05/05/2024, 18:14 Investing CapEx in the Hotel Experience Pays Off

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Investing CapEx in the Hotel Experience Pays Off

Elevate What Makes Your Hotel Special to Guests

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Karen McSteen

By Karen McSteen
HNN columnist

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25 July 2023 | 14:45

Each year, hotel owners invest capital expenditure funds to maintain and improve their
properties — but are those dollars also elevating brand experiences?

Hotels use CapEx to acquire, upgrade and maintain physical assets. These investments in
a property can range from addressing critical maintenance and repairs to replacing worn-
out items to renovating specific areas or the entire property. But these improvements
don’t always set a property apart from the competition.

Your brand is what makes your property special and memorable to guests — the one-of-a-
kind experiences people have, the distinctive touches that reflect what makes your hotel
unique. The process of developing your CapEx strategy each year offers an opportunity to
further showcase and reinforce what your brand is all about. When hotel owners, asset
managers and property leaders come together to share their points of view and develop
the CapEx strategy together, they can spend money more effectively by elevating the
experience they offer.

Using CapEx Dollars To Differentiate

If your hotel is flying a brand flag, there are brand requirements that should be
incorporated in your CapEx strategy. Meeting these requirements may feel onerous, but
these investments will deliver greater returns as they build brand equity and drive
demand to your property.

Soft brands and independent hotel brands must build their own brand equity by defining
how their property is different and better than competitors and reflecting it in the
products and services they offer. This is what creates a meaningful connection with
guests. It’s important to develop that story first so that you can look through that lens
when making CapEx investments. While programming and service can help tell the story
of your property, they can't do it without product investments, which require CapEx.

Even if it’s not time for a big renovation, there are one-off items that need replacing due
to wear and tear. If carpeting in the lobby, chairs in meeting spaces or vinyl on the walls
need to be replaced, use this opportunity to think about how replacing these items can
help to reinforce your brand story. Simple choices such as colors, patterns or fabrics can

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make an impact. Likewise, if lounge chairs and umbrellas by the pool are faded, consider
how you could better connect to your brand story as you look to replace them.

When even a partial renovation is planned, consider how each element contributes to the
overall story. For example, during a recent $3 million refresh of the Art Hotel Denver, a
Curio Collection property, artful pops of color were added in select furniture and carpet.
The refresh also added a collection of original artwork and luxury touches, such as Italian
marble, to offer guests an even more captivating experience with a hint of local flavor.
This further reinforced the hotel's connection to art, celebrating creativity and the local
Denver community.

If you are re-concepting a food and beverage outlet, this is another way to reinforce what
your brand is all about and inform investment decisions. Graduate Hotels, found in
university towns, reflect local charm and collegiate culture. When The Graduate in Ann
Arbor, Michigan, transformed its restaurant space, it created a “Graduate Food Hall”
format, much like the mess hall experience of college. Even locals enjoy the dining
experience, which increases interest in the hotel as well as food-and-beverage revenue.

These are just a few examples of how properties have created a greater connection to
their brand by offering guests more meaningful and memorable experiences, even when
they were not investing in a full renovation.

Investing in Your Brand

As you shape your next CapEx strategy, keep these two points in mind:

1. Remember, your property is your brand. Use every opportunity to showcase it to

guests. Telling your brand story throughout your property is not a short-term
marketing exercise; it’s a long-term, business-building proposition.
2. At least annually, ownership, asset management and key property leaders should
together review CapEx needs through the lens of the brand story. Consider how
CapEx investments big and small offer an opportunity to reinforce your brand —
think lighting, carpet, bedspreads, wallpaper, chairs, artwork, food-and-beverage
concepts and recreational amenities. You don’t have to wait for big renovations to
make an impact.

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Every aspect of your hotel matters to a guest and to their experience with your brand. A
clean, well-maintained property is expected, but the distinctive elements that represent
your brand can create a lasting impression on your guests. By bringing your brand story to
life across your property through strategic CapEx investments, you will strengthen your
brand in the marketplace, delivering lasting returns.
Karen McSteen is principal of consulting firm brandMatters and a member of the
International Society of Hotel Consultants.

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.

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