Liabilities of Closing the Hotel

Benefits of Closing the Hotel

• Faster construction schedule, because all spaces are available

• Lower construction cost—no temporary facilities, shorter schedule, more efficient work

• Possibility of higher quality—no start/stop transitions; the ability to attract the best subcontractors

• No guests disgruntled by construction work

Liabilities of Closing the Hotel

• Loss of income during closing

• Loss of goodwill and market presence during closing

• Loss of good employees during closing (they move on to other jobs)

There are ways to manage a renovation so that construction problems are minimized and the hotel can remain open. For example, a kitchen may be relocated to an on-site trailer if conditions require it. Spaces under renovation can be temporarily put in working order to accommodate a sell-out or high occupancy period. Employees can be informed of renovation plans and progress via an in-house newsletter, an attachment to their paycheck, and frequent postings of pertinent information. Guests can be accommodated by moving a restaurant or lounge to a meeting room on a temporary basis. When a property remains open, it is important to convey to guests that the level of service hasn't changed, even though the number of services offered may be temporarily reduced. One way to retain valued employees is to have them work on the project or on a temporary assignment in another department, rather than institute layoffs. This sends a clear message to employees that they are valued.

If the hotel remains open (albeit with some of its spaces temporarily closed), the renovation manager must communicate often and clearly with the sales staff, so the staff can properly manage the inventory of rooms and meeting space. Sales employees should treat the renovation manager like a client and block space to be renovated in the same manner they do with other clients; the renovation manager then has the responsibility to vacate the space on the agreed-upon date, like any other client. Following this type of procedure is vital in guestroom renovations, which typically take place in blocks of rooms. The renovation manager gets a new block upon completion of the old block. In many cases it is possible to set up a system whereby the contractor takes a given number of rooms per day or per week and returns a given number after a certain interval. By rotating the rooms in this manner, renovation work can be done more efficiently because construction workers have a constant workload.

Another management concern during a renovation is temporary facilities. Temporary facilities take the form of physically moved or relocated facilities and constructed physical barriers. When considering temporary facilities, you should take the attitude that something worth doing is worth doing right. When relocating facilities, guests will tolerate some inconvenience, but you run the risk of asking so much of guests that they are alienated. It is here that friendly, competent service will greatly assist the renovation effort, for if guests perceive that the staff is not in control of the situation, they will become irritated and may not return. It is important to finish temporary barriers properly. A wall of unpainted plywood or drywall is ugly and intimidating. Usually, temporary walls can be used to display plans and colored drawings of the work being performed. In addition to separating construction from guests, barriers should control noise and dust. If these are not controlled, they can increase housekeeping costs and annoy guests.

A further factor in coordinating renovation work with ongoing operations, as alluded to earlier, is accommodating construction crews. The attitude of most hotel managers is that construction tradespeople are a necessary evil of renovation, and, from their perspective, it is an accurate assessment. Most tradespeople are not used to working on jobs that involve an operating business, and bring with them habits developed from years of work on new construction. It is important that the hotel's renovation manager establish clear and precise rules for the workers to follow. Most construction workers will comply with reasonable rules. Rules should address parking, entrances and exits, restroom facilities, lunch facilities, smoking, use of radios, hours of work, and identification of employees. To maintain discipline and order on the job, violations should be quickly dealt with. It should be made clear to construction workers that these rules are not designed to infringe on their ability to do their jobs; rather, they are designed to facilitate the delivery of services to the hotel's guests and address the safety concerns of guests and construction workers.

Building codes and new legislation. A critical factor to consider for any renovation project is the impact that building codes and new legislation will have on the work. Most buildings were built to meet the codes in effect at the time they were first constructed and are typically not required to be upgraded to meet code changes as they are adopted and applied to new construction over the years. However, upon renovation, many of the new codes could come into play, requiring changes to:

• Entrances and exits (configuration, location, and number)

• Life-safety systems

• Parking areas

• Construction materials (an upgrade in fire-resistance levels, for example)

Due to federal legislation, one area of particular interest continues to be building codes designed to accommodate disabled individuals. These codes have moved well beyond simply requiring businesses to provide ramps for people who use wheelchairs. The Americans with Disabilities Act of 1990 broadens the definition of " disabled" to include people with vision or hearing impairments, arthritis, heart conditions, emphysema, shortness of stature, amputated limbs, and AIDS. The ADA requires all commercial buildings to provide a much broader range of facilities for disabled individuals than have been traditionally installed. These regulations are triggered by renovations.

Design considerations for disabled persons include:

• Security. Disabled people are especially vulnerable to crime and violence. Good lighting throughout the property, controlled access to the property, and good locking systems are important.

• Temperature regulation. Some people with disabilities are especially sensitive to temperature extremes and find it desirable to control the temperature in their guestrooms based on their own subjective feeling of comfort. Designs also should minimize drafts in guestrooms and other areas.

• Independence. Designs should allow disabled individuals to do as many things as possible without special assistance. It is important to install devices that assist individuals but do not limit their independence.

• Safety. Persons with impaired mobility should be able to find refuge within buildings during emergencies (rather than being forced to exit), if at all possible. [Endnote #14.11]

In summary, hotel owners should consider the needs of people with disabilities during renovations. Often, making changes to accommodate disabled guests will allow better service to non-impaired guests by providing a safer, more " user-friendly" environment for all.

Cost and quality control. Achieving the proper balance between cost and quality requires skill, attention to detail, and vision. There never seems to be enough funds for renovation. Good renovation managers spend endless hours revising budgets, seeking alternatives, and surgically adjusting the renovation's scope to achieve the most renovation for the funds expended. But cost-cutting should not be overdone. After the renovation is complete, the brief satisfaction of saving a few dollars fades quickly if it turns out that quality was sacrificed to achieve budget objectives, for the facility must live with the renovated space until the next renovation cycle. Mistakes to avoid include:

• Not hiring design professionals. It is difficult for many people to see the value of design professionals. Competent designers save their fees many times over by specifying the correct materials for the job, fixing problems on the plans rather than working them out in the field, knowing where to find competent manufacturers and contractors, achieving a consistent look to a space, and—most importantly—creating spaces that work aesthetically and functionally.

• Allowing unqualified contractors to bid or work on a project in an attempt to lower construction costs. This is perhaps the most destructive form of penny-wise, pound-foolish judgment. It is the renovation manager's responsibility to select competent contractors and tradespeople and pay them a fair price for the work. Some facilities have been ruined by contractors who did not have the ability to do the work properly. While the manager received a low price for the work, the end result was not worth the savings.

• Reducing the renovation's scope to the point that the renovation becomes meaningless. One does not renovate a lobby by replacing the drapes and reupholstering the furniture. If this work is all that needs to be done, it should be performed in harmony with the existing interior design, and not be called a renovation. This does not mean that this type of work should be avoided, but one should make decisions based on the needs of the space, not simply apply a few dollars to a space and call it " renovated."

When considering renovation, look for ways to save money without sacrificing quality. Some examples are:

• Asking food and beverage purveyors to supply equipment at no cost or reduced cost, if you use their products. Examples include coffee makers, juice dispensers, and soda equipment.

• Purchasing used equipment that has been refurbished. This is an especially appropriate idea for kitchens, laundries, and engineered systems.

• Buying equipment that may be show samples, prior-year models, or discounted because of superficial damage during shipping.

• Allowing renovation funds to build in a bank account; the funds will grow as interest is added. This may require delaying renovation projects for several months or even a year, a trade-off that should be considered if funds are especially scarce.

• Using textured wall coverings that will hide a poor subsurface and avoid costly wall preparation.

• Refinishing or reupholstering existing furniture if the quality and style are appropriate for the renovation.

• Using synthetic stone on walls and ceilings rather than the solid stone used for floors.

While these ideas may make some people cringe, they should be considered, along with other money-saving ideas, if the renovation budget is tight.

Final Completion and Acceptance. Final completion and acceptance is an important phase of all renovation projects. It signifies both physical acceptance of the work, as completed, and compliance with the legal requirements of the construction contract—meaning that the contractor is entitled to full payment of money owed.

It is common to formalize acceptance of the contractor's work by using a document called the Certificate of Substantial Completion. The essence of this document is that the renovation manager, design professional(s), and contractor agree that the work is fit for its intended purpose, that it meets the requirements of the construction contract, and that it is ready for occupancy. The renovation manager usually does not sign this document unless he or she has secured a Certificate of Occupancy from the appropriate local authorities and (if necessary) has attached a list, called a punch list, of work that does not conform to contract specifications. Once the renovation manager signs the Certificate of Substantial Completion, the contractor is paid in full (usually within 30 days) except for the value of the work on the punch list.

While the standard AIA contracts call for the contractor to prepare the punch list, this is not common in practice. Usually the design firm, in conjunction with the renovation manager, prepares the punch list for review by the contractor. The contractor may object to certain punch-list items on the grounds that they were not part of the original agreement; in this case, they are crossed out, if the renovation manager and designers agree. If they do not agree, the items must be negotiated.

Another issue during the final-completion-and-acceptance phase is clean-up. In many cases, the hotel's housekeeping staff will assist the contractor in the clean-up effort, in order to help meet the schedule and ensure proper housekeeping standards. The amount of cleanup the housekeeping staff will do should be worked out before signing the Certificate of Substantial Completion.

After the Renovation

Even after the renovated areas of the hotel are finished and open for business, the renovation is not yet complete. Several items should be addressed at this point (if not before), including:

• Employee training.

• Grand reopenings.

• Impact of the renovation on operating budgets.

Employee Training. Employee training is often neglected or ignored until a renovation is complete and management suddenly realizes that the employees who work in the renovated space need reorientation and training to maximize the benefit of the renovation. The interior designer should take part in the training to ensure that employees work within and maintain the space as envisioned by the renovation manager and designer. Training should address:

• New or changed service standards.

• New or changed methods of production, holding, and presentation of food and beverage items.

• How to operate new equipment, especially electronic systems (training requirements should be written into purchasing contracts with suppliers of this equipment).

One often hears the refrain, " Oh, I didn't know we could do that! " months after a renovation is complete. Managers and employees discover by accident or from suppliers how systems or equipment work or should be maintained. Examples include discovering capabilities in the new sound systems or lighting systems that managers and employees knew nothing about, or continuing to maintain a floor in the same old way when the new floor requires much simpler maintenance procedures. In these cases, management has lost opportunities and the employees have been done a disservice by a lack of proper training.

Grand Reopenings. Often it is appropriate to involve the hotel's marketing department or even the corporate office (if the hotel is part of a chain) in a public celebration of the renovation. The objective of the celebration should be to build awareness among potential guests, travel agents, and meeting planners that the new and improved facilities are available for use. The reopening is often a grand occasion, with dignitaries and the media invited. These events should be planned and budgeted as part of the original scope of renovation work. [Endnote #14.12]

Impact of the Renovation on Operating Budgets. As mentioned earlier in the chapter, the feasibility of renovation projects is based in part on projections of future revenue or future cost reductions. Once projects are completed, there should be a formal tracking procedure to determine whether each renovation project has the financial impact management projected. This tracking will be valuable for future renovations, providing managers with solid information with which to base future decisions.