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Understanding Hotel Property Improvement Plans

Written By BlueTeam  |  September 25, 2022

Hoteliers understand the importance of refreshing their brand, following new trends, and carrying out renovations to increase their overall revenue and meet their competition in the hotel market. Consequently, hotel owners, buyers, or investors should know how a property improvement plan (PIP) works.

What You Should Know About Hotel Property Improvement Plans

What Exactly Are They?

Hotel property improvement plans are action plans for hotels to bring them into compliance with the latest brand standards. Experienced hospitality industry professionals know that PIPs are a regular occurrence for hotel owners because they typically happen every six to 10 years. Branded hotel managers or franchisors usually create PIPs to recommend the following: 

  • Exterior and facade upgrades and renovations 
  • New Interior design elements 
  • Changes associated with equipment, furniture, and fixtures  
  • Updates to hotel amenities and common spaces 
  • Life safety improvements 
  • Improvements for compliance associated with the Americans with Disabilities Act of 1990 (ADA) 

Moreover, property owners usually negotiate a timeline for making these practical improvements.  

Why Are Hotel PIPs Important?

Mandated and formal PIPs have a twofold goal. Besides helping global hotel brands maintain a consistent guest experience across all properties, they help hotel owners increase their properties' profitability. Modernizing hotel amenities and investing in improvements and repairs will allow owners to serve guests better, increase market share, and improve their bottom lines. 

Due to their immediate financial implications, many hotel owners dealing with branded and franchised hotels aren't huge fans of PIPs. However, PIPs are an unavoidable part of their work because these plans prescribe the expected quality standards for a hotel's interior and exterior elements. 

Since PIPs can get costly for hoteliers, they must seriously consider whether it’s time to sell or if it’s worth keeping the property. They should compare a PIP’s costs with projected gains while considering the current state of the market and their competition every time they’re due for a PIP. Despite being a source of strain on the hotel owner’s finances, a PIP gives them a chance to reassess their property and plan for its future profitability. 

Guests, owners, and brands can benefit from the renovations when executed strategically and efficiently. For example, installing more efficient systems is a strategic approach to increase the hotel's asset value while decreasing operating costs. 

What Are the Elements of a Hotel PIP?

Since PIPs depend on the brand and individual hotel property, there's no one-size-fits-all PIP. While newer hotels may only require minor cosmetic changes, older developments may need to upgrade their mechanical and electrical systems. 

Hoteliers are usually expected to update design elements vital to brand standards. While guest rooms and amenities matter, furniture, faucets, and light fixtures are considered staples of brand identity. Furthermore, PIPs may call for enhancements to the hotel lobby, corridors, business centers, fitness centers, pools, meeting spaces, dining areas, elevators, and stairways. Other PIPS may also require updates to the hotel's exterior and outdoor spaces, such as improved exterior lighting, landscaping, and parking lots. 

Franchises that take the sustainable hospitality route require the introduction of energy-efficient elements across the board. Since a PIP aims to maximize a hotel's profitability, it also accounts for energy efficiency and operating costs. Consequently, their scope covers upgrades to plumbing, electrical, mechanical, and HVAC systems that save hoteliers money down the road. 

Hotel Property Improvement Plan

How Can I Get the Most Value Out of My Hotel PIP?

It’s important to note that PIP renovations are usually negotiable. Following these steps will help you make the most value out of your investment. 

  • Work with the right project team. 

You won't get the most out of your renovations unless you work with architects, designers, and engineers with PIP experience. Look for a project team with a strong hospitality portfolio and brand experience before moving forward with your PIP. Working with professionals who've fulfilled various PIPs can give you valuable suggestions on the fly to keep your renovations and repairs on schedule and budget. 

  • Prioritize. 

You must know when to engage and when to compromise with the brand for cost-cutting measures. Since the brand is invested in the property’s success, your PIP project team should also include the brand.  

You shouldn’t resist some of the necessary PIP improvement aspects that enhance guest experience and increase your hotel’s desirability. These improvements are worth investing in because they help create a great first impression. 

While the necessary PIP items can be negotiated, subjective items, such as wall finishes, flooring, and ceiling tiles, can’t. Since the cost of these elements varies widely, you’ll want to consult your PIP team. Aside from sharing opportunities for value engineering, these professionals can provide you with pricing breakdowns.  

  • Define your project schedule. 

As a hotel owner, it’s important to negotiate a timeline for agreed-upon renovations. For this reason, you’ll want to schedule construction to limit disruption and avoid derailing guest experience. While at it, it’s best to schedule construction to happen in phases and occur until after the busy season.  

Commercial Property Improvement Plan

Is Your Hotel Due for a Property Improvement Plan?

Hotel owners and hospitality industry professionals understand the importance of following their brand and maintaining their image. For this reason, they're required to undergo a PIP. While some hoteliers may consider PIPs a pleasant change, others think it's a dreaded experience they don't enjoy dealing with.  

Besides being costly, the construction process can significantly disrupt the hotel's functionality. If your hotel is due for a PIP, it's best to employ the right contractor to ensure things go smoothly so you can get back to normal sooner than later. 

At BlueTeam, we work with clients who own or manage commercial properties across a broad spectrum of industries. We partner with the portfolio owners, operators, and REITs within Hospitality, assisting them with planned Capital improvements, including Hotel PIPs as well as mitigating risks and driving business continuity during unplanned events. 

Regardless of your motivation, we have the skilled, knowledgeable, and experienced staff required to complete complex interior and exterior capital improvement projects quickly and with remarkable results.

Moreover, we are available to work round the clock or at any hour to minimize disruption to your regular business operations. From remodeling, improvements, refurbishing, and repairs, we're ready when you are. Contact us today to learn more about what we can do for you or request a quote. 

We are your trusted partner in times of need.