desk/Guest Relations, and Food and Beverage. Each department manager will oversee various employees in their respective department and role. The Pegasus Hotel will have a large and sophisticated operation as each department is integral in the success of the hotel.

Success Factors

Pegasus Hotel will be able to achieve success by offering the following competitive advantages:

• Friendly, attentive, and highly responsive staff that caters to each guest and will be able to provide the best guest experience possible.
• Luxurious amenities throughout the hotel that will make each guest feel pampered.
• Modern and contemporary designed hotel tucked against a beautiful Texas landscape perfectly suited to host any event.
• Competitive rates and frequent guest discounts.

Financial Highlights

Pegasus Hotel is seeking $10,000,000 in debt financing to begin constructing the hotel and commence operations of the business. The funding will be dedicated towards securing the land lease and the hotel build-out and design. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, furniture, fixtures, and equipment, initial inventory, and working capital. The breakout of the funding is below:

• Secure the land lot, architecture, build-out, and design: $6,000,000
• Hotel furniture, fixtures, and equipment: $2,000,000
• Initial inventory: $750,000
• Three months of overhead expenses (payroll, rent, utilities): $1,000,000
• Marketing & advertising: $150,000
• Working capital: $100,000

The following graph below outlines the pro forma financial projections for Pegasus Hotel.

Company Overview

Who is pegasus hotel.

Pegasus Hotel is a startup full-service independent luxury hotel in Austin, Texas. Owned by two local businessmen, Frank Girard and Miles Butler, it will serve the new up and coming district of the outskirts of Austin and cater to the locals and travelers who crave a luxurious and relaxing atmosphere. Pegasus Hotel will be a 10-story, 360-room hotel with a five-star restaurant and bar, relaxing pool and spa, 20,00 square feet of meeting and event space, and a view of scenic Austin. Pegasus Hotel will hold weddings and events, meetings, retreats, and those looking to unwind and be pampered while staying at the hotel. The mission statement of the hotel is to provide first class service and amenities.

The guests rooms will include luxury beds and bedding with best-in-class furniture and bathroom fixtures. Pegasus Hotel will also have a full-service spa that will be able to provide massages, facials, makeup and/or hair service, steam rooms, and a sauna. The Olympic-sized pool will have adjacent hot tubs with a swim-up bar and surrounding cabanas. Pegasus Hotel will be equipped with state-of-the-art fitness equipment in its spacious gym. The restaurant will be a high-end steakhouse that will feature entrees from a world-renowned chef and a wine list cultivated by the area’s most respected sommelier. There will also be over 20,000 square feet of meeting space that will hold weddings, bat mitzvahs, reunions, galas, and any special event.

Pegasus Hotel will be independently owned and operated and will feature its own reservation system and operational software. Each employee will be expertly trained and vetted to pass luxury industry guest service standards. Pegasus Hotel is committed to providing the best guest experience possible while maintaining a profitable hotel. Pegasus Hotel aims to be a step above the rest and be an unforgettable experience for all who step foot into the hotel.

Pegasus Hotel History

Pegasus Hotel is owned by two local businessmen, Frank Girard and Miles Butler. Frank and Miles have been friends and business associates for over thirty years. They became friends in college while attending The University of Texas at Austin. Frank is a real estate developer specializing in commercial real estate and multi-use land projects. Miles is a software engineer who has built multitudes of software programs for various companies. They have both been extremely successful in their careers and want to divest their investments in a large-scale full-service hotel in Austin, Texas.

Since incorporation, Pegasus Hotel has achieved the following milestones:

• Acquired a 40-acre lot on the outskirts of Austin, Texas.
• Registered Pegasus Hotel, LLC to do business in the State of Texas.
• Hired a consultant to conduct a feasibility study for a full-service hotel in Austin.
• Began developing reservation and operational management software for use at the hotel.
• Began the branding image, logo, website, and social media accounts for the staffing agency.
• Applied for a liquor and mixed beverage permit with the Texas Alcoholic Beverage Commission.
• Hired an architect to begin the design phase of the hotel.

Pegasus Hotel Services

The following will be the services and amenities Pegasus Hotel will provide:

Industry Analysis

The hotel industry is expected to increase to a $133 billion in the next five years. The hospitality industry will benefit from increases in travel spending, corporate profit and general consumer spending.

As consumers earn higher incomes and businesses replenish their budgets, travel spending is projected to increase over the next five years. Inbound trips by non-US residents are anticipated to rise 22% over next the five years, while domestic travel is expected to grow 9% during the same period.

The industry will see particularly strong future growth in extended-stay hotels, boutique hotels, spa and health retreats and resorts segments. As demand for these auxiliary services picks up, industry employment is anticipated to recover and increase over the next five years. Industry players are also expected to continue expanding abroad into emerging economies, such as Asia, Eastern Europe and South America. These foreign markets are expected to somewhat detract from domestic capital investment, as they offer higher growth prospects for industry operators.

Customer Analysis

Demographic profile of target market.

The precise demographics for Austin, Texas are:

Customer Segmentation

Pegasus Hotel will primarily target the following customer profiles:

• Individuals and families who have disposable income (mid to high level)
• Frequent travelers
• Individuals who dine out and visit spas frequently
• White collar workers (corporate or government office)

Competitive Analysis

Direct and indirect competitors.

Pegasus Hotel will face competition from other companies with similar business profiles. A description of our direct competitors is below.

Hotel Ella is a historic boutique hotel located in Austin, Texas. Located in downtown Austin and walking distance to the University of Texas campus, Hotel Ella is a stylish boutique hotel housed in the historic Goodall Wooten House, one of Austin’s original landmark estates. Constructed in 1900, the Greek revival-style mansion underwent an extensive renovation in 2013, and now offers the perfect balance between modernity and a rich history rooted in the fabric of the neighborhood and the university. Hotel Ella has 47 guest rooms, a cabana-lined pool, and a wrap-around veranda overlooking the front lawn. Hotel Ella features beautifully designed outdoor and indoor spaces perfectly suited for a vacation, wedding, or corporate event. The hotel also features a diverse collection of Texas Modernist works around the hotel grounds.

All guests of Hotel Ella are treated to warm southern hospitality and superior personalized service during their stay. The historic property is appointed with a variety of elegant 21st century amenities. Hotel Ella also offers the following amenities and guest services:

• Complimentary 24-hour guest services
• Complimentary high-speed wi-fi access
• Complimentary electric car charging station
• Complimentary morning newspapers available in the historic mansion
• Complimentary coffee stations from 5am – 11am
• Twice-daily housekeeping service
• Cabana-lined outdoor pool
• Fitness center
• Same-day valet laundry services
• In-room dining by Goodall’s
• Business services: photocopying, printing, postal services, and supplies

Hotel Ella also welcomes dogs of all sizes at no additional fee.

Kimber Modern

Kimber Modern is located in the hip SoCo district of Austin and is intended to draw in the independent urban traveler seeking a unique escape. It is architecturally designed with clean lines and abundant light filtered through canopies of oaks in an artfully landscaped Courtyard. The hotel also encompasses absolute comfort and attention to detail while providing technologically sophisticated rooms in their boutique guest rooms. Guests booking at Kimber Modern will receive complimentary beverages, parking, and WiFi.

Kimber Modern offers the following hotel amenities to its guests:

• Off street covered parking
• Electric car charging station
• Keyless entry
• Complimentary WiFi throughout the hotel
• Multi-level courtyard with a 25-foot glass water feature with multiple areas to lounge
• Jura self-serve coffee system featuring a variety of coffee drinks 24/7
• Beverage bar 24/7
• Gourmet teas
• Virtual concierge – computer, printer, and copier
• Meeting space available for groups
• 3pm check-in and noon check-out

Guests are also available to book the entire hotel for their group.

The Cat Noir Hotel

The Cat Noir Hotel is an award-winning 14-room boutique hotel located in the heart of Austin’s east side. The European-styled boutique hotel includes a restaurant and bar partner, Uncle Nicky’s Italian Specialties. Uncle Nicky’s offers a relaxed all-day dining experience that is themed after cafes in northern Italy. The Cat Noir Hotel opened in 2016 and has been ranked #2 by Travel + Leisure’s World’s Best Awards and Top 20 Best Hotels in Texas by Conde Nast Traveler.

The Cat Noir Hotel’s contemporary design maintains a sense of warmth and a unique aesthetic that is felt through the lobby, outdoor spaces, and each of the unique guest rooms. In addition to the design elements, The Cat Noir Hotel boasts the following features:

• Private roof deck for guests to enjoy the stunning views of downtown, the Texas Capitol, and the University of Texas
• Outdoor patio and courtyard areas on all levels
• Artwork from local artists

Each of the guest rooms include Juliet balconies with neighborhood views, fine linens, and Simmons luxury plush mattresses.

Competitive Advantage

Pegasus Hotel will be able to offer the following advantages over their local competition:

Marketing Plan

Brand & value proposition.

Pegasus Hotel will offer the unique value proposition to its target local market:

• Professional and attentive staff dedicated to ensure complete guest satisfaction.
• Various amenities throughout the hotel for any guest to enjoy.
• Modern and contemporary design with beautiful Texas views throughout the entire hotel.
• Competitive rates.

Promotions Strategy

The promotions strategy for Pegasus Hotel is as follows:

Social Media

Pegasus Hotel will invest in advertising the hotel on social media platforms Facebook, Instagram, LinkedIn, and Twitter. By using targeted social media marketing, Pegasus Hotel will be able to reach those who frequent nice restaurants and spas and travel frequently.

Website/SEO Marketing

Pegasus Hotel will invest in a strong SEO presence so that when someone enters “Austin boutique hotel” or “first class hotel near me” in their Google or Bing search bar, Pegasus Hotel is at the top of the list. Their website will feature photos of the guest rooms, meeting areas, pool, spa, fitness center, and restaurant/bar. Future guests will be able to make a reservation to book their future stay on the website and access contact information for either a Director of Sales or General Manager of the property.

Pegasus Hotel will request all requests for news stories regarding the development of the hotel, owner/developer information, opening dates, etc. By accommodating the press’ requests for stories, it will also be free advertising for the public to learn about the new up and coming luxury hotel.

Frank and Miles will invest in a billboard in downtown Austin where the mid to upper class of residents frequent. The hotel will be minimalistic but eye-catching. It will feature an attractive rendering of the hotel along with the website. Curious passersby will be directed to visit the hotel’s website for detailed information.

Third Party Booking Websites

Once the hotel is nearing 60 days towards opening, all of the third-party websites will feature Pegasus Hotel so that travelers visiting Austin will be able to see it listed as an option for Austin hotels.

Bridal Shows and Wedding Industry Events

Pegasus Hotel will have a table at all of Austin’s bridal shows and wedding industry events. It will attract those couples searching for a venue to accommodate their special day.

The pricing of Pegasus Hotel will be moderate and on par with competitors so customers feel they receive value when purchasing its guest rooms and services.

Operations Plan

The following will be the operations plan for Pegasus Hotel.

Operation Functions:

• Frank and Miles will be the owners of the hotel and hire the appropriate staff to manage the hotel. Frank will act as CFO of the hotel and Miles will be in charge of the reservation system and hotel operations software. Miles developed the software and will focus on making sure it’s always functional and efficient.
• General Manager will be hired to oversee the entire staff and hotel operations to include guest satisfaction, oversee vendor contracts, events, and making sure that each department is running effectively and efficiently.
• Assistant General Manager to assist the General Manager with overseeing the staff, with particular attention to guest satisfaction and front desk operations.
• Director of Sales will be hired to sell events, corporate accounts, and group bookings for the hotel.
• Maintenance Engineer will be hired to attend to all mechanical and plumbing issues that may arise.
• Executive Housekeeper will be hired to lead the team of housekeepers to make sure all areas of the hotel are being cleaned to Pegasus Hotel standards and that each guest is receiving all accommodations to their requested schedule.

Milestones:

Pegasus Hotel will have the following milestones completed in the next six months.

8/1/202X – Purchase land lot and break ground on new hotel business.

8/15/202X – Finalize architectural renderings and hire a General Contractor to build the hotel.

9/1/202X – Finalize contract with advertising company for them to design the branding image of the hotel, logo, website, billboard, and social media accounts.

9/15/202X – Begin social media and website advertising campaign. Billboard with a teaser of ‘Coming Soon’ will go up in downtown Austin.

10/5/202X – Hire General Manager and Director of Sales.

10/15/202X – Attend annual Wedding Industry Event with a table to begin advertising Pegasus Hotel.

11/1/202X – Pegasus Hotel will go live on third party booking websites.

11/15/202X – Remainder of staff will be hired to begin training program.

11/30/202X – Final walk-thru of newly constructed Pegasus Hotel.

12/15/202X – Begin furnishing and interior design of the hotel.

1/1/202X – Grand Opening of Pegasus Hotel.

Lorenzo will hire Lisa Montgomery as the Director of Sales and David Jimenez as the Assistant General Manager. After an exhaustive search, Lorenzo believes has found the next two senior management positions to ensure the success of the hotel. Each comes with an impressive resume of prior hotel sales and operational experience.

Lorenzo, Lisa, and David will be the senior management team of Pegasus Hotel. They will oversee all other department managers – Maintenance, Housekeeping, Front Desk/Guest Relations, and Food and Beverage. Each department manager will oversee various employees in their respective department and role. The Pegasus Hotel will have a large and sophisticated operation as each department is integral in the success of the hotel.

Lorenzo, Lisa, and David will meet with Frank and Miles monthly to update them on progress and overall operations and sales efforts of the Pegasus Hotel.

Financial Plan

Key revenue & costs.

The revenue drivers for Pegasus Hotel are the revenues it will collect when guests book a reservation at the hotel. The hotel will also collect revenues from its restaurant and bar, spa, and events it will host.

The cost drivers will be the payroll and overhead costs to staff the hotel. Other costs will involve the land lease, utilities, marketing costs, and technology fees. There will also be costs associated with the maintenance of the hotel, food and beverage inventory, spa inventory, and hotel guest room supplies.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Initial Number of Room Nights Sold per Month: 8,000
• Number of Events per Month: 30
• Land Lease per Year: $1,500,000

Financial Projections

Income statement, balance sheet, cash flow statement, hotel business plan faqs, what is a hotel business plan.

A hotel business plan is a plan to start and/or grow your hotel business. Among other things, it outlines your business concept, identifies your target customers, presents your hotel marketing plan and details your financial projections.

You can  easily complete your hotel business plan using our Hotel Business Plan Template here .

What Are the Main Types of Hotel Companies?

There are many types of hotel companies. Most hotels are affiliated with a hotel franchise company. Other hotel companies distinguish themselves by star level-  4 to 5-star hotels are on the higher end of rate and amenity offerings, whereas 2 to 3-star hotels cater more towards the everyday business travelers and families.

What Are the Main Sources of Revenue and Expenses for a Hotel Business?

The primary source of revenue for a hotel business are the room fees it charges each guest to stay at the hotel. Revenues are also collected for different amenity offerings, such as room service,  restaurant and bar revenue, spa revenues, and guest shop revenue.

The key expenses for a hotel business are the costs for inventory, maintenance, supplies, furniture, fixtures, and equipment, technology, and payroll of the staff. Other expenses will be the rent, utilities, and overhead costs, if applicable.

How Do You Secure Funding For Your Hotel?

Hotel businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Angel investors and other types of capital-raising such as crowdfunding  are other common funding sources. This is true for a business plan for a hotel, a resort or a boutique hotel.

What are the Steps To Start a Hotel Business?

Starting a hotel business can be an exciting endeavor. Having a detailed roadmap of the steps to start a business will help you stay focused on your business goals and get started faster.

• Develop A Hotel Business Plan - The first step in starting a business is to create a comprehensive business plan that outlines all aspects of the venture. This includes market research to identify the potential market size and target audience , the hotel’s services, pricing strategies and a detailed financial forecast.  
• Choose Your Legal Structure - It's important to select an appropriate legal entity for your hotel business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your hotel business is in compliance with local laws.
• Register Your Hotel Business - Once you have chosen a legal structure, the next step is to register your hotel business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 
• Identify Financing Options - It’s likely that you’ll need some capital to start your hotel business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 
• Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 
• Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 
• Acquire Necessary Hotel Equipment & Supplies - In order to start your hotel business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 
• Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your own hotel business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective digital marketing strategy including SEO and paid advertising . You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a new hotel business:

• How to Start a Hotel Business

Where Can I Get an Example Hotel Business Plan PDF?

You can download our example hotel business plan PDF template here . This is a business plan template you can use in PDF format.

Other Helpful Business Plan Templates

Franchise Business Plan Template Resort Business Plan Template Bed and Breakfast Business Plan Template

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The Ultimate Guide To Hotel Renovations: Everything You Need To Know

Keeping a hotel up-to-date and fresh is essential in the highly competitive hospitality industry. A well-executed renovation can breathe new life into a property, attracting new guests while retaining loyal ones. However, planning and carrying out hotel renovations can be a complex task. This guide aims to shed light on every aspect of the process, from the initial assessment to post-renovation considerations.

Introduction

The world of hotel renovations can be intricate and multifaceted. It’s a realm where careful planning, astute management, and creativity intersect. But before we dive into the intricacies of hotel renovations, it’s imperative to understand its importance.

Importance Of Hotel Renovations

Hotel renovations are more than just cosmetic enhancements; they’re strategic investments aimed at enhancing visitor experience, keeping up with industry trends, and boosting the property and brand’s value. They help hotels stay relevant in an ever-evolving market, ensuring that facilities meet contemporary expectations, both aesthetically and functionally.

On average, hotel renovations cost approximately $50,000 to $150,000 per room , depending on factors such as the extent of upgrades, location, and the level of luxury desired.

Preparing For Hotel Renovations

Effective preparation for hotel renovations can significantly impact the entire project’s success. It involves assessing the need for various hotel renovation ideas, identifying areas needing improvement, and setting a budget and timeline.

1. Assessing The Need For Renovations

Before diving into renovations, it’s crucial to conduct a thorough assessment of the hotel’s condition and identify areas requiring improvement.

Evaluating The Condition Of The Hotel

A comprehensive evaluation can reveal signs of wear and tear, outdated designs, or a lack of modern amenities. This process should also uncover safety hazards that need to be addressed.

Identifying Areas That Need Improvement

Once the general state of the hotel properties has been evaluated, the next step is to pinpoint areas that need improvement. This could include guest rooms, public spaces like lobbies lobby bar and dining areas, and even operational facilities such as kitchens or maintenance rooms.

Setting A Budget And Timeline

Setting an accurate budget and a realistic timeline can help avoid unexpected costs and delays. This involves estimating the cost of materials, labor, permits, and contingency funds for unexpected expenses. The timeline should account for planning, execution, and cleanup stages.

The typical duration of a hotel renovation project ranges from 6 to 12 months , emphasizing the need for meticulous planning to minimize disruptions to guest services.

2. Planning The Renovation Project

With a clear understanding of what needs to be done, the next stage of extensive renovation involves detailed planning. This includes hiring professionals, obtaining necessary permits, and crafting a comprehensive renovation plan.

Hiring An Architect Or Designer

A seasoned architect or designer can bring invaluable expertise to your project. They can help create designs that are practical, aesthetically pleasing, and in line with your brand’s identity.

Obtaining Necessary Permits And Approvals

Before commencing any construction work, it’s crucial to secure all necessary permits and approvals. This may involve liaising with local authorities, building inspectors, and fire departments.

Creating A Detailed Renovation Plan

A well-thought-out renovation plan should outline every action required to achieve the renovation goals. It should detail the scope of work, assign responsibilities, and set milestones for progress tracking.

Studies show that hotels undergoing renovations experience an average increase in revenue per available room (RevPAR) of 10% to 20% post-renovation , demonstrating the positive impact on profitability.

Executing The Renovation Project

Execution is where plans take shape. This stage involves managing contractors and suppliers, ensuring safety during renovations, meeting space, and minimizing disruptions to guests.

1. Managing Contractors And Suppliers

Effective management of contractors and suppliers can significantly impact the project’s timeline and budget. It’s essential to maintain open communication, ensure that everyone understands their roles, and track progress against the plan regularly.

2. Ensuring Safety During Renovations

Safety should never be compromised during renovations. It is critical to implement safety measures such as proper signage, secure construction zones, and regular safety briefing sessions for all personnel involved in the project.

3. Minimizing Disruptions To Guests

While renovations are necessary, it’s essential to minimize disruptions to guests. Strategies may include scheduling noisy work during off-peak hours, using desk staff, offering alternative amenities, or even temporarily closing doors to parts of the hotel.

Sustainable practices are becoming increasingly popular in the hotel industry, with 45% of renovated hotels incorporating eco-friendly features, contributing to a more environmentally conscious hospitality sector.

Renovating Different Areas Of The Hotel

Different areas of a hotel room require different renovation strategies. Let’s explore what this entails for lobbies, guest rooms, and dining and entertainment spaces.

1. Lobby And Reception Area

The lobby and reception area create the first impression for guests, making their renovation crucial. This can entail updating décor and furniture, enhancing lighting and acoustics, new amenities, and improving signage.

Updating The Décor And Furniture

Refreshing the décor and a new furniture that can transform the ambiance of the restaurant in the lobby. Choosing the right color palette, materials, and designs can create a welcoming and comfortable environment for guests.

Enhancing Lighting And Acoustics

Lighting and acoustics play a significant role in shaping a space’s ambiance. Proper lighting can accentuate architectural details and create a warm, inviting atmosphere, while good acoustics ensure a pleasant, noise-free environment.

Improving Signage And Wayfinding

Clear signage and wayfinding elements not only aid navigation but also improve the overall guest experience. They should be visually consistent with the hotel or fitness center’s aesthetic style and easily visible.

Guest and brand satisfaction surveys reveal that hotels investing in technology upgrades during renovations see a significant boost in customer ratings, with some brands with a notable 25% increase in positive reviews.

2. Guest Rooms

The guest rooms are where the hotel brands’ visitors spend most of their time, making them a critical focus of renovation efforts. This could involve refreshing bedding and linens, upgrading bathroom facilities, and enhancing in-room technology.

Refreshing The Bedding And Linens

Quality bedding and linens can significantly impact guests’ comfort. Opting for high-quality materials and contemporary designs can enhance the aesthetic appeal of the room and ensure a restful sleep experience.

Upgrading The Bathroom Facilities

Modern, well-equipped bathrooms are a must for today’s discerning travelers. Upgrades to guest bathrooms may include installing new fixtures, improving lighting, or adding luxurious touches like spa-grade toiletries.

Enhancing In-Room Technology

In this digital age, guestsexpect advanced technology in their hotel rooms. Renovations of suites can include adding smart features like automated lighting and temperature controls, USB charging ports, and high-speed internet access.

3. Dining And Entertainment Spaces

Dining and entertainment spaces are key areas that contribute to a memorable guest experience. Renovations here at resorts may involve revamping restaurants and bars, upgrading event and meeting spaces and conference rooms, and enhancing recreational facilities.

Renovating Restaurants And Bars

Restaurants and bars should be inviting and reflect the hotel or resort’s overall ambiance. Renovations can include updating furniture, refreshing décor, and upgrading kitchen equipment to accommodate modern guests and changing culinary trends.

Revamping Event And Conference Rooms

Event and conference rooms need to be versatile, functional, and aesthetically pleasing. Renovations of event space may involve reconfiguring spaces, upgrading audiovisual equipment, and optimizing layouts to cater to different types of events.

Upgrading Recreational Facilities

Hotels with recreational facilities such as pools, gyms, or spas should ensure they are well-maintained and meet guests’ expectations. Renovations might include updating equipment, enhancing amenities, and creating inviting spaces for relaxation and leisure.

Safety considerations are paramount during hotel renovations, and it’s essential to note that the average number of reported accidents during such projects is around 1.5 incidents per 1,000 hours of construction work.

Post-Renovation Considerations

Once the renovations are complete, there are still important steps to take to ensure the success and longevity of the project.

1. Marketing And Promoting The Renovated Hotel

Marketing the renovated boutique hotel is crucial to attract new guests and business, and inform loyal ones about the improvements. This can involve updating the hotel’s website and social media profiles, showcasing before-and-after photos, and implementing targeted marketing campaigns.

2. Collecting Feedback From Guests

Guest feedback is invaluable for understanding how the renovations are being received and identifying areas that may still need attention. Implementing guest surveys, monitoring online reviews, and encouraging direct feedback giving guests can provide valuable insights for ongoing improvements.

3. Conducting Regular Maintenance And Upkeep

Maintaining the renovated hotel is essential to preserve its condition and ensure a positive guest experience in the long term. Regular maintenance should include routine inspections, addressing any issues promptly, and implementing preventive measures to avoid future problems.

Renovation financing is a critical aspect, and hotels typically allocate 3% to 7% of their total asset value for renovation projects, ensuring a balance between maintaining competitiveness and prudent financial management.

Final Thoughts

Hotel renovations are complex undertakings that require careful planning, management, and attention to detail. However, when done right, they can breathe new life into a property, enhance guest experience, and boost a hotel’s competitive edge. By following the steps outlined in this guide and considering the unique needs of different areas within a hotel, owners and operators can navigate the renovation process with confidence.

Last Updated on November 17, 2023 by Parina

Parina Parmar is a full-time dog mom with a knack for content, editing & advertising. She has years of experience in the communication industry, and her dedication to maintaining the integrity of the author's voice while ensuring clarity and coherence in the text sets her apart in her field. She is dedicated to immersing her love for culture, music, and the advertising industry in her works.

• Bachelors in Journalism and Mass Communication
• Specialization in SEO, Editing, Digital Strategy, Content Writing & Video Strategy

Certifications/Qualifications

• Diploma in Fashion Desgining
• Performance Marketing by Young Urban Project

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Strategic Hotel Renovations for ROI and Guest Satisfaction

Embarking on the journey of hotel renovations is more than just a facelift—it’s a strategic investment that can elevate guest satisfaction and drive substantial return on investment (ROI).

In this blog, we explore the transformative power of strategic hotel renovations, delving into how thoughtful upgrades can not only enhance the overall guest experience but also serve as a catalyst for maximising profitability.

Join us as we unravel the key considerations and effective strategies for ensuring that your hotel renovation meets aesthetic expectations while aligning seamlessly with your business goals.

The Importance of a Robust Business Plan

A business plan is not merely a document; it’s the bedrock upon which any renovation project is built. It meticulously delineates the owner’s vision, objectives, and strategies for the renovation, serving as a roadmap that guides every decision and action.

A well-crafted business plan is a powerful tool that can unearth opportunities to explore new, underserved markets and establish a competitive edge against key rivals. It can illuminate paths to growth and diversification that may otherwise remain hidden.

Hotel business plan example

A hotel strategically situated near a convention centre could contemplate refurbishing its conference rooms. This move would cater to business travellers and event organisers while effectively enhancing its appeal as a premier meeting venue.

Moreover, the same hotel might weigh the benefits of incorporating leisure facilities, such as a swimming pool or spa. These additions could serve dual purposes: they could be used for events, thereby expanding the hotel’s service offerings, and they could attract a new demographic – the leisure market.

Short Term vs Long Term Hotel Business Plans

Hotel operators typically formulate annual business plans. These short-term action blueprints detail the specific tasks, milestones, and steps that your business intends to undertake over the forthcoming twelve months or so, driving your business forward with precision and purpose.

Conversely, long-term strategic plans cast an eye on the distant horizon, outlining your broad strategies for growth. They provide a panoramic view of how the business will reach its objectives, typically spanning a 3–5-year timeline, and occasionally even longer.

Longer-term plans can be bigger, bolder, and more fruitful for your hotel business. You can develop a clear, deep strategic vision, optimise capital expenditure through an asset manager , and unlock real potential with investment growth.

Market Analysis: Components of an Effective Plan

A comprehensive business plan should also analyse key options and scenarios, as well as the current market. This analysis is crucial as it informs decisions, guides the renovation process, and helps ensure that the renovated property meets the needs and preferences of its target customers.

Consider the Owner’s Investment Strategy

Before any market analyses or renovation plans happen, we need to consider the owner’s investment strategy to create an effective business plan. This includes the required ROI and investment horizon.

An owner with a short-term investment horizon might focus on quick, cosmetic upgrades that can boost the property’s appeal and value, while an owner with a long-term investment horizon might invest in extensive renovations that can drive sustained growth over time.

Identify Target Customers

Now it’s time to identify the key target customers. These are the individuals who are most likely to stay at the hotel after the renovation. For instance, if a hotel is located near a convention centre, the key target customers might be business travellers and event organisers.

Understanding who your customers are, their needs, preferences, and behaviours, is crucial for making informed decisions about renovations. This information can be gathered through market research, customer surveys, and data analysis.

Assess the Current Market Position

The next step is to assess whether the hotel currently serves its target market effectively. This involves analysing customer feedback, occupancy rates, and other relevant data. Identify any gaps in customer experience satisfaction and address them in the renovation plan.

For example, if the target market is business travellers, does the hotel offer high-speed internet, comfortable workspaces, and convenient business services? On a larger scale, if the target customers are couples and empty-nesters, a spa or wellness centre could be considered.

Explore New Market Opportunities

In addition to serving the current market, it’s important to explore new market opportunities. These could be under-serviced markets that the hotel can tap into with a new or revitalised product.

For example, if there is a growing demand for eco-friendly accommodations in the area, the hotel might consider incorporating green technologies and practices in the renovation. This could involve identifying underserved markets, emerging trends, or changes in customer behaviour.

Evaluate Hotel Class

It’s beneficial to evaluate whether the hotel is in the right class or if it could be better after the renovation. This involves comparing the hotel with its competitors and assessing its unique selling points.

If the hotel has the potential to offer a superior product or service, the owner might consider elevating it into a higher-yielding class through renovation.

Conduct a Thorough Financial Analysis

Finally, and perhaps most importantly, is the financial analysis. This critical component of a hotel business plan provides a quantitative evaluation of the potential return on investment from different renovation scenarios. This could include:

• The ‘do nothing’ scenario: What happens to RevPAR and overall profitability if no renovations are made? This provides a baseline for comparison with other scenarios.
• Minimal capex scenario: What is the potential return if only minimal capital expenditures are made to maintain the asset for RevPAR growth?
• Significant capex scenario: What is the potential return if significant capital is invested to achieve structural re-positioning against the current competitive set or an elevated competitive set?

By conducting a thorough financial analysis, owners can make informed decisions about the scale and scope of the renovations, ensuring they align with their overall investment strategy and business objectives.

Designers: Creating a Strategic Vision Alignment

A pivotal element in any hotel business plan for renovations must be to create and maintain clear strategic vision alignment between the owner and the designer. You want to aim for a collaborative approach to development for optimal success.

Designers bring invaluable expertise in aesthetics, functionality, and the latest trends, shaping the look and feel of the renovated property. Their input can transform a space, making it more appealing to guests and potentially driving revenue per available room (RevPAR) growth.

While designers of course bring valuable insights and ideas, hotel owners must maintain a clear focus on their strategic objectives throughout the renovation process. Design decisions should not be made in isolation but should align with the broader business strategy and vision.

For instance, designers might suggest improvements that could enhance the current product offering and achieve linear RevPAR growth . This could include updating room decor to reflect the latest trends, improving the layout of public spaces to enhance guest flow, or upgrading amenities to meet current guest expectations.

While these improvements can boost the hotel’s appeal and performance, they represent an evolution of the existing offering rather than a significant shift. This is what is meant by ‘linear RevPAR growth’ – it’s about making better what is already there.

By balancing the expertise of designers with a clear understanding of their strategic objectives and market opportunities, owners can make informed decisions that maximise the return on their renovation investment.

The Power of Branding and the Art of Rebranding

Renovations aren’t only about brick-and-mortar revamps. When we discuss hotel renovation strategies, and particularly when we give hotel business plan examples, one element that sometimes comes as a surprise is branding .

Branding (or rebranding, as we’ll get to soon) is another kind of renovation that can significantly affect guest experience and ROI. In the competitive landscape of the hotel industry, branding is not just a tool, but a potent weapon. A robust brand doesn’t merely draw in loyal customers; it also allows for commanding premium room rates.

How Can a Rebrand Improve a Hotel?

During a renovation, you should determine whether the existing branding resonates with the property’s target market and positioning. In certain scenarios, a rebrand might be the key to unlocking new customer segments and driving superior returns.

This could necessitate a comprehensive revamp of the hotel’s visual identity, encompassing elements like its logo, colour scheme, and interior decor. It could also mean redefining the hotel’s mission, values, and unique selling propositions.

While not easy to do, a successful hotel rebrand can infuse a fresh lease of life into a business, enhancing its appeal to its target customers and distinguishing it from its competitors. If you’re considering rebranding, whether it’s a subtle refresh or a radical overhaul, we recommend seeking the services and guidance of a marketing agency that specialises in the hospitality industry.

Unlock the Power of Strategic Planning With Axsia HTL

A well-crafted business plan is incredibly effective at honing the owner’s focus and narrowing down the brief for the designer, project manager, and potential lenders.

By adopting a strategic approach to planning and executing hotel renovations, owners can maximise their return on investment and pave the way for the long-term success of their property.

If you’re interested in elevating your hotel business plan and striking gold on your ROI with targeted renovations, reach out to us at Axsia . Our expert team can create a comprehensive business plan that ticks all the boxes and exceeds your expectations in a range of diverse areas.

Interested to see more? Check out our portfolio of major project developments to get a feel for how Axsia HTL can elevate your hotel business.

David Fraser

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Hotel Business Plan

OK, so you have decided to realize your dream and become a hotel entrepreneur, so now you need to start writing your hotel business plan . You have thought out an amazing concept delivering unparalleled guest service. The next step would be to write a hotel business plan. It’s like a road map to the opening. However, as a seasoned hotel revenue management consulting and hotel management company , we have seen that this is where most entrepreneurs get stuck.

Why? Many do not have the time and don’t know what to write or how to do the financials. But until you finish your business plan, you will not be able to get the financing either. So you end up with ideas sitting in your head not realizing your dream.

Really it is not that difficult to make a good hotel business plan. It is merely a structured summary of your idea. Most people try to include everything about their hotel concept in the plan. This leads to an indigestible super novel-like bookwork, aka a mess.

The key is, knowing what to include, and what not to include in your hotel business plan. Create a clear road map for success. Excite investors rather than bore them to death like most business plans full of redundant information do. And you need to lead readers down the exact path you want.

One of the main challenges for example is that after reading the first page most businesses often don’t fully understand what the hotel is all about. For investors and lenders, it is crucial they can quickly comprehend your plan, without reading the whole document.

Hotels 101: The Basics of Business Planning

We have put together a hotel business plan template to help you on your way. Check out our approach based on 10 critical points, being:

• Executive Summary
• Company Analysis
• Industry Analysis
• Customer Analysis
• Competitive Analysis
• Strategic Plan
• Operations Plan
• Management Team
• Financial Plan
• Key Milestones

Steps of your Hotel Business Plan

Let’s dive into the step-by-step checklist of what your hotel business plan should look like.

Infographic by Xotels

1. Executive Summary

This first part should consist of two main parts, being:

• Mission Statement (Introduction): a 1 line company description only the essence of your hotel (not 2 lines or a paragraph). It explains why you are in business or which huge need you are solving, that currently is not being met. For example in the case of Qbic Hotels “Moving modular hotels into under-utilized real-estate to reduce build-out cost and time.” 
• Objectives : What do you hope to accomplish (i.e. “Reach an annual occupancy of 90%”).

 2. Company Analysis

More detailed information on the USPs (unique selling points) of your hotel concept.

3. Industry Analysis

Information on the current industry trends and the current state of the market and how this will impact your hotel. This is needed as investors want to be sure you really understand the hotel industry. This acts as the foundation on which decisions such as trends and developments to follow will be based.  

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4. Customer Analysis

In-depth information on your target market, including geographic, demographic, socioeconomic, psychographic, and behavioural segmentation details. It can also help you to keep up to date with the latest hotel marketing trends to understand which are the types of guests who will be staying at your hotel. Explain which features will be meeting the needs and wants of these main segments when thinking of:

Basically, how will consumers answer this question ‘Why my hotel?’

Aim to break it up to the point value can be easily communicated (do not make it too overcomplicated). Think of the following examples:

• Psychographics: interests, lifestyles, personality, values, opinions, and attitudes
• Behavioural segmentation: purchasing behaviour, level of engagement, customer loyalty
• Demographics: gender, age, marital status and education
• Geographics: location (country, state, region, city)
• Socio-economics

Any of the above examples of hotel segmentation can, if described well, be of great value to your business plan. An example of this could be a hotel located in a beach town, where you should be able to describe how demographics and psychographics differ from summer to winter time. Especially, since this example is typically known for lower demand in winter which you could be compensating for with the right hotel marketing strategies on hand.

5. Competitive Analysis

A study of your local competition or global concept competitors, with each of their strengths, weaknesses, occupancy rates and market share ( SWOT analysis ). And don’t forget the most important part; what differentiates you from them. What makes you stand out?

Ask yourself: “can I add value to a specific area”, especially when it comes to hotel-dense areas like city centres or major destinations.

6. Strategic Plan

This exists of 3 parts:

• Marketing : How exactly will you attract customers/guests? How will you position yourself? What will your message be to the different segments of your business mix? How will your direct marketing work? What will be the plan for your hotel website, SEO, SEM and SMM? Will you do offline promotion? In short, your hotel marketing strategy should cover everything there is to know about how to market your hotel.
• Distribution : Which 3rd party channels will you use and how will you manage availability? What technology will you need?
• Revenue management : What pricing and yield techniques will you use? What will your payment and cancellation policies be? Which room types will you be selling, and how will they be individually marketed? How many revenue scenarios will I create? Where can I compensate income/demand streams when necessary?

Make sure you have the capabilities to plan out a strong marketing, distribution and revenue management strategy. 

Things get complicated rather fast, and choosing to outsource hotel and revenue management is likely to give you a strategic advantage, during the planning phase, and the execution of your business plans.

7. Operations Plan

How will you run your hotel? Think of the following elements:

• How many staff and supervisors will you need? 
• What are their job descriptions/responsibilities? 
• What background and experience should they have? 
• When should they start? 
• What are your service standards?
• Will you develop manuals?
• Which supplier will you use?
• How will you manage inventory?

8. Management Team

Include the bios of your team. Focus on what uniquely qualifies you to make your hotel such a success. Having a great team is the key to success , and stakeholders will be impressed with a thorough explanation of the added value everyone brings to the table.

9. Financial Plan

Provide the start-up costs of the hotel (capital investment), the ongoing business costs, operational expenses and revenue projections for the next five years. These figures should be always based on your Hotel Feasibility Study . The KPIs to look at include expected occupancy, ADR (Average Daily Rate) and RevPAR (Revenue per Available Room).

If you are raising money , outline how much funding will be needed and when. Explain how you will generate a return on investment for investors, or when lenders will be paid back.

10. Key Milestones

These are the most important achievements which once they have been completed, will make your hotel more likely to succeed. Think off:

• Location selection
• Permits & Licenses
• Build-out / Construction of the Hotel
• Staffing and Training
• GOP Break-even
• NOI Break-even

Each time one of the key milestones is achieved, the risk of lenders or investors decreases . And once your last key milestone is reached, the chance of success is more or less guaranteed.

11. Appendix

Provide any other relevant information here. Don’t clutter the main sections of your hotel business plan with too many details. Rather support them with attachments in this part.

Putting Your Plan into Action

Many people have great business ideas. But that really doesn’t matter. The difference between dreamers and entrepreneurs is the action mindset. Are you ready to ship your idea to the market? 

The first step is to put your ideas on paper. I hope this free sample will help you write a persuasive hotel business plan. Because no investor or lender will be interested if you cannot present a clear plan.

Follow your dreams and go for it!

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Need help to Develop and Manage your Hotel Concept?

Our revenue management consulting experts at XOTELS have helped hundreds of hotels to develop and optimize their businesses.

With cost-effective implementations and best practices developed over years of experience, successful business for your boutique hotel, resort, B&B, aparthotel, hostel, or any other lodging concept for that matter.

Hope this template has helped you get inspired to start your own hotel business .

Best of luck in your endeavours!

Patrick Landman

PS. Get in touch with us if you need help developing and managing your hotel concept, and help bring your hotel to the next level with our hotel consulting services.

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From idea to execution: 10 sections to include in your hotel business plan

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By Lana Cook

Do you love connecting with people from all over the world who share your passion for travel? Don’t want to work a typical 9-5 job and instead want to build a business where every day is different, and you own your schedule?

Starting a hotel business is a dream many entrepreneurs have, but it can be a daunting venture to start. A hotel business plan is a critical first step for business owners to turn their dreams into reality. A strategic plan allows one to study the hotel industry, identify their hotel’s unique point of view, and outline how exactly they will reach their goals.

Read on to learn more about the ten sections to include in your hotel business plan, tips for creating an effective plan, and key things you need to start your new hotel business.

Ready to get started creating your plan? Download our hotel business plan template.

What is a hotel business plan?

A hotel business plan is a detailed document that identifies your business’s goals, objectives, and strategies for success. It includes market research and a roadmap for building and operating your business.

Why do you need a hotel business plan?

Studies show that entrepreneurs who finished their business plan were twice as likely to succeed in growing their business than those with no plan. A hotel business plan:

• Helps you identify whether you have a viable business idea
• Provides a detailed roadmap on what you need to accomplish and why
• Gives potential investors insight into your business idea and confidence that you can be successful
• Keeps you on track as you start to execute the different tactics outlined in your plan
• Identifies critical milestones for you and your team to reach

Your plan does not have to be static and should change over time as your business grows and evolves. Your first draft is a starting point to help guide your strategy and instill confidence in potential investors.

10 sections to include in your hotel business plan

Whether you’re starting a small boutique hotel, a cozy B&B, or a 5-star resort, you will need to address the following sections in your hotel business plan.

1. Executive summary

An executive summary is the most essential part of your business plan. It should concisely explain the purpose of your business and why it will be a success.

Include your mission statement explaining why your hotel exists and its overall goal. For example, Capella Hotels & Resorts ’ mission is to combine tradition, discovery, individuality, and twist of the unexpected to create the perfect stay for each guest.

You should also include your vision statement that clearly describes your hotel’s purpose for being in a single sentence. For Capella Hotels, its vision is to embody excellence in the craft of hospitality.

We recommend writing your executive summary as the final stage, as it should summarize the goals and objectives laid out in your plan.

2. Company analysis

Your company analysis is where you can dive into your hotel’s competitive advantage. Ask yourself what makes your hotel unique . Why would guests want to stay with you instead of your competitors?

In this section, identify your brand’s identity and the goals and objectives you want to accomplish. Outline how many rooms and room categories your property will have. For example, will you offer a hybrid hospitality model with dorms, single rooms, and suites? Explain what ancillary revenue sources you’ll offer, like in-room food and beverage options, welcome drinks, or airport shuttles.

Use storytelling to communicate your excitement and passion and make it clear what your hotel will bring to the hospitality industry that hasn’t been done before.

3. Industry analysis

As a business owner, you must be prepared for forces outside your control. You will need to conduct a market analysis that looks at the hospitality industry to identify micro and macro trends that may impact your business. Look at:

• Economic trends
• Environmental trends
• Political trends
• Global health trends
• Technology trends

For each trend, identify how it will impact your business and ways to mitigate risk or take advantage of opportunities.

For example, digital check-in technology has increased across the hotel industry with the rise of tech-savvy guests, new innovative software providers, and labor challenges. Therefore, consider what guest experience solution you’ll include at your hotel.

In addition to trends, look at the history of the hospitality industry, its current size, and how it’s expected to grow in the short and long term. This research will impact the rest of your plan, especially your marketing and financials.

4. Customer analysis

What type of hotel guests do you want to attract? It’s impossible to please every kind of guest, which is why it’s important to identify your target market . Once you know who you want to stay at your property, you can develop amenities, services, and marketing materials to attract these guests and deliver exceptional experiences .

Ask yourself:

• What type of guests do I want? Business or leisure travelers? Retirees or Gen-Z?
• What demographics? Age, gender, marital status, etc.
• What are my target market’s interests? Water sports, hiking, relaxation, museums, etc.
• What does my target market value? Sustainability, contactless technology, personalized service, localized experiences, etc.

This section will help you formulate the guest experience to ensure that expectations meet reality .

5. Competitive analysis

The competition you face will vary depending on where your hotel is located. In this section, you should conduct in-depth competitor research to understand how your hotel will compare. Identify your five major competitors — ideally, three direct competitors you will be competing with upon opening and two aspirational competitors you can emulate as you grow your business.

Conduct a SWOT analysis based on your competitors to look at:

• Strengths . Where does your property excel in comparison to competitors? Why would travelers pick you? Price, amenities, location, technology, etc.
• Weaknesses . Where does your property fall short in comparison to competitors? Price, amenities, location, technology, etc.
• Opportunities . What industry trends can you take advantage of? What local events or partnerships can you capitalize on?
• Threats . What are the biggest threats facing your property? War, travel restrictions, recession, etc.

A thorough analysis can help solidify your competitive advantage and develop a contingency plan for how you will deal with your weaknesses and threats.

6. Marketing plan

Without demand, there is no business. A hotel marketing plan outlines the channels you’ll use to reach your target audience to drive bookings. Your marketing strategy should include three key channels:

1) Paid media . Paid advertising to promote your property and drive bookings. This includes online travel agencies (OTAs) , search engine marketing (SEM), retargeting, and metasearch advertising.

2) Owned media. The content  you create, like your hotel website , social media channels, blog posts, and SEO.

3) Earned media. User-generated content created by third parties like media coverage or online reviews.

7. Operations plan

How do you plan to run your day-to-day operations? This section of your plan will outline all of the key tasks and responsibilities of your team and what exactly your hotel will offer. Consider:

• The number of staff and supervisors required
• Job descriptions and responsibilities
• Your service standards (check out our downloadable SOPs for some inspiration)
• How you’ll manage your inventory
• What hotel technology solutions will you need? PMS, channel manager, booking engine, payment terminal, revenue management tools, guest engagement software, etc.
• What services and amenities do you want to offer? Room service, bar, restaurant, pool, spa, wellness center, etc. 

Detail your short and long-term operational plans and the stakeholders involved for each area.

8. Management team

Whether or not you’ve hired your team yet, this is one of the most important sections potential investors will look at. Make sure to outline the key personnel you will require and their roles. 

In general, these are the following roles you’ll want to outline:

• Hotel management (general manager, front office manager, housekeeping manager, maintenance manager, revenue manager)
• Hotel sales team
• Housekeeping staff
• Front office staff
• Maintenance

Depending on the size of your hotel, your team will vary. Identify the team members you need to open and your hiring plans over the next five years.

9. Strategic plan

Hoteliers must be strategic in optimizing occupancy rates across seasons to maintain revenue. As part of your strategic plan, identify how you will manage:

• Pricing – what room types will you offer, and how will the pricing vary?
• How will you maintain consistent occupancy throughout the high and low seasons? Will you adapt your pricing and marketing strategies?
• How will you conduct revenue management ? What type of rules/alerts will you use to adjust rates? Will you use technology to help with revenue management?
• What will your online reputation management strategy be? How will you collect and respond to online reviews?
• What will your distribution mix look like? How will you drive reservations across a variety of channels?

10. Financial plan

Your financial projections are the most challenging but arguably the most crucial part of your hotel business plan. In this section, you should include the following:

• Start-up costs. How much money will you need from lenders to operate your hotel? Consider business licenses, furniture, down payments, etc.
• Operating costs . How much money will you need to keep your business running? Consider staffing costs, guest acquisition costs, mortgage payments, utilities, SaaS payments, etc.
• Income statement . What will your revenue, expenses, and profit be over the first 3-5 years of business?
• Cash flow projections . How will cash flow in and out of your business? Show what capital investment you’ll need to start.
• Balance sheet . Identify your assets, liabilities, and equity.

If you’re looking for a potential investor, your financial plan will be the section they care about most. Here, you must prove how your business will provide a return on investment. Don’t forget to include an Appendix that shows more detailed reporting and financial figures.

8 tips for creating an effective plan

1. Start with the section that excites you the most! Covering all the topics outlined above can feel overwhelming, so don’t feel pressured to go in order.

2. Reach out to a business owner you admire. No matter what type of business you’re starting, getting advice from another business owner is always helpful. Reach out to a successful local business owner to see if they’d be willing to share some insights they learned along the way.

3. Be concise. While there’s a lot to cover, you must be concise in each section of your plan. Include any additional research or documentation in the appendix to keep your business plan clean.

4. Try to avoid industry jargon. Depending on what type of investor is reading your plan, they may find jargon irrelevant and distracting.

5. Ensure you have a clear competitive advantage. You should be able to state in one sentence what makes your property unique. This unique selling point (USP) will be prominent in all of your marketing materials.

6. Set SMART goals. Setting specific, measurable, achievable, relevant, and time-bound goals is important to stay organized and on track to reach milestones.

7. Don’t forget about your plan. You will have spent hours developing your plan, so make sure you use it! Reference your plan as you build and grow your business , and remember that it’s ok if things change.

8. Illustrate your passion. Communicate why you want to be a part of the hospitality industry. Passion is contagious and gives investors more confidence that you will work hard to achieve your dreams.

What do you need to start a hotel business?

Ok, so you’ve read through this article and are now wondering — what’s next? Ensure you have the following items on your radar to start your business.

• A vision. Know exactly what kind of business you want to build (a quaint bed and breakfast is very different from a large-scale resort).
• A business plan. Stay on track with a well-developed business plan.
• A location. Decide if you want to build a new property or renovate an existing hotel.
• Capital. Do you need to raise an upfront capital investment? Remember that new businesses usually aren’t profitable for the first few years and will need cash flow to pay for expenses.
• Business licenses & permits. Depending on the type of property and its services, you’ll need an occupancy permit, alcohol license, food service license, sales tax license, etc.
• Technology. Choose technology to help streamline operations and earn more revenue.
• Furniture & equipment. You must furnish your property with the proper furniture, electronics, appliances, etc.
• Staff. Take time hiring staff you can trust and who understand your hotel’s brand and vision.

Final thoughts

Your business plan provides the foundation for your new business and outlines the next steps in the journey. Ensure you fully understand the market and competitive landscape to enter the industry prepared for the future. Start slow and invest in the right people and technology to support the growth of your business.

Looking to start a hotel? Download the technology guide. Download now

About Lana Cook

Lana Cook is a Content Writer at Cloudbeds where she is able to combine her love of writing and passion for travel. She has spent the last few years writing about all things technology and the ways in which it can be used to help businesses thrive. When she’s not busy writing, you can find her checking out the latest movie or searching for a new TV show to binge.

Hotel business plan

You might also be interested in..., the beginner’s guide to hotel room price optimization, navigating hotel rfps: how to win more group business, a 2024 guide to hotel automation.

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Renovating a Hotel in 2022: Costs, Scheduling, & Tips

• June 7, 2022

It doesn’t get much more cutthroat than the hospitality industry, with hotels slashing prices and making expensive upgrades every few years just to keep up with the competition. Hoteliers absolutely must stay on top of their renovations if they wish to maintain a solid client base. Knowing what to fix and how to do it economically is what’ll be keeping your business in the black.

If you’re thinking about renovating a hotel though, you know how complex the process can be. You’ll be hiring contractors, consulting with suppliers, and determining a budget for each room that keeps the hotel profitable. That’s no easy task, and you’ll most likely need some help to keep everything on track. A knowledgeable hotel lender can guide you through the process; read on to learn how they can extend a helping hand and which lender might be right for you.

Hotel Renovation Costs

Renovating a hotel, even a boutique property with only a few rooms, is bound to be expensive. Depending on the type of business you run, hotel renovation costs anywhere between $2,000 to $20,000 per room. With limited funds to allocate, it’s important to focus on projects with maximum impact. These are a few of the more common costs associated with a hotel renovation. 

Construction

The most expensive projects encountered during a hotel renovation involve completely revamping the facility. This might include adding more rooms, a swimming pool, or demolishing the lobby to make way for something a little more modern. These renovations are the ones most likely to be noticed by potential customers and are what could bump your property up a star in quality. 

Updating a hotel’s decor is the key to success. Paint, artwork, and carpeting set the tone for a hotel’s customer experience. Bright colors and relaxing paintings are perfect for properties brimming with vacationing tourists while darker tones and a modern aesthetic will appeal to business travelers preoccupied with productivity. Additionally, what was in fashion 10 years ago can look horribly outdated today. 

Often overlooked in favor of flashier construction projects, soft goods like towels, bedding, and furniture can make all the difference for a hotel’s customer experience. Unfortunately, since these are items that get worn down from daily use, they’re something hotel owners need to replace on a fairly regular schedule.

Scheduling a Hotel Renovation

Knowing when to renovate is just as important as knowing what to renovate. Construction projects are detrimental to the customer experience so they should be scheduled when the fewest of them are around to be bothered by the noise and disturbances. These are a couple of things to keep in mind when scheduling your hotel renovations.

How often you renovate is a function of the cost of renovation vs. the cost of not renovating. Even the most budget-friendly hotel will need the soft goods swapped out every five years or so to stay competitive. Four and five-star hotels need to be renovated more frequently than two or three-star hotels as customers expect more contemporary decor and additional amenities. After three or four years, every year where amenities and decor aren’t updated is a year that the hotel is starting to decline.

In the hospitality industry, timing is everything. Before scheduling a hotel renovation, consult the hotel’s occupancy data. When are most rooms booked? Are there any special events that could interfere with the renovation? Always schedule renovations for when the hotel’s occupancy is lowest. Contractor availability is also highly seasonal, with home and business owners choosing to have work done in the spring and summer when the weather is favorable for construction projects.

Financing a Hotel Renovation

All those renovations come with a hefty price tag, and unless the hotel has a substantial rainy day fund, loans are an inevitability. Luckily, there are several options open to hotels financing a hotel renovation.

The Small Business Administration 504 loan is a great tool for hotel renovation and provides $5,000,000 in capital to qualified borrowers. Interest rates are below market value as loans are backed by the full faith and credit of the U.S. government. Hoteliers can use these loans to upgrade facilities and purchase new assets, but cannot be used for working capital. Apply here to learn how AVANA Capital can facilitate your SBA 504 loan.

A favorite amongst small and larger business owners, SBA 7(a) loans are available to businesses with fewer than 500 employees and less than $7,500,000 in annual revenue. These loans max out at $5,000,000 and need to be repaid in 10 years if used as working capital or to purchase equipment, or 20 years if purchasing real estate.

Online Lenders

These loans have the fastest turnaround time, usually less than three days. AVANA Capital provides a number of different loan types to hoteliers including SBA 504 loans, bridge loans , and conventional loans with some of the lowest interest rates available. AVANA Capital has helped to grow 41 different hotel brands in all 50 states. 

Property Assessed Clean Energy loans are an ideal financing option if your renovations are eco-friendly: efficient air conditioning upgrades, energy-saver lights, solar panel installation, etc. PACE loans usually have lower interest rates than alternative lenders but higher rates than traditional bank loans. 

AVANA Capital Can Help Your Hotel Stay Up To Date

If there’s one constant in the hospitality industry , it’s change. Hoteliers always need to be looking forward, understanding the latest trends, and anticipating the amenities their guests will be demanding in the next few years. 

AVANA Capital is here to help by financing a few of the hospitality industry’s most innovative projects . Though sometimes all it takes is some new carpet to keep the good reviews rolling in. We offer fast and reliable financing for hoteliers across the nation. With over 150 years of combined experience, you can trust us to help you secure the funding you need.

Our flexible solutions allow you to preserve working capital while renovating your property. Apply for a loan today and get started renovating your hotel. Connect with an expert to learn more about our loan products.

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Hotel Renovation Tips: The 4 Key Steps

Learn how to achieve a successful hotel renovation with reduced costs and ensure an immediate payback of your investment

Renovating an existing hotel can be a multilevel and challenging process that requires significant investment and time on the part of the hotelier. However, at the same time, it can also be a creative and enjoyable process. It marks a new beginning that will not only revitalize the business’s day-to-day operation but will also yield more significant profits.

A common occurrence in a renovation project is the lack of an integrated plan with clear, defined actions that would save both time and money. So, what are the necessary steps that a hotelier should follow when renovating a hotel?

This article analyzes the four critical stages of hotel renovation and shares some smart tips that will help you get the most out of your investment.

The Architect & Construction company selection comes before the key steps!

Morphó is a dynamic, up and coming company specializing in hotel renovations. It follows a one-stop shop approach to renovation and provides end to end solutions ranging from licensing to interior design as well as energy. So what are the benefits of using a one-stop company?

• The hotelier saves time and trouble. He has a single point of contact with whom makes all the arrangements. The communication process is therefore simplified, and the amount of supervision required is reduced.
• Delivery and completion times are more reliable. One-stop companies have existing networks of trusted partnerships and suppliers who stay true to time schedules and deliverables.
• There are considerable cost savings and better budget control. A centrally managed budget allows for tighter overall control of spending. What’s more, the company has exclusive deals with its suppliers meaning the hotelier benefits from better agreements.

Important: Make sure your chosen one-stop company has all the necessary skills and experience for your renovation project. Be aware of businesses who do not possess the right expertise in all the required fields.

For more information regarding the fields of expertise needed to renovate a hotel, contact Morphó’s consultants at [email protected]

Step 1. Preliminary Design: Assess the present situation not only at a Design level but also at Operation and Guest Satisfaction

Usually, the basic approach to renovating a hotel is aesthetically motivated and often omits essential factors that contribute to the effective remodelling of the overall hotel experience. Before refurbishing a hotel, it is important to assess the traveller’s overall experience to determine the points that need to be improved both aesthetically and functionally. Apart from aesthetics, we have to decide whether the existing design helps to satisfy the guests. After recording the negative and the positive points, we give clear directions to the architect and the interior designer for the best possible result.

Smart Tip: In this initial study, it’s important to study in depth the hotel’s operational aspect. Staff flow, for example, can significantly influence the feel and the functionality of hotel spaces. The purpose of a renovation, apart from the aesthetic renewal, is to increase the ease of service.

Step 2. The concept: Specify the new concept, facilities and revenue opportunities

Renovating a hotel is a unique opportunity for the property to take on a particular direction and to stand out from the competition. Evidently, the definition of the concept also affects the design identity and potentially the facilities that the hotel will want to include. These factors must be entirely taken into account by our architectural team. For example, a hotel that decides to focus on gastronomy inspired by local wine will also include decorative elements that refer to the concept as well as special facilities linked to wine, such as unique in-room cellars. All these elements can lead to increased revenue opportunities for the hotel.

Smart Tip: An integrated Concept & Operation Manual delivered by qualified Hospitality Experience Experts helps the chosen Architectural Office to provide a thorough architectural design, as it gives an insight into the accommodation philosophy and the integration of staff within it. The architectural firm works closely with similar consultants and having a sufficient brief can create a truly competitive product.

Step 3. Planning: Set up a credible project execution plan according to budget, material deliveries and construction process

Determining the budget is one of the most critical stages that define the success of a hotel renovation as it affects the entire execution process. When the architectural office has a clear knowledge of the overall renovation budget from the beginning, it can do better management, and allocate the money to those parts that would reinforce both the hotel concept and the facilities, and lead to increased profitability. For example, in a wellness-oriented hotel, the emphasis would be placed on creating an impressive Spa that would define the travellers’ experience, as well as on the ways that the traveller would be led to it — possibly with smart signage across the various accommodation areas.

Smart Tip: Knowing the renovation budget from the outset, we can make better negotiations with material & furniture suppliers, as we are aware of our investment’s “ceiling”. Also, as most materials and products are made to order, having the right budget can help us achieve punctual deliveries that significantly affect the project’s consistent completion.

Step 4. Communication: Use the construction period in the most effective way, to get the most out of your investment

As a hotel’s renovation budget is not at all insignificant, it requires an immediate communication strategy that will help in quicker payback. It is vital that the renovation process is “communicated” as a unique event. The upcoming property upgrade will create expectations for new target audiences and give competitive advantage in generating new bookings. It is also a unique opportunity to communicate with your old clients and through a smart campaign to create repeaters who will be more loyal to your renovated hotel.

Smart Tip: Ask your architectural office for high-quality 3D renders, and once you are sure about the exact time of completion, start a sales strategy at both B2B and B2C levels. Create impressive presentations and contact all the travel agents you are working with presenting your hotel’s updated design. It is also important to promote your new product through the various OTAs you are already using. Lastly, don’t forget to use the final renders on your main website and social media accounts. Update your “Upcoming” changes to whet the appetite of your target audiences and most likely your future bookings.

     *Sponsored

All the 3D renders used in the article are from  Morphó’s tourist projects in Greek destinations. Below is a rendered collection of Parian Boutique Hotel’s rooms in Paros.

Nikos S. Morantis

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Hotel Renovation Strategy – A Path to Success

Hotels are unique and diverse assets and each renovation project comprises of variable data and metrics that influence the decisions that need to be made.  There is no one size fits all, even among hotel brands or chain scales in the same location.  This ultimately means that hotel renovation models or cost guidelines give no more than a broad range as scope, methodology, as costs vary greatly with individual projects.

Stakeholder Engagement

Delivering a successful Hotel Renovation Project is about assembling the right team at the right time, with the right level of commitment, authority, and expertise to drive the process.

A Project Stakeholder is typically defined as, ‘anyone that can affect, or is affected by a project, because they are involved in the work, or are affected by the outcome’. 

In the context of this insight we will therefore consider, the Owner, or Investor, the Operator team, the Consultant team, and even the Contracting organisations, as integral to establishing the goals.  Metrics can be established and aligned with each of these parties.

Some project stakeholders will be required to produce or commit to metrics, whilst others will be required to input data on the practical aspects of the planned renovation works.  It is clear that a project can be instigated from various parties and for various assumed reasons, but one aspect remains constant throughout, and that is the alignment to the individual stakeholder’s needs and wants, and the return on the investment made.

It is important to define the stakeholders at the outset and to establish roles and responsibilities so that the requisite information gathering can be effective and relevant to the proposed project.  Remember the point is to get to the bottom of the issues and not simply guess a solution without being informed.

Stakeholder engagement is the interaction with, listening and understanding of the project stakeholder’s requirements to the overall benefit of the project.  The stakeholder’s view of a completed project usually determines the relative success of the project.  With a measured approach to the use of metrics, the stakeholder’s requirements are considered at the outset, therefore providing a measure for success.

Stakeholder Engagement differs from Stakeholder Management, which typically defines the systematic approach, planning and implementation designed to engage with the Stakeholders. 

Stakeholder engagement is not a standalone activity, it should be about a single focus on an end goal.  Good active stakeholder engagement also reduces disputes.

It is also important to engage with the supply chain at an early stage.  Getting advice from a contractor in terms of buildability or a condition survey will often uncover issues or drive efficiencies into the process.  One of the main issues with any renovation project is that everyone works hard to define the scope, align metrics, and then allows the market to define the cost of the work.  In this scenario, the dreaded, and so-called, value engineering (VE) process begins.  This is only about compromise, cost-cutting and delay, it has no relevance in the context of a well-defined strategy.

Value Management

The primary focus here is value maximisation, achieved by delivering effective and timely strategies. The earlier in the process that the key metrics and drivers are developed the greater the potential for added-value, reduced cost and time, increased returns and improved efficiency and functionality.

Value management consultancy is not value engineering, or cost-cutting, but adding real value into an asset from the start.  The cost-saving (value maximisation) potential is greatest at the outset, as you define strategy.  As you enter the tender and construction phases it is equally true that ‘value’ becomes cost-cutting.

Risk Management

The management of risk within a project is wider than simply the perceived threats or uncertainty to successful delivery.  Risk management is a mind-set to view the overall project and to ensure risks to time and cost are mitigated through a clear and concise delivery strategy, with a balanced view of the metrics. 

One of the defining elements of any project is uncertainty.  The amount of risk increases with the amount of uncertainty, and uncertainty is inherent in all renovation projects.  Risk management processes are therefore utilised in the prediction, identification and mitigation of risks which will increase the likelihood of a successful project by protecting the metric and budget targets.

Risk management should start as soon as a project has been initiated. The greatest opportunity for managing risks is in the early stages of a project. If the project is impacted due to a risk occurrence the impacts to budget and schedule can be extremely costly.

The risk management process begins with the evaluation of risks through the assessment of the project objectives, scope, design documents, experience on projects of a similar nature as well as preliminary budgets and schedules.  A thorough list of potential project risks should be generated. If these can be identified a greater potential for project success is likely.

Once risks are identified they need to be included in a risk register or risk matrix for further evaluation. Each potential risk undergoes an assessment of prioritisation and is then evaluated by a qualitative assessment with those risks that have the greatest potential for project impact undergoing a quantitative analysis. 

Once risks have been identified, risk triggers and individuals responsible for monitoring their assigned risks need to be aligned.

Phasing Strategy

The phasing of the work needs to be considered with a view to the proposed scope of the works and the hotel's occupancy.  Phasing has a two-fold impact.  The renovation in any given year should be designed to have the rooms in service as early as possible to maximize the potential revenue, however, the work also needs to consider revenue protection during the works so as not to risk losing further revenue and affecting the guest experience.

Phasing is wholly dependent on strategy, scope, and occupancy levels for each individual project.

The overall success of the renovation strategy will be borne out through the avoidance of delays and compromise, which are often instigated through value engineering exercises and projected cost overruns before projects have even started.  

About the author:  Paul Boldy , RLA Global Middle East  Managing Director 

Paul has worked across the Middle East and Africa for the past 16 years, representing operators, owners and developers with feasibility studies, technical and design services, renovation, and improvement plans and operational consulting services for various hospitality and leisure assets.    A thought leader in the Hospitality Sector, Paul has helped shape Hotel projects across all stages, from development to design and through pre-opening to operation, representing the full life cycle of the hotel asset with dynamic results.

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Sample Hotel Business Plan

Writing a business plan is a crucial step in starting a hotel. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring hotel owners, having access to a sample hotel business plan can be especially helpful in providing direction and gaining insight into how to draft their own hotel business plan.

Download our Ultimate Hotel Business Plan Template

Having a thorough business plan in place is critical for any successful hotel venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A hotel business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The hotel business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your hotel as Growthink’s Ultimate Hotel Business Plan Template , but it can help you write a hotel business plan of your own.

Hotel Business Plan Example – StaySerenity Inn

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

StaySerenity Inn is an innovative hospitality venture located in the heart of Tucson, Arizona, dedicated to providing guests with a tranquil and serene stay experience. Our mission is to offer high-quality accommodations that blend modern comforts with the unique charm and beauty of the Southwest. We aim to cater to a wide array of guests, from business travelers to families seeking a peaceful retreat. By prioritizing customer satisfaction and leveraging the picturesque landscape and cultural richness of Tucson, we are committed to becoming a leading choice for travelers seeking comfort, peace, and a touch of local flavor in their accommodations.

Our success is built on a foundation of identifying and capitalizing on key factors that set us apart in the competitive hospitality market. To date, we have made significant strides in establishing a strong brand identity, highlighted by our commitment to exceptional customer service and creating a serene guest experience. Our strategic location, which combines accessibility with scenic beauty, plays a crucial role in attracting our target clientele. Additionally, our focus on sustainability and community engagement has not only enhanced our brand image but has also fostered positive relationships with local businesses and stakeholders. These accomplishments are testament to our dedication to excellence and innovation in the hospitality industry.

The hospitality industry is witnessing a dynamic shift, with travelers increasingly seeking personalized and unique stay experiences over conventional hotel accommodations. This trend is particularly pronounced in destinations like Tucson, Arizona, where the blend of natural beauty, cultural heritage, and recreational activities attracts a diverse visitor base. The market shows a growing preference for accommodations that offer a sense of place and connection to the local community, alongside modern amenities and sustainable practices. This evolving landscape presents both challenges and opportunities for StaySerenity Inn, as we strive to meet the changing preferences of travelers while standing out amidst the competition through our unique value proposition.

Our target customers encompass a broad spectrum of travelers who share a common desire for a tranquil and immersive stay experience. This includes business professionals seeking a quiet retreat after a day of meetings, families looking for a comfortable and engaging place to stay during vacations, and solo travelers drawn to the cultural and natural attractions of Tucson. Our marketing efforts are tailored to resonate with these segments, emphasizing the serene environment, personalized service, and access to local experiences that StaySerenity Inn offers. Understanding the diverse needs and preferences of our target customers is crucial to our strategy, guiding our service offerings and marketing messages to effectively attract and retain our desired clientele.

StaySerenity Inn’s competitive advantage lies in our ability to offer a peaceful and personalized stay experience that seamlessly integrates the natural and cultural richness of Tucson. Unlike our competitors, we emphasize tranquility and a deep connection to the local environment, catering to those seeking a more serene and authentic travel experience.

Our marketing plan revolves around highlighting the unique aspects of StaySerenity Inn, including our serene location, personalized services, and commitment to sustainability. We offer a range of accommodations and pricing options to suit various needs, from luxurious suites to more affordable rooms, all designed with tranquility and comfort in mind. Our promotions plan is multifaceted, encompassing digital marketing campaigns, partnerships with local businesses, and special package deals that showcase the value and unique experiences available at StaySerenity Inn. By leveraging social media, search engine optimization, and targeted advertising, we aim to increase our visibility and attract our target customer segments effectively.

Our operations plan is structured around key milestones that are crucial for the successful launch and growth of StaySerenity Inn. These include securing a prime location, obtaining necessary permits and licenses, completing the building and furnishing of our hotel to meet our brand standards, and hiring and training a committed team. We are focused on implementing an effective marketing strategy, launching our hotel with a strong online presence, and achieving operational excellence to ensure guest satisfaction and financial success. Establishing partnerships with local businesses and attractions is also a priority, enhancing our guests’ experience and supporting our goal of reaching $15,000/month in revenue.

Our management team is composed of experienced professionals with a diverse set of skills and a shared passion for hospitality. This team brings together expertise in hotel management, customer service, marketing, and sustainability practices, ensuring that every aspect of StaySerenity Inn’s operations is guided by knowledge and a commitment to excellence. Our leadership’s dedication to creating a serene and memorable guest experience is at the core of our business philosophy, driving our efforts to achieve success in the competitive Tucson hospitality market.

Welcome to StaySerenity Inn, a new beacon of hospitality in Tucson, AZ. As a local hotel, we take pride in introducing a high-quality lodging experience that has been missing in our community. Our commitment is to provide an unparalleled stay for all our guests, ensuring they find a serene and comfortable environment every time they choose us.

At StaySerenity Inn, our offerings are comprehensive and tailored to meet the needs of every guest. Our accommodation services are top-notch, designed to ensure comfort, security, and the best of modern amenities. Dining and catering at our hotel promise an exquisite culinary journey, with dishes prepared by top chefs that cater to a variety of tastes and dietary requirements. For those seeking an effortless and enjoyable stay, our concierge and guest services are always on hand to assist with any needs, from booking tours to making restaurant reservations. Our housekeeping and maintenance teams ensure that all aspects of the hotel are pristine and functioning optimally, creating a clean and welcoming environment for our guests. Additionally, our recreational and wellness facilities, including a spa, gym, and pool, offer guests the chance to unwind and maintain their health and well-being while staying with us.

Located in the heart of Tucson, AZ, StaySerenity Inn serves both the local community and travelers visiting this vibrant city. Our strategic location allows easy access to the best that Tucson has to offer, including cultural sites, natural parks, shopping, and dining experiences, making us a perfect choice for those looking to explore the area.

Our unique position for success stems from several key factors. Firstly, our founder brings invaluable experience from previously running a successful hotel, ensuring that StaySerenity Inn benefits from proven strategies and a deep understanding of the hospitality industry. Additionally, we are committed to offering superior guest and accommodation services compared to our competition, setting new standards for what guests can expect during their stay.

Since our inception on January 3, 2024, as a Limited Liability Company, we have made significant strides in establishing StaySerenity Inn as a premier destination for guests. Our accomplishments to date include the creation of a distinctive logo that represents our brand’s values, the careful selection of a company name that communicates our mission, and securing a prime location that complements our offerings. These achievements mark the beginning of our journey to becoming a cornerstone of hospitality in Tucson, AZ.

The hotel industry in the United States is a robust and thriving market, with an estimated size of over $200 billion in revenue annually. This industry encompasses a wide range of accommodation options, from luxury resorts to budget-friendly motels, catering to a diverse range of travelers and tourists. With an increasing demand for travel and tourism in the country, the hotel industry is poised for continued growth in the coming years.

Market research indicates that the hotel industry in the United States is expected to experience steady growth in the upcoming years, driven by factors such as a growing economy, rising disposable incomes, and an increasing preference for travel experiences. As more Americans choose to explore different destinations and seek unique lodging options, the demand for hotels is expected to rise, creating opportunities for new players in the market like StaySerenity Inn.

Recent trends in the hotel industry, such as the rise of experiential travel, the popularity of boutique hotels, and the increasing focus on sustainability and eco-friendly practices, bode well for StaySerenity Inn. By offering personalized experiences, eco-conscious amenities, and a convenient location in Tucson, AZ, StaySerenity Inn is well-positioned to attract a growing segment of travelers who seek unique and memorable stays. With a focus on customer satisfaction and a commitment to providing exceptional service, StaySerenity Inn is poised to succeed in the thriving hotel industry in the United States.

Below is a description of our target customers and their core needs.

Target Customers

StaySerenity Inn will target local residents seeking a luxurious getaway without the need to travel far from home. This customer segment includes couples looking for a romantic weekend escape, families desiring a convenient vacation spot, and individuals needing a serene environment for relaxation or personal reflection. The Inn will tailor its offerings to cater to these local demands, from personalized spa services to family-friendly activities and romantic packages.

Aside from local residents, StaySerenity Inn will also attract business travelers who value convenience, comfort, and exceptional service. These customers often seek accommodations that provide a seamless blend of work and leisure amenities. The Inn will equip its facilities with state-of-the-art business centers, high-speed internet, and meeting rooms to meet the needs of this segment, while also offering leisure amenities that encourage relaxation after a day of work.

Additionally, StaySerenity Inn will target tourists and adventure-seekers visiting Tucson for its unique attractions and outdoor activities. This segment is drawn to experiences that are both enriching and authentic, from exploring the Sonoran Desert to cultural tours in the city. The Inn will offer customized tour packages and adventure experiences, making it an attractive choice for those wishing to explore the natural beauty and cultural richness of Tucson.

Customer Needs

StaySerenity Inn fulfills the essential need for high-quality accommodation, catering to guests seeking comfort, modern amenities, and exceptional service. Guests can expect meticulously designed rooms that blend luxury with functionality, ensuring a restful and productive stay. The Inn prioritizes cleanliness and customer care, making it a preferred choice for discerning travelers.

Understanding the diverse needs of its guests, StaySerenity Inn also offers a range of guest services designed to enhance their stay. From a concierge ready to assist with local recommendations to seamless check-in and check-out processes, every aspect is crafted to meet the high expectations of its guests. Additionally, amenities such as high-speed internet, a state-of-the-art fitness center, and on-site dining options cater to both leisure and business travelers alike.

Beyond the basics, StaySerenity Inn recognizes the growing demand for personalized experiences. Guests can enjoy tailor-made services, including room customization and event planning assistance, ensuring their stay is as unique as their preferences. This attention to detail not only satisfies the immediate needs of its guests but also fosters a lasting relationship, encouraging repeat visits.

StaySerenity Inn’s competitors include the following companies:

Hotel McCoy is an art hotel that focuses on local culture and retro vibes, offering its guests a unique blend of modern amenities and mid-century charm. The hotel provides services such as an outdoor pool, a fitness center, and a bar, all adorned with works from local artists. Its price points are moderate, making it accessible to a wide range of customers seeking an artsy yet affordable stay. Hotel McCoy serves not only tourists but also locals looking for a staycation with a twist. Its key strength lies in its unique branding and strong local partnerships. However, its reliance on a niche market could be considered a weakness, as it may not appeal to all segments of the broader traveler market.

Arizona Inn is an upscale, historic hotel known for its luxurious accommodations and exceptional service. It offers a range of services including fine dining, a swimming pool, tennis courts, and beautifully manicured gardens. The price points are on the higher end, targeting affluent travelers seeking a premium experience. Located in a serene part of Tucson, it attracts both leisure and business travelers who appreciate its quiet elegance and attention to detail. Arizona Inn’s key strengths are its historic charm, high-quality service, and exclusive ambiance. A potential weakness is its higher price point, which may limit its accessibility to a broader audience.

Hacienda Del Sol Guest Ranch Resort blends the rustic charm of a historic ranch with the luxury of a top-tier resort. It offers a variety of accommodations from rooms to private casitas, alongside amenities such as horseback riding, spa services, and fine dining. The resort caters to a premium segment, with price points reflecting its upscale offerings. It serves a diverse clientele, including couples on romantic getaways, families, and corporate groups. Hacienda Del Sol’s strengths include its unique historical background, extensive amenities, and breathtaking desert views. However, its niche appeal as a luxury ranch resort may not cater to all preferences, particularly those looking for a more urban or contemporary setting.

Competitive Advantages

At StaySerenity Inn, we pride ourselves on surpassing the expectations of our guests through unparalleled accommodation and guest services. Our dedication to creating a memorable and comfortable experience is evident in every aspect of our operations. We understand that the little details make a big difference, which is why we offer personalized services tailored to the specific needs of each guest. From the moment they check in, guests can expect a warm, welcoming atmosphere coupled with state-of-the-art amenities designed to cater to both leisure and business travelers. Our staff is trained to go above and beyond, ensuring that every stay is seamless and every guest feels valued and cared for.

Beyond our exceptional service, StaySerenity Inn stands out in the competitive Tucson hospitality market through our innovative approach to guest engagement and satisfaction. We leverage cutting-edge technology to enhance the guest experience, from mobile check-in and digital room keys to personalized room settings that can be adjusted before arrival. Additionally, our strategic location offers easy access to local attractions, making us an ideal choice for guests looking to explore the best of Tucson. Our commitment to sustainability and eco-friendly practices also sets us apart, appealing to environmentally conscious travelers seeking a green lodging option. By focusing on these areas, we not only meet but exceed the expectations of our guests, securing a competitive edge in the market.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

StaySerenity Inn offers a variety of services tailored to meet the needs of every guest, ensuring a comfortable and memorable stay. The Inn prides itself on providing exceptional accommodation, dining experiences, and a comprehensive range of guest services and amenities aimed at enhancing the overall experience of its visitors.

Accommodation Services: Guests can expect to find a wide range of room and suite options designed to cater to diverse preferences and budgets. From standard rooms to luxurious suites, each space is meticulously furnished and equipped with modern amenities. Prices for accommodation services vary depending on the type and season but generally start at around $120 per night for a standard room, offering comfort and value to both leisure and business travelers.

Dining and Catering: The Inn features an on-site restaurant that serves a variety of gourmet dishes prepared with fresh, local ingredients. Guests can enjoy breakfast, lunch, and dinner in a cozy and elegant setting. For those who prefer dining in the comfort of their own room, room service is also available. The average price for a main course at the restaurant is approximately $25. Additionally, catering services for events and meetings are available upon request, with prices varying based on the menu and number of guests.

Concierge and Guest Services: StaySerenity Inn’s concierge team is dedicated to ensuring guests have a delightful and hassle-free stay. Services include booking tours and excursions, making restaurant reservations, arranging transportation, and more. While many of these services are complimentary, some, like guided tours and special event tickets, are available at an additional cost, depending on the activity.

Housekeeping and Maintenance: The Inn maintains the highest standards of cleanliness and comfort in all guest rooms and public areas. Daily housekeeping services are included in the room rate, ensuring that rooms are fresh and tidy. Maintenance issues are addressed promptly to ensure that all facilities are in perfect working order, contributing to a seamless guest experience.

Recreational and Wellness Facilities: For guests looking to relax and rejuvenate, StaySerenity Inn offers an array of recreational and wellness facilities, including a fitness center, outdoor pool, and spa. Access to the fitness center and pool is complimentary for all guests, while spa services, such as massages and treatments, are available for an additional fee, typically starting at $50 depending on the service.

At StaySerenity Inn, guests can expect a harmonious blend of comfort, luxury, and attentive service, all designed to make their stay in Tucson as enjoyable and relaxing as possible.

Promotions Plan

To attract customers, StaySerenity Inn employs a multifaceted approach to promotion, leveraging the power of online marketing while incorporating traditional and innovative tactics to ensure visibility and appeal. Understanding the importance of digital presence, StaySerenity Inn invests in a robust online marketing strategy. This includes a user-friendly website showcasing the hotel’s amenities, rooms, and services with high-quality images and virtual tours, allowing potential guests to experience the comfort and serenity of the hotel before they book. Social media platforms play a crucial role in this strategy, with regular posts highlighting special offers, guest reviews, and events at the hotel, engaging directly with a broad audience.

Email marketing campaigns are another essential component, targeting past guests and potential customers with personalized offers, updates, and newsletters, keeping StaySerenity Inn top of mind. Search Engine Optimization (SEO) ensures that when potential guests search for accommodations in Tucson, AZ, StaySerenity Inn appears among the top results, increasing its visibility and attracting more traffic to its website. Pay-per-click (PPC) advertising also amplifies this effect, targeting specific demographics and interests to drive bookings.

Beyond online marketing, StaySerenity Inn engages in local community events and partnerships with local businesses to build relationships and enhance its reputation. Hosting and sponsoring local events not only showcases the hotel’s commitment to the community but also provides direct exposure to potential guests. Collaborations with local attractions, restaurants, and businesses offer guests unique packages and experiences, making StaySerenity Inn a preferred choice for those looking to explore Tucson.

Furthermore, StaySerenity Inn implements a referral program, encouraging satisfied guests to refer friends and family with incentives, such as discounts on future stays. This word-of-mouth promotion is invaluable, building a loyal customer base and generating positive buzz around the hotel.

Lastly, StaySerenity Inn recognizes the importance of professional networking and will maintain a presence in local and regional hospitality associations, attending trade shows and networking events to forge connections within the industry, learn from peers, and stay ahead of trends that can enhance the guest experience.

Through these comprehensive promotional methods and tactics, StaySerenity Inn expects to not only attract customers but also create memorable experiences that encourage repeat visits and build a strong, loyal customer base in Tucson, AZ.

Our Operations Plan details:

• The key day-to-day processes that our business performs to serve our customers
• The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of StaySerenity Inn, there are several key day-to-day operational processes that we will perform.

• Check-in and Check-out Procedures: Efficiently manage guest check-ins and check-outs to minimize wait times and ensure a smooth process for guests. This includes preparing key cards, processing payments, and providing guests with all necessary information about their stay.
• Room Cleaning and Maintenance: Ensure that all rooms are thoroughly cleaned, sanitized, and ready for new guests by a specific time each day. This also involves regular maintenance checks to fix any issues such as plumbing problems, electrical faults, or general wear and tear.
• Customer Service: Provide excellent customer service at all times, including handling guest inquiries, complaints, and requests promptly and professionally. This also involves offering concierge services to help guests with restaurant reservations, directions, and recommendations for local attractions.
• Inventory Management: Regularly check and restock supplies such as toiletries, linens, and minibar items to ensure that everything guests might need is always available. This also includes managing inventory for the hotel’s restaurant or cafe if applicable.
• Food and Beverage Services: If the hotel has its own dining facilities, manage the operations of these services, including meal preparation, service quality, and hygiene standards. This also involves menu planning and ensuring that dietary requirements can be catered to.
• Financial Management: Monitor daily revenues and expenses to keep track of the hotel’s financial health. This includes processing payments, managing invoices, and preparing financial reports.
• Marketing and Promotions: Implement ongoing marketing strategies to attract new guests and encourage repeat business. This can include managing the hotel’s online presence, offering special promotions, and maintaining loyalty programs.
• Staff Management: Schedule and manage staff to ensure that all areas of the hotel are adequately covered. This involves training employees, managing shifts, and ensuring that the team works well together to provide the best possible service to guests.
• Health and Safety Compliance: Ensure that the hotel complies with all local health and safety regulations to provide a safe environment for guests and staff. This includes regular safety drills, food safety checks, and ensuring that all safety equipment is in place and working properly.
• Feedback Collection and Analysis: Collect feedback from guests through various channels such as comment cards, online reviews, and direct feedback to staff. Analyze this feedback to identify areas for improvement and implement changes where necessary.

StaySerenity Inn expects to complete the following milestones in the coming months in order to ensure its success:

• Identifying and Securing a Prime Location : Finding a location that is both appealing to potential guests and financially viable is crucial. This should be in proximity to local attractions, business centers, or natural beauty spots to attract a wide range of customers.
• Obtaining Necessary Permits and Licenses : Ensuring compliance with local regulations by obtaining all necessary permits and licenses for operation. This includes health and safety inspections, building codes, and any specific hospitality industry regulations in Tucson, AZ.
• Building and Furnishing the Hotel : Completing the construction or renovation of the hotel premises to meet the brand standards of StaySerenity Inn. This includes interior design and furnishing that align with the target market’s expectations and the brand’s image.
• Hiring and Training Staff : Recruiting a team of professionals who are committed to providing excellent customer service. This involves hiring for various positions including management, front desk, housekeeping, and any other roles necessary for the operation. Training is essential to ensure the team delivers service that meets the brand’s standards.
• Marketing and Promotional Activities : Implementing an effective marketing strategy to build brand awareness and attract guests. This includes digital marketing efforts, local advertising, partnerships with local businesses, and creating attractive packages or promotions.
• Launch Our Hotel : Officially opening StaySerenity Inn to the public. This milestone may include a soft launch period to gather initial feedback and make adjustments before the grand opening.
• Build a Strong Online Presence and Reputation Management : Developing a robust online presence through a user-friendly website, social media platforms, and listings on hotel booking sites. Actively managing online reviews and customer feedback to maintain a positive reputation.
• Achieve Operational Excellence : Streamlining operations to ensure guest satisfaction, efficient use of resources, and effective management of operational costs. This includes continuous training for staff, maintaining high standards of cleanliness and safety, and implementing eco-friendly practices.
• Get to $15,000/Month in Revenue : Reaching the financial milestone of generating $15,000 in monthly revenue. This will involve continuously analyzing performance, adjusting pricing strategies, and enhancing marketing efforts to increase occupancy rates and average daily rates.
• Establish Partnerships with Local Businesses and Attractions : Creating partnerships with local businesses, tour operators, and attractions to offer guests unique experiences and packages. This will not only enhance the guest experience but also contribute to increasing the hotel’s visibility and attractiveness. By achieving these milestones, StaySerenity Inn can mitigate risks and build a solid foundation for long-term success in Tucson, AZ.

StaySerenity Inn management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Carter Mitchell, CEO

Carter Mitchell brings a wealth of experience and a proven track record to the role of CEO at StaySerenity Inn. With a history of noteworthy success in the hospitality industry, his leadership is rooted in practical experience, having previously managed a hotel with distinction. This background has afforded him a deep understanding of what it takes to run a successful lodging establishment, from operational efficiency to exceptional customer service. Mitchell’s strategic thinking, combined with his hands-on experience, positions him uniquely to propel StaySerenity Inn towards lasting success. His leadership skills and industry knowledge are critical in ensuring that the Inn not only meets but exceeds the expectations of its guests.

To reach our growth goals, StaySerenity Inn requires significant funding. This investment will be allocated towards securing our location, completing necessary renovations and furnishings in line with our brand vision, and covering operational costs until we reach our revenue targets. Our financial strategy is designed to ensure that we effectively manage our resources to establish a solid foundation for profitability and long-term success.

Financial Statements

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Hotel Business Plan Example PDF

Download our Hotel Business Plan PDF here. This is a free hotel business plan example to help you get started on your own hotel plan.  

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12 Hotel Renovation Ideas to Revitalize Your Property

Happy guests are the most fundamental element of a successful hotel. To attract guests, increase brand loyalty, and keep hotel profits high, hoteliers must strive to keep their properties safe, modern, and attractive.  

Timely updates and repairs are necessary to prevent extensive property damage and increased future expenses. While there is no concrete rule for how often hotels should conduct larger project renovations, it’s important to maintain your hotel’s competitive edge and desirability.  

In this guide, we explore eleven hotel renovation ideas to amplify your hotel’s appeal, improve the guest experience, and support your team on any budget.  

Transform your renovation into revenue with our playbook

11 exciting hotel renovation ideas that are actually worth it  

Exterior and interior hotel renovation ideas  .

Updating your hotel’s exterior and redesigning interior spaces are worthwhile large-scale hotel renovations, which can have remarkable impacts on guests and their experience.  

1. Refresh the hotel’s exterior

The exterior of your hotel is the first thing a guest sees upon their arrival, and first impressions are everything in business . Refreshing your outdoor spaces to create a warm, inviting ambiance will solidify a positive first impression, and your guests will know that a stay at your hotel is the best option before they even step through your hotel’s doors.  

Consider the following exterior hotel renovations for a perfect first impression:  

• Repave parking areas, walkways, and wheelchair ramps to ensure safe access for all guests.  
• Replace exterior and parking lot lighting with eco-friendly, long-lasting LED bulbs.  
• Power-wash the façade to identify damage to the hotel’s face and repair cracks, holes, or other exposed damage.  
• Treat the hotel’s façade with a finishing system to protect it from the environment, like sealants, masonry coatings, thermal coatings, or paint with UV protection.  
• Hire a professional landscaping company to refresh the lawns, trees, and shrubs.  
• Plant bright flowers along walkways to guide guests and a garden to attract friendly pollinators.  
• Install new signage or update your existing signage with a thorough cleaning, fresh coats of paint, or eco-friendly LED bulbs.  

2. Revitalize the lobby

The hotel’s exterior sets the initial tone for a guest’s stay, and the lobby should maintain the same sense of welcome. Factors like the layout, size, and style of a hotel’s entrance can have an enormous impact on how guests feel when they walk in the door, and your lobby renovations should be conducive to your target customer.  

If you want to create a relaxing, peaceful lobby space where guests can unwind, consider redesigning the layout to an open floor plan with minimalist decorations. Think of small potted plants, muted colors, gentle music, spaced-out seating, and a light burst of refreshing cool air as guests enter. Clear signage to an on-site restaurant or bar would also be well-received.  

A more cozy atmosphere may benefit hotels primarily catering to extended-stay travelers. Design a hotel lobby with clustered lounging areas, warm lighting, and a quaint refreshment station with freshly brewed coffee, packaged snacks, and a reading rack to help guests feel at home.  

3. Revamp shared spaces

Like the lobby, your hotel’s shared spaces should be renovated with your guest's preferences and backgrounds in mind.  

Consider the following hotel renovations for impressive shared spaces:  

• Create coworking spaces. If your hotel is frequented by individuals or teams traveling for work , create comfortable coworking spaces where guests can work, make a phone call, or carry on a business conversation. Flexible seating areas, high-speed internet, USB charging stations, and plentiful power outlets are necessary in these spaces. As a bonus, you can offer coworking memberships to non-guests or rent the space for corporate meetings to generate additional revenue streams. For hotels with tight budgets or limited square footage, creating semi-private spaces in the lobby is a valuable alternative.  
• Modernize the pool. 40 percent of vacationing guests use hotel swimming pools during their stay, so a modernized swimming pool is a star amenity for hotels catering to families, couples, and friend groups. Start with repairs to any structural damage, like cracks or leaks, and resurface the pool. Upgrade the filtration system and install an energy-efficient heating system for year-round use. Keep the area around the pool safe with slip-resistant tiles and prioritize accessibility with a pool lift. Enhance the invitingness of the pool with a waterfall or slide, shaded lounging areas, well-landscaped greenery, and plush towels.  
• Open a game room. A hotel game room is a great opportunity to cater to families and large groups while also encouraging guests to engage with one another. Consider options like air hockey, ping pong tables, pool tables, traditional arcade games, and an assortment of board games. Provide art supplies and building blocks for the littlest guests. An outdoor recreation area is another option if indoor space is limited. This space can have lawn games, fire pits, and playground equipment. Both indoor and outdoor recreation spaces can be rented as event spaces for additional revenue.  

Pro tip: When modernizing shared hotel spaces, avoid falling into a “trend trap” by committing to a fad design or overly specific style that may fade. Don’t be afraid to be bold, but avoid fast fashion. Selecting timeless, appealing designs will limit the need for future large-scale hotel renovations.  

4. Highlight branding and visual merchandising

Branded hotel marketing tells guests who you are and what they can expect from your property. A business’ brand identity consists of the logo , color scheme, font, photography style, and other design elements that make it identifiable to customers. Whether you’re refreshing exterior signage, renovating the lobby, or designing entirely new shared spaces, incorporate visual in-house merchandising that aligns with your hotel’s brand identity and appeals to guests. Maintain consistency and use the same font and color scheme in all signage and displays, and incorporate in-house branded marketing in the design concept for the hotel’s on-site store, spa, restaurant, gym, and guest rooms.  

Hotel guest room renovation ideas  

Sprucing up guest rooms can significantly impact satisfaction scores and guest loyalty. Since the cost of hotel renovations per room varies widely, it is an invaluable investment for both low-budget and full-scale renovations.   

5. Maximize guest room space

Tru by Hilton set the standard for maximizing guest room space, with each 300-square-foot room cleverly designed to provide maximum impact with minimal space. Simple fixes, like wall hooks, tucked-away storage, and a primary focus on digital connectivity, allow Tru to meet all of a traveler’s major preferences while catering to a mid-scale budget.  

When explaining the concept behind Tru and why the brand appeals to many modern consumers, Hilton President and CEO Chris Nassetta shared, “They want a great bathroom and a functional room with all the things they need. They are a lot less focused on having excess space.”  

Follow Tru’s lead and consider the following renovation ideas to maximize guest room space:  

• Wall beds  
• Wall-mounted desks or fold-away tables  
• Built-in shelving and storage  
• Sliding or pocket doors  
• Floating bathroom vanities  

6. Design spa-style bathrooms

Update guest room bathrooms to create a luxury spa experience for every guest at your hotel. For sizeable renovation budgets, consider upgrading showerheads to innovative low-usage massing heads, installing jets in suite tubs, and switching to luxury floor tiles. For smaller renovation budgets, a refreshing spa experience is still possible with cotton towels, premium toiletries, and plush robes.   

It is also essential to prioritize the comfort of disabled guests and ensure ADA compliance in bathroom renovations . Equip ADA tubs and roll-in showers with sturdy shower seats, a secure horizontal grab bar, and lightweight, high-quality detachable showerheads. Make sure roll-in showers are properly sloped for adequate drainage and make necessary safety changes.  

7. Upgrade to eco-friendly amenities

Nearly 80 percent of guests prefer hotels that prioritize sustainability efforts , so commit to going green during renovations. Replacing wasteful, energy-guzzling amenities with environmentally-friendly hotel alternatives can benefit the environment, garner goodwill from guests, and have a major impact on the hotel’s bottom line. Simple but effective eco-friendly amenity changes can include:  

• Reduce plastic waste with reusable water bottles, glass drinkware, and filling stations on each floor.  
• Conserve water with low-flow faucets and showerheads.  
• Optimize energy use with LED lighting and energy-efficient mini-fridges, air conditioners, and heaters.  
•  Use biodegradable bedding, like bamboo sheets and organic cotton comforters.  

Digital hotel renovation ideas  

For additional eco-friendly hotel offerings, take your hotel renovations into the digital space and undergo a digital transformation .  

8. Install digital kiosks

Digital kiosks are powerful additions to your hotel renovation list. Whether seeking additional support for the hotel’s front desk team or looking for an exciting new way to improve the guest experience, installing a digital kiosk can help hoteliers accomplish both.  

Key areas to install digital kiosks include:  

• The lobby. Combine your lobby renovations with a digital kiosk where guests can check-in, read positive guest reviews, get the latest weather and traffic updates, and find local attractions and events.  
• The gym. Install a digital kiosk in the gym, where guests can sign up for workout classes or access pre-loaded workout videos.  
• The game room. A digital kiosk in the game room allows guests to reserve board games, play hotel trivia, and order food delivery from the hotel restaurant.  

Pro tip: All digital kiosks should also display branded video marketing and digital content.  

9. Implement hotel mobile check-in software

Almost 75 percent of travelers expressed a desire for hotel mobile check-in options in 2022. While person-to-person customer service lies at the heart of hospitality, truly successful hotels focus on providing guests with the experience they expect.  

As part of your hotel’s digital transformation and to meet guest preferences, offer guests the option to skip the front desk altogether and check in with their mobile device. With hotel mobile check-in services, guests can also select their rooms and make reservations through a single mobile app. Many mobile check-in apps also function as guest room keys by simply holding their phone or mobile device to the room’s smart keypad.  

10. Provide tablets in guest rooms

Many tech-savvy travelers look for hotels that provide a digital in-stay experience and make connecting easy. Hotel room tablets meet these needs by digitally linking guests to hotel services and amenities. During your renovations, install safe, easy-to-use in-room tablets that allow guests to:  

• Order room service  
• Charge and connect personal devices  
• Instantly connect to streaming services  
• Find local restaurants, attractions, and events  
• Control temperature, lighting, and other smart room technology  
• Enter a “do not disturb” request or housekeeping preferences  

Tablets also support hotel operations by streamlining communications between guests and staff. Requests and orders are swiftly delivered to the appropriate hotel department, fulfillment is logged immediately, and charges are automatically posted to a guest’s bill.  

11. Invest in integrated hotel software

When it comes to your digital renovations, overhauling your current operational systems with intuitive and integrated hotel software benefits the entire hotel team.  

Hotel software communicates information quickly from one program to another, reflects real-time guest and meeting room availability, and uses valuable hotel data to provide business intelligence reports.  

This software also eliminates tedious manual entry tasks and optimizes information sharing, allowing the hotel’s property management system (PMS), revenue management system (RMS), customer relationship management system (CRM), and online booking channels to communicate and update simultaneously.  

Invest in systems that provide additional hotel automation tools, such as automated email services, pre-arrival payment authorization services, or real-time guest billing when looking for integrated hotel software. With high-level automation, hotel managers and employees can better prioritize customer service and hotel improvement projects.  

Your guide to boosting group earnings through renovations

Post-renovation tips for hoteliers  

Once renovations are complete and all tasks on your “Reno To-Do” list are checked off, it’s time to show off your handiwork. With the hotel’s marketing manager and sales director, outline a plan to prepare fresh marketing materials and create a new advertising campaign for your hotel marketing strategy to reintroduce customers to the upgraded property.  

• Update your marketing material. Schedule a professional photo shoot to capture all the renovation changes. Have the photographer capture photos highlighting new amenities, upgraded hotel spaces, freshly installed hotel technology, and key features that appeal to your target customer. High-quality drone footage, panoramic photographs, and other experiential marketing content are also worthwhile investments.  
• Refresh your hotel’s online profiles. With your new-and-improved marketing material, refresh your online profiles to reflect your exciting hotel renovations. This includes updating your hotel’s main website, social media profiles, third-party booking channels, and Cvent Supplier Network listings with professional photos and footage, virtual and 3D tours , and revised descriptions. If your hotel renovations include upgraded wedding and special event space, be sure to also advertise renovations on sourcing platforms like Wedding Spot .  
• Stay connected through social media. People love getting the inside scoop on hotel operations, and social media is the perfect opportunity to give potential guests a first look at your hotel renovations and some behind-the-scenes entertainment. Share your new marketing material alongside pre-renovation photos as a before-and-after series. Upload time-lapse videos of the various renovation projects and explain why those projects matter. Most importantly, encourage social media users to interact with your content through a like or a share and see your followers and guest lists grow.  
• Develop a reliable maintenance plan. Once you’ve showcased your hotel's renovations, guests will flock to your hotel to experience your new offerings firsthand. The goal is for all customers to become repeat guests, and developing a clear-cut maintenance plan guarantees your newly renovated hotel upholds its appeal. Maintain the exterior’s inviting aesthetic with consistent landscaping. Keep the pool pristine and the spa hygienic with regular cleanings. Perform routine technology checks to ensure proper functionality for guests. Even with first-rate upgrades, a dependable hotel maintenance plan is essential to keeping your renovations in peak condition.  

It’s time for a hotel renovation!  

In crowded marketplaces and popular travel destinations, hoteliers who adapt to hospitality trends, prioritize an unparalleled guest experience, and ensure the highest-quality hotel conditions stay ahead of the competition. Whether you offer new guest amenities or upgraded hotel technology, even the simplest hotel renovation ideas can help your hotel stand out and capture traveler interest.  

Start your hotel renovation journey today and bookmark this list of ideas for fast access during the planning process!  

Up next: how to identify your comp set and strategically outshine the competition.  

Devyn Rheuby

Dev is a San Francisco-based content marketer specializing in article and eBook writing for tech and B2B companies. When she’s not working, she tries new coffee shops, reads fiction and fantasy series, and plays The Sims 4.

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Making a success of your hotel renovation project, a strategic performance project

Have you had a hotel for some time or have you just acquired one? Whether it is a 2* or 5* hotel, there comes a time when renovation of your establishment becomes necessary if it is to remain appealing and profitable.

Perhaps you feel the need to rethink the overall layout of the hotel to improve the flow of guests, to optimise space and comfort, or to improve your positioning to reach new market segments and stand out from the competition...

It is also possible that the renovation was forced on you as a result of an inspection when you took over. Turn it into an opportunity.

Renovating a hotel obviously requires investment in terms of both time and funding, but it undoubtedly provides a considerable return on investment in the medium to long term. Depending on the work involved, it is possible to move upmarket, to be awarded more stars, to increase your rates and therefore your turnover.

Of course, the specifications will be different depending on your business objectives , but also on the customer experience you want to create. Bear in mind that there are broadly 3 types of renovations:

• Minor: this is a simple 'decor refresh' to bring your hotel up to date.
• Complete: you need some real interior design work... to reconfigure the space, which means moving partitions, in addition to the decor.
• Major: we are talking here about a comprehensive exterior and interior renovation. There is necessarily some structural work involved and this takes more time but is essential if the structure of your establishment is ageing and needs to be brought up to standard. Of course, the decor will ultimately be part of that.

Whatever the reasons or objectives, refurbishment is not to be taken lightly.

Why and when to renovate? How to go about it, with whom and what budget will be required? Finally, when and how to communicate with your customers?

In this article you will find key insights to help you make the right decisions before starting your renovation project and turning it into a major business success opportunity.

The right reasons for renovating your hotel

First of all, the objective of any investment in a hotel is to attract customers, retain them and increase turnover. This raises the question of when it makes sense to downsize or even shut down in order to invest in a renovation. Here are the 3 main ones:

1. You feel the need for it

You don't need convincing. In your opinion, your hotel is becoming outdated. Its appearance is ageing, the exterior paint is faded, the carpeting is tired, the decor in the rooms has not been changed for far too long. You can see it's essential to give your hotel a new look.

From a business point of view, you feel that you are running out of steam, you are losing market share to the competition, your occupancy rate is constantly falling and your profitability is not looking great. The aim of any renovation is to modernise so as to regain market share, move upmarket, attract new customer segments, or even optimise space, all with the goal of increasing your turnover.

While renovating a hotel can be expensive, so can doing nothing. A hotel that has not done any refurbishment work for over 10 years will have to lower its yield in order to remain attractive compared to the competition. And the longer the renovation is put off, the more it will cost.

2. The customers say so

Making guests feel welcome is a top priority in your field. Are your customers posting mixed reviews on your distribution channels? Are there any recurring comments? Listen to them. They are telling you what they are looking for... and aren't finding. Today's guests are no longer just looking for an accommodation solution, they want real living spaces that offer them a memorable and shareable experience. How do they share when they are pleased with their experience? We give it to you in a nutshell…. Instagram and Facebook are now customer satisfaction indicators. Do they talk about you, tag you as they talk about their exciting experience? If so, you are heading in the right direction. Your e-reputation is poor or even non-existent? This reflects (at best) a lack of interest. We'll say it again, if you want to remain attractive, listen to your customers! This is the best way to retain them and turn them into ambassadors. In fact, if you want to know everything new guests' expectations, we recommend you download our free white paper on 2022 trends in hospitality . Spoiler alert: all customer segments are now looking for process automation and simplified communication through digital tools, and on the other hand local roots - they are discovering a destination, and the accommodation is part of it.

3. You have to bring your establishment up to standard

Extensive standards were already in force for premises that are open to the public prior to Covid, but they have become more complex over the last two years; access for people with reduced mobility, fire safety standards, noise and odour pollution, hygiene...

There are many constraints to consider. Since this will require an investment of time and money, it must be planned in such a way that it will be worth it in the long run. You don't want to have to redo everything after 6 months because you have to move a partition or excavate down to the drains because of an oversight. It will therefore be essential to avail yourself of the services of construction professionals with expertise in the hotel industry, or at least in public-access premises.

When to renovate?

Here we are talking about timing, finding the right moment.

Obviously, avoid high season. Once you have decided to start your renovation, the most suitable time of the year is during the low season, limiting the impact on your revenue as much as possible. You can use your PMS to get a handle on your seasonality.

Allow for a potentially longer period than what the contractor responsible for the work quotes. You need to be able to cope with the unexpected. You don't want to miss out on the festival in your region by two weeks, or the trade show that allows you to sell your overnight stays at a premium.

You may also opt for a phased refurbishment: floor by floor, the north wing and then the south wing, etc. This may seem like a good option when the work is due to take a long time, as it allows for partial operation during the whole period. However, even if you plan to put in place all possible measures to minimise the inconvenience, inform your customers and adjust your prices, you also run the risk of receiving complaints. And as we know, bad comments put potential customers off, and good comments attract them. Bear in mind that 72% of travellers read reviews before making a decision to book a hotel (2018 TripAdvisor study).

Wherever possible, try to do all of your work at once, in a concentrated manner.

The checklist - what to renovate in your hotel?

1. the premises.

Do you need a major renovation? There are structural elements in an establishment that make all the difference:

• Have the structure of your building surveyed to make sure it does not contain any cracks
• Good thermal insulation is a must for your customers' comfort

Sound insulation is equally important. Guests are keen to rest once they are in the hotel. They don't want to be disturbed by any noise and they want to be sure that their privacy is respected between the rooms.

• Customers need to feel safe and this means that facilities and fire detection systems must be up to standard and maintained, with clear signage provided

In addition, new guests mostly expect a hotel to be environmentally conscious. What have you put in place in terms of energy management or waste treatment ? Can you apply for an eco-label? Regional subsidies are available for carrying out renovation work with the aim of protecting the environment .

The exterior of the hotel is just as important as the interior. It's the first thing the customer sees before they come through the door.

How does your facade look? Is your hotel signage still functional and up to date? If you have a garden or a driveway out front, the landscaping has an impact on the guest experience.

Apart from functionality and comfort, there is your positioning to consider. Who are you targeting? What unique atmosphere do you want to create for your guests? You should have a very clear concept in mind.

If Millennials are your new target, what are they looking for? How can you make your lobby both connected and cosy?

If you have the potential thanks to your geographical location to target business travellers, workspaces will have to be created.

An experienced interior architect or decorator will recommend a functional spatial layout, an experiential design with a style, staging, or possibly a themed decor that will match your DNA and your target client.

He will also bear in mind, if you ask, the desired 'instagramability' of your hotel.

Finally, in terms of equipment, your hotel's connectivity is no longer an option but a MUST-HAVE! Wifi access must be free of charge, and available everywhere.

2. The lobby

Your hotel entrance sets the tone for the experience. Pay special attention to it. First impressions are important - this is where you welcome your guests and it is the starting point of the guest journey once they have come in. Many studies have been carried out and papers written on what a contemporary lobby and a lobby of the future should or should not be. Nowadays, the lobby has become a dynamic and multi-purpose space : it is a reception, a lounge, a place for socialising, a coworking space. There is possibly a bar or a library. It is an airy and open space with a demarcation of spaces through staging: ceilings, walls, furniture, light, music, smells, decorative objects... The reception area looks less and less like a big, cold counter and creates a barrier between staff and customers. A good idea is to set up an area with one or two tables and chairs, which encourages guests to sit down and ask for information from the reception staff, as they did at the Cretan Malia Park in Greece .

Administrative formalities such as check-in/out are carried out by guests themselves using tablets, electronic kiosks or via the hotel's mobile app such as the white label one provided by Bowo, saving everyone time and as part of a dematerialised process.

Studies show that if your lobby is designed like a living room , combining style, comfort and function, your customers will spend more time there, consume more and your profits will increase. You will also encourage people to want to stay longer.

The lobby is also a reflection of your brand identity. If you have an ecological positioning, provide plants, choose eco-designed materials. If you are located in an exceptional natural environment, consider large or bay windows so your guests can enjoy a great view.

Want something grand, with a guaranteed wow factor? You're going to need a lot of space. And like the Four Seasons Hotel George V in Paris, decorate your hotel lobby with a majestic chandelier, original tapestries, sculptures and other collectible works of art as well as exceptional floral displays.

Or are you glamorous and want to win the most romantic hotel award? In the spirit of La chambre du Marais , choose shimmering materials and colours, subdued lighting, evocative paintings and a bar that provides spirits

3. The rooms

A hotel room should be comfortable, practical and inspiring.

Work on making it feel roomy . Go for open spaces, brightness and remember “Less is More”. Don't clutter the space: a bed, bedside tables, a wardrobe and a desk are all the furniture you need. A designer hanging light fitting can accentuate a high ceiling.

Stand out. Step back from the conventional, but keep it simple. A themed room can be a good idea. Play with patterns, textures and materials and emphasise the choice of furniture and decoration: the headboard, the wardrobe, the desk, the lights, the wallpaper, the flooring... The more character and surprises the hotel room has, the more guests will talk about it, which will help increase your revenue.

Think 'comfort and well-being'. The quality of the bedding is crucial to customer satisfaction. Opt for bedding that fits with your positioning. The light above the bedside tables should be dimmed, and it should be possible to turn off the main light in the room using a switch that is accessible from the bed. Carpets must always be repaired.

At a time when Smart hotels are in vogue, a bit of technology can only be a genuine plus for the guests' room experience , while being easy to install for the hotelier.

Thanks to a connected solution like Bowo's and a little room automation, the guest can now control in 2 clicks the brightness in the room, the opening and closing of the electric shutters, the temperature, the music selection and volume, or access their Video on Demand account on the TV screen.

They can also manage their reservation or purchase room or concierge services. Some hotels go so far as to install voice assistants in the room. With a connected room, we are moving more and more towards hyper-personalization and you as a hotelier will be able to offer tailor-made services according to the predictions of the customers' needs.

4. Bathrooms

During a hotel refurbish, it is almost always necessary to completely renovate the bathrooms. These must be contemporary, functional, clean and of course in harmony with the style of the room. Natural materials to create Zen-like bathrooms are always a good idea.

5. Common or service areas: restaurant, spa, bar, swimming pool, etc.

Of course, first of all take care of the logic of how and where customers and employees will circulate. However, the different spaces in a hotel should not only be practical - they should also have character, and character that needs to be consistent with the hotel's decorative style.

Remember that bars, restaurants, spas and swimming pools are no longer exclusively for hotel guests. If they are attractive, they become potential meeting places for local residents or other customers outside the hotel and therefore represent a source of additional revenue.

These spaces can also be designed to include a share of technology: tablets for taking orders at the restaurant or choosing from the spa treatment menu, communications by internal messaging or pop-up with customers, an electronic payment solution in different parts of the hotel.

In addition, room automation will enable you to adjust heating and lighting among other things, in these areas and in real time, providing some real savings.

Renovation costs. Let's head for the checkout...

Some expenses are unavoidable, but to know where you are headed and to choose between what needs an in-depth renovation or just a lick of paint, you will need detailed specifications. These will also take into account the unavoidable constraints. Here are some ball-park figures to give you a rough idea.

In the Archidvisor hotel renovation guide, a selective platform for connecting with architects and building professionals, the following table provides cost estimates per m2 :

Good News: since the hotel industry plays a role in the local tourist economy, there are aids and subsidies such as the loan for hotel renovation as well as regional or departmental aid.

Talk about your renovation

You have decided to proceed with your renovation. You will certainly be closed for a while for the benefit of your future customers. Let it be known!

When you reopen, prices will be higher, so highlight the benefits of the refurbishment.

'While you're at it', you can generate reservations for the reopening with special early-bird offers.

Communicate by email to your former customers, as well as on your website and social networks.

The sooner and better you communicate, the faster you will see your ROI.

Once the renovation is complete, post photos and by all means make a short film in the style of the one by the Relais du Louvre to present the new facilities, or something more conceptual, if that fits your positioning, like the Royal Hotel***** Savoy & Spa in Lausanne . Will your facilities be open to customers from outside the hotel? Invite the locals to a small event for the reopening.

Let's summarise the main takeaways from this article.

Your renovation will improve the guest experience and ultimately save you money.

Heavy renovations are made to last. The longer you wait, the more it will cost.

Interior refurbishment, with the aim of staying competitive, should be undertaken on average every 7 years.

Current trends that are becoming must-haves are:

• An open, multifunctional lobby with character
• A connected hotel to anticipate customer needs and improve their experience
• An establishment with a low ecological footprint and a local presence.

📸 Here are some before/after examples in pictures

Refurbishment of an independent 3-star hotel by créateurs d'intérieur ..

Restoration of the Villeroy mansion into Maison Villeroy , a small Parisian luxury hotel from The Collection.

The renovation of the hall and breakfast room at the Casita del Mar residence in Saint Jean de Mont when it was taken over by its new owner.

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What is a Hotel Property Improvement Plan (PIP) Really?

All hospitality properties require periodic refreshes and property improvement plans (PIPs) that can demand significant capital investment. While some owners may not look kindly upon the immediate financial implications of a PIP, each one presents an opportunity to reevaluate the hotel or resort and plan for its future profitability.

That’s right: PIPs—when handled correctly—can be positive for hotel owners.

From a strategic standpoint, property improvements are meant to improve guest satisfaction and enhance competitiveness. These improvements are intended to increase market share and drive both occupancy and rates, while reducing fixed expenses. The ultimate goals are to enhance operating profit and asset value. It’s a win-win-win—for guests, owners, and brands.

What is a PIP for Hotels?

A PIP, or property improvement plan, is an action plan designed to bring a hotel property into compliance with the latest brand standards. Basically, it’s a long-term plan to upgrade and improve your hotel to provide customers with the experience they expect. As long as the hotel bears the name of the brand, it is expected to maintain the image of that brand. PIPs are a fairly regular occurrence for hotel owners and often include soft renovations at six years, a hard or more extensive renovation at 12 years, and an extremely large or complete redo of the property at 18 years. Also, any time a hotel property changes ownership a renovation is mandated and a PIP is initiated – although, a change of ownership PIP could be minimal depending on the last renovation cycle.

The goal of a hotel property improvement plan is twofold:

• First, PIPs help global brands maintain a consistent guest experience across properties. More often than not, PIPs are created by brand managers and property owners can typically negotiate a timeline for the required changes.
• Second, these improvements help hotel owners increase the profitability of their properties. By making necessary repairs and modernizing their hotel, owners can better serve guests, gain market share, and generate more revenue

What’s Included in a Hotel PIP

PIPs vary for each brand and individual hotel properties. While older developments may require upgrades to mechanical and electrical systems, newer hotels may only need relatively minor cosmetic changes. These areas of the hotel or resort property may be addressed by a PIP:

• Plumbing, electrical, and mechanical systems
• Elevators and stairways
• Security, safety, and communications systems
• Guest rooms and corridors
• Hotel lobby
• Business centers/meeting spaces
• Fitness centers/swimming pools
• Food, restaurants, dining areas or facilities
• Landscaping
• Interior and exterior lighting
• ADA compliance

In almost all cases, hoteliers can expect to update design elements that are essential to brand standards. Today’s PIPs also account for energy efficiency and operating costs. After all, the goal of these plans is to help owners maximize their hotel’s profitability. Updates to mechanical systems, plumbing systems, electrical systems, and HVAC systems may all be covered in the scope of the PIP. All these practical updates can save hotel owners money in the long run.

What to Expect with a Hotel PIP

It’s always attractive to flip a hotel for a quick profit. However, you and your investors may be more interested in long-term income rather than a quick capital gain. Hoteliers can typically plan for about 8% of revenues over a 10 year period on PIP costs. An owner must decide whether the hotel under its current flag is worth that much money.

PIP renovations are often negotiable. Talking to a team of architects and engineers with hospitality experience will help you quantify the cost of each requirement and identify opportunities for value engineering. Additional questions to consider for success at the negotiating table:

• Does the PIP address real problems or will you end up spending large sums to fix non-existent problems?
• Is your local market so saturated with competitors that the PIP will do little to improve your market share?
• Will projected hotel cash flows pay for the PIP?
• Do you have the right people available to execute an ambitious PIP? If not, can you get them?

And remember, during a PIP you have two options. You can follow the brand PIP to the letter, or you can choose to add a few of your own personal touches that will set your hotel apart from the others. If you choose to include a few of your own ideas, you will also need to have them approved by the franchise owner before implementing them.

Browse our website to learn more about our Hospitality division or contact Nikki Fox ( [email protected] ) to find out how GLR can help in your next hotel renovation project.

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5 MUST-KNOW TIPS FOR A SUCCESSFUL HOTEL RENOVATION

Hotel owners must maintain their properties in excellent condition to remain competitive. And as we all know, renovation projects aren’t easy at the best of times. Let alone for a hotel renovation. Pleijsier Hotelrenovatie can project the minds of both the hotelier and the hotel guest, making the process as hassle-free as possible. They focus on the renovation and conversion of existing hotel buildings or the finishing of new hotel buildings of national hotel chains. Today they share 5 must-know tips for a successful hotel renovation, characterised by their expertise in the field of hotel renovations. 

When it comes to a hotel renovation, there is no such thing as too much planning. Your busiest time is not when you should be pulling down walls or changing curtains. Review the property’s occupancy trends of the prior years to determine its off-season; this is the ideal window for the renovation. What is even more important, however, is to consider the timing when the renovation will be complete. Make sure the timing is prime to target guests.

Jan Pleijsier (Director): “Try to surround yourself with the right people. Establish a professional construction team, with expertise in the hospitality industry, whose focus is to implement and execute a detailed action plan. This allows you to continue running your hotel and to keep all of your staff informed and updated, whilst the experts manage the renovation works.”

Having a clear definition of what you want from the start will be the key to avoiding any time-consuming diversions halfway through the process. Take your time, immerse yourself in the possibilities and translate your goals into the action plan, design, and storytelling. Think about the expectations of your guests and the level of service you want to provide.

Defining your budget is also extremely important. Recognise what can be achieved in your renovation and what should wait until the future. It sounds simple, but it’s not.  

Renovations aren’t a regular occurrence, so you want to ensure your designs look as good in a few years as they do right now. Opting for classic styles, which stand the test of time is often a better choice than following current short-term trends. Switch the patterned wallpaper and carpeting for more neutral and solid colours. Choose textiles made from more natural fibres such as cotton and down feathers. Do however, not only look at replacing the wallpaper and carpeting, but also consider technological improvements in the room. The investment can often be quickly recouped by saving energy and maintenance costs.  

Wycher Naberman (Project Organiser): “An increasing number of travellers are focusing on sustainable accommodation options. Next to this, employees of big corporates are excluding hotels without a sustainability label from overnight stays. Always make room for energy-saving solutions with options for increasing comfort to remain competitive.”

4. EXPECT THE UNEXPECTED

Do not be surprised by an unusual event. Anything might happen along the way. Therefore, it’s utterly important to choose an experienced renovation party that understands the market and its demand. Allow the construction workers to walk into your hotel, not to be an annoyance, but to ultimately produce a great result. Express your confidence in them and they will always be by your side, even when unexpected surprises arise.

Nevertheless, no matter the renovation, it’s always essential to put additional funds aside to cover unexpected costs and hidden conditions.

Believe us, no matter how hard you try to smoothen the renovation process, guests are bound to complain. After the renovation is complete, however, guests will surely leave you with 5-star reviews. Either way, be prepared for overall ratings to fluctuate and be proactive about pricing strategies during these times. Most important; keep guests informed and involved.

Kirsten Pleijsier (Marketing Communications): “Refurbishments make a great story on your social channels. Build anticipation with lots of behind-the-scenes material. Ask your loyal guests and followers for input when making choices; it’s a great way to keep them involved. Also, nothing beats a good before and after story on your website or blog.”

Photo credit: Egbert de Boer

With more than 100 years of experience and numerous referral projects in the construction sector, Pleijsier Hotelrenovatie has developed into a reliable, transparent, and modern partner with an increasing focus on sustainability and future prospects. They concentrate on renovation and conversion of existing hotel buildings or the finishing of new hotel buildings of national hotel chains. The starting points for these projects are modernisation, sustainability and future-proofing, with a critical eye for detail. Curious about their projects or looking for more information, find them on social media or  check out their website .

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Hotel pip: negotiate a perfect property improvement plan.

 December 16, 2019

As a hotel investor, owner, or buyer, you need to know all about how a Property Improvement Plan (PIP) works. Therefore, we offer you this blog article about a hotel PIP, starting with a hotel PIP definition. After the hotel PIP definition, we clarify the difference between PIP and hotel flipping.

Next you’ll learn how to negotiate a “perfect” hotel PIP and how to finance a PIP. Finally, we’ll conclude by describing how Assets America ® can help and we’ll answer some frequently asked questions about PIP.

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What is a PIP in the Hotel Industry?

In the hotel industry, a hotel PIP allows you to bring your property into compliance with brand requirements. Basically, it’s a long-term plan to upgrade and improve your hotel to provide customers with the experience they expect.

With a good PIP, you can increase market share, propel revenues, defeat competitors, boost customer satisfaction, and swell profits.

If you own a flagged hotel , you probably already agreed to a property improvement plan during the purchase negotiation. Hotel brands jealously guard their reputations for value, luxury, cleanliness, and service.

The last thing the hotel corporation executives want is for a new buyer to muck up their brand name. Rather, owners and managers must revere brand standards or face substantial penalties.

Elements of a Property Improvement Plan

The guts of a Hotel PIP is an action plan to improve a hotel’s physical plant. For example, this can include:

• Plumbing and electrical systems
• Mechanical systems
• Guest rooms and corridors
• Elevators and stairways
• Meeting rooms
• Fitness centers/swimming pools
• Security, safety, and communications systems
• Food and drink facilities
• Landscaping
• Interior and exterior lighting

Obviously, a hotel would have to be in a sorry state to require expenditures for all of these elements. However, older properties that reek from neglect may come close. From the brand’s viewpoint, your expenditures for a property improvement plan increases the asset value of the hotel .

By making your property more efficient, your PIP should boost your operating profits . By making it more attractive, you can improve important metrics regarding rates and occupancy. A good PIP is a win-win!

How Assets America ® Can Help

When you are looking for hotel financing starting at a minimum loan amount of $20 million, Assets America ® is prepared to satisfy all your needs. Our network of private lenders, bank, and funding sources can offer you competitive acquisition and construction loans on affordable terms. Please contact us today for a confidential, no-obligation consultation. We are confident that our experience and expertise will convince you.  Call us today at 206-622-3000 or simply fill out the form below and we’ll respond promptly!

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Pip vs flipping hotel properties.

It’s always attractive to flip a hotel for a fat profit. However, you and your investors may be more interested in long-term income rather than a quick capital gain. How does a PIP factor into deciding whether to PIP or flip?

Well, an expensive PIP that will reach deep into the owner’s pockets may motivate a fast flip instead. Alternatively, an owner can decide to de-flag a property to save money on a PIP.

According to Lodging Magazine, hoteliers cough up about 8% of revenues on PIP costs. Accordingly, an owner must decide whether the hotel under its current flag is worth that much money.

For instance, are the PIP standards reasonable for the hotel’s market? Or are they the overblown manifestations of an out-of-touch corporate board? You didn’t purchase an economy hotel to reinvent it as a luxury hotel, despite the pretensions of an inflated PIP.

Questions to Ask

To get your bearings, you should look at your customer reviews and feedback. Ask yourself the following questions:

• Does the PIP address real problems?
• Will you end up spending large sums on a PIP to fix non-existent problems?
• Is your local market so saturated with competitors that the PIP will do little to improve your market share?
• Will hotel cash flows pay for the PIP?
• Will you have to deal with sleazy politicians and corrupt unions in order to renovate your property?
• Do you have the right people available to execute an ambitious PIP? If not, can you get them?
• Is your neighborhood on the upswing or is it in free fall? Is the population stable or dynamic?
• Will a new highway or airport change the value of your property?

As you can see, you have much to consider before committing to a PIP. Perhaps it would be better to flip the property and buy another hotel in a different location . 

How to Negotiate a Perfect Hotel PIP

Your franchisor wants you to spend heavily on your PIP. This is expectable. After all, it helps them burnish their brand image using your money. We suggest you negotiate the following five steps.

1. Professional Review

Perform a complete review with the help of professionals who can quantify the costs of a PIP. Of course, you want to know the cost of the worst-case scenario.

For example, suppose the PIP requires you to replace room packaged terminal air conditioners (PTACs) older than five years. You should survey your property to see how many PTACs are over five years old and determine their current condition.

If they are slightly older than five years, but in good condition, you can argue that they don’t need replacing, at least not for a while. Your professional assistant can make the case that this is a question of judgment. You can apply this same tactic to all relevant items in the PIP.

2. Identify Subjective Items

The PIP may have many subjective items, such as surface materials and finishes. However, you may have units with excellent quality surfaces that happen to be at variance with the PIP specifications.

Price these subjective items and advocate for their retention on the basis of value engineering . Argue that guests will not care or notice the difference between the current and proposed items. You can save thousands of dollars by negotiating these items.

3. Remove Long-Term Maintenance Items

The PIP should not contain long-term maintenance items like the roof or hot-water heaters. Obviously, you’ll eventually need to replace these items, but the need may not be urgent or even immediate. Therefore, argue that you’ll finance these items from future capital budgets and they should not appear in the PIP.

4. Schedule Work Intelligently

The PIP will cover multiple years of work. The problem is that you don’t want to inconvenience guests more than once. For example, you might replace the guestroom soft goods in Year One and the furniture in Year Two. This stretches out the disruption that guests will experience, which may hurt your occupancy rates.

Instead, explore finishing all the guestroom renovations in Year One and schedule the other work over later years. You may be able to isolate these renovations from your guests and minimize disruption. For more information, visit our FF&E Loans Guide .

5. Choose Your Construction Team

Don’t necessarily agree to the PIP’s recommendations regarding the construction company to use . The PIP might recommend a low-ball contractor to placate franchisees, but this can cost more in the long-run. The cheapest contractor might not be the least expensive when you figure in the costs of mistakes and rework. Don’t fall for low-ball pricing that turns out to be a bad deal.

Executing a PIP Perfectly

Okay, you’ve earned props for negotiating a perfect PIP. Even if the PIP is not perfect, it might be perfect for you. In any event, a property improvement plan is only as good as its execution. Consider these steps to prepare for the implementation of a PIP:

1. Fools Rush In

Give yourself a year between negotiating and implementing a PIP. As a new owner, you need some seasoning before committing huge sums to renovation plans. The PIP might contain assumptions that do not reflect the unique realities facing your hotel.

2. Collect the Right Team

Don’t use so-called “experts” without the necessary experience. You want a team that will carry out your vision for the hotel, not fight you every step of the way. Remember, a PIP is not a straitjacket — you can make important design and implementation decisions. Use your preparation year to recruit the right team for the job.

3. Use Third Parties

Consider supplementing your team with third-party help. It’s much cheaper to bring in an expert for a short time than to hire a permanent employee. By contracting with third parties, you can hold them accountable if they fail to live up to their contracts. You may also be able to renegotiate payments if you are not completely happy with the results.

4. Establish Your Timeline

Once you’ve worked out the plan details, set up your timeline for execution. Include penalty clauses for contractors who do not finish on time. However, avoid rewarding contractors for coming in early, as this will encourage shoddy, rushed work. Your contract should be aggressive so that your contractors–not you–pay for delays.

5. Renovate During the Off-Season

Assuming your hotel experiences seasonal effects, plan for your annual renovations to coincide with the low season . This will have the smallest impact on your annual revenues.

PIPs as a Corporate Weapon

Certain hotel corporations (we will not name them) inflict punitive PIPs on franchisees. Why? To force them out of business and make room for corporate expansion.

The strategy starts at the hotel corporate board. Directors draw up expensive refresh and rebrand PIPs that can change the target markets for their brands. By expensive, we mean up to 15% of annual revenues.

All franchisees must implement the new PIPs or face termination from the brand. The corporation can then ruthlessly enforce the PIPs and exact penalties or expulsion for even minor failures to comply.

This strategy hits older properties (over 10 years old) the hardest, since they will have the highest PIP costs. Naturally, the result is that older franchised properties may elect to deflag or reflag. Clearly, this is an opening for the corporation to build a new property in the location.

Obviously, the franchise agreement’s area of protection would prohibit these new properties if the old property remained. The bottom line is that punitive PIPs allow a franchisor to re-franchise an area. Shall we call it “franchise cleansing”?

Property Improvement Plan Financing

When procuring financing for your PIP, you need to evaluate the bids of competing lenders, including the franchisor. Some franchisors might not offer financing, or they might not offer the best deal. You should evaluate financing options along the following parameters:

• Maximum loan amount
• Fixed interest rate or maximum floating interest rate
• Loan-to-value ratio
• Required down payment
• Amortizing vs balloon payments
• Prepayment penalties

The packaging of the financing can vary from one lender to another. You might need an acquisition loan and a construction loan . How will these coordinate? Will you use interest-only construction loans that you’ll replace with long-term financing? How will the lender structure construction loan installments? The most important point is to choose a lender who will provide you with the most advantageous deal.

Hotel PIP FAQs

What does a “hotel design pip” mean.

This is the portion of the hotel PIP dealing with the design features of the hotel. Explicitly, these are the visible aspects on interior and exterior design that affect guest perceptions. Other portions of the PIP deal with technical and engineering aspects that do not affect the hotel’s look.

How much does PIP cost a hotel over 10 years?

A hotel PIP might not extend beyond 10 years. But whatever the duration, a reasonable cost is 7.5% to 8% of revenues. The cost allocations may be front-loaded, so you should average these costs over a 10-year period.

What does a “PIP list” mean for hotels?

The list contains the PIP items you will have to address. You negotiate the final list so that you can meet the requirements at the minimum cost. You should use professional assistance to help you arrive at the final list. 

Helpful Resources 

• First, Hotel News Now has produced an op-ed piece called Preparing for a Transaction in a New Era of Hotel PIPs .
• Additionally, there is an article on The Current Impact of Brand Hotel PIP Requirements on Sales from Hospitality Net.
• Finally, CBRE Hotels’ America Research has a hub of hospitality market information relevant to the hotel industry in general and property improvement plans specifically.

Related Articles

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• Hot to Own a Hotel – 12 Tips for Explosive Success
• Life of a Hotel Owner:  Responsibilities
• Hotel Owner’s Salary – Everything You Need to Know
• Top Hotel Management Companies:  Rankings + How to Choose

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