Hotel owners may be ready to reactivate development plans, but their development teams might not be.
A lack of materials, ongoing disruptions to the global supply chain and labor challenges throughout the industry are holding developers back from fulfilling the growing list of requests and contracts coming to market.
Any group contemplating starting up renovations or construction should come to the planning table fully prepared. Otherwise, the opportunity may be passed over for someone else who is ready to move forward immediately.
The hotel brand companies have been sympathetic to owners, allowing property-improvement plans (PIPs) to be put on pause over the past 18 months due to the pandemic. But now they are starting to require owners to move forward and with good reason.
Guest expectations are continuing to rise as travel picks up in earnest. Hotel owners and brands are eager to get their properties back on track in order to meet guests' demands. On the development side, larger ownership companies seeking to fulfill PIP obligations across their properties are continuing to be favored, thus creating challenges for smaller ownership groups.
The rush of owners to hotel design and construction projects is taking place now and may create obstacles for smaller groups through 2022 and 2023. While this may not always be the case, smaller ownership groups are going to have to be proactive if they want to execute projects this year.
Ownership groups without a plan of action might either have to wait longer to execute or consider a development team not as familiar with hospitality. Current hospitality partners are starting to feel the aftermath, in a good way, from the pandemic’s slowdown. Along with the demand for new projects, finding available manpower to handle the onslaught of projects will be a challenge.
Ownership groups with brand obligations that have been deferred should also speak with their representative about timelines for PIP completions and whether or not any flexibility or additional considerations are warranted for specific properties. This could be a more pressing discussion on full-service and lifestyle hotels as they typically have longer review processes due to the customization requirements, elements which add complexity to the review process and should be accounted for ahead of time.
The most important element for owners as the industry starts to recover from the pandemic is to have clear communication between the operator, brand and development team. Owners showing a willingness to work toward fulfilling PIP obligations are more likely to receive exemptions and deferrals. However, owners will need to show good faith they are moving forward to assure the brands they are compliant with upcoming requirements while creating a path for leniency if necessary.
Another opportunity to consider is meeting with procurement/purchasing agents and vendors to see what options are available for purchasing materials. These discussions will help set a timetable and provide a clear window on current restrictions and expectations of the supply chain recovery timing.
While COVID-19 has certainty created an impact to the hospitality industry, there have only been minor changes with hotel design — nothing on a major scale which overhauls the traditional hotel layout.
With public and event spaces in increasing demand as the industry gets back to normalcy, there has been discussion of rethinking design elements. Designers and contractors are being asked to react to operational changes due to shifts in travel norms, working with restrictive staff sizes and other fallout due to the pandemic. These suggestions are likely to remain in place to help provide guests a high level of comfort that they are in a safe environment.
While the pandemic has affected each of us in various ways, presently the challenge lies in organization, planning and execution. Meeting with designers, development teams and brand leaders as early as possible in the development process is a must to be able to meet future guest expectations.
Stephen Siegel is principal of H-CPM (Hospitality CPM).
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.