- According to Smith Travel Research, the hotel industry’s year-to-date basic occupancy rate as of August 2014 was 66%, the highest it has been in the past 17 years.
- More people are traveling in the United States (including global travel to America which is projected to achieve a growth rate of 3.7-4.2% this year).
- Increased demand is leading to a 4.9% increase in average daily room rates and a 5.7% bump in revenue per available room, according to Hotel News Now.
This upswing in business performance has many hotels currently undergoing or planning renovation projects. In 2013, the U.S. hotel industry spent an estimated $5.6 billion on capital expenditures, the highest total since 2008. About 20% of all hotels underwent renovation last year, compared to 15% in a normal year. And at the start of 2014, almost 3,000 hotel construction projects were underway in the U.S., a 16% increase from 2013, which was up 48% over 2012.
While hotel refreshes are nothing new, they slowed considerably starting in 2009 as a result of the recession. As revenue numbers hit long-time lows during that time, many hotels were forced to put renovation plans on hold while they struggled to simply keep their businesses afloat. Now that the economy has turned around, funding for construction projects is easier to obtain, and hotels are rushing to renovate so they can capitalize on a changing marketplace.
Hotel Remodeling Trends Inspired by Changing Consumer Preferences
Savvy hotel owners realize today’s travelers have different tastes than they did even a few short years ago. Owners who allow their remodels to be inspired by current consumer preferences or forecasted trends stand the best chance of attracting travelers and seeing a worthwhile return on investment.
With that in mind, let’s take a closer look at some of the trends and insights currently shaping today’s hotel remodels:
1. Millennials Are Calling the Shots
Millennials rule today’s travel market, and their travel is expected grow in the next decade. Because of that, many hotels are remodeling to accommodate the desires and expectations of millennials. That means more integrations of A/V system in hotels, with music, monitors and more; more social gathering places, including exercise facilities. Hotels should also make considerable efforts to be environmentally responsible, so introducing green efforts is also a smart move to target millennials.
2. Tech Matters
Technology should be a key consideration for any hotel renovation project. Because today’s hotel occupant likely has a smartphone, tablet or laptop in tow, tech-friendly hotels are better at offering increased numbers of electrical outlets in guest rooms and lobby spaces than in years past. Guest are also seeking smart TVs that allow them to connect their devices, free hi-speed Wi-Fi, and even automated services, like online room service requests and kiosk check-ins.
3. Remodel Timing Is Essential
While remodeling projects are necessary for hotels that want to remain relevant and profitable, it’s important to plan construction in a way that doesn’t disturb guests or completely shut down the hotel. Managers should plan to remodel during a slow period, depending on location. For some hotels, that’s winter, and others it might be summer or other time frames.
4. Hotel Meeting Spaces Are Evolving
The way we work has evolved thanks to technology. Not only are workplaces changing with technology, but so too are hotel meeting spaces. Many hotels are taking a more free-form, on-demand approach to their meeting spaces, outfitting them with couches, vending machines, and even video game consoles in addition to standard business amenities. Hotels like Marriott and Starwood let guests reserve their meeting spaces online in blocks of time for anywhere from $50 an hour to $200 for half a day. Even when meeting spaces aren’t reserved they still generate revenue as guests buy food and drinks and take advantage of other exciting amenities.
Staying competitive in today’s hot hotel market translates into upgrading and renovating to avoid irrelevance. Smart hoteliers know the key to getting the best value from a remodel is to plan for today’s changing customer base and evolving technology. Hotels can confidently move ahead in 2015 by using a mix of technology, people management and asset protection measures with Mobile Mini storage containers for remodels.