Why hotels are refurbishing more often

Newly refurbished restaurant.

Eventually every property needs an upgrade. But with over 900 rooms opening across the country over the last 12 months, more than 2,000 under construction, and about another 2,700 proposed or mooted, owners must consider speeding up the renovation cycle to compete with the new supply of hotels.

Traditionally hotels would refurbish on long six to seven-year cycles, only freshening up when the property started to look aged or tired.

“Operator and investors typically work on seven-year cycles for room refurbishments, 15-year cycles for hotel bathrooms and five-year cycles for food, beverage and public areas,” said the Colliers Capital Markets Australia & New Zealand Investment Review 2019.

However, with the new wave of competition coming from all the new hotels, properties are being pushed to refurb more often.

Suresh Subramaniam, founder and CEO of the U Hotel Group noted an increase in the need to invest in relevant refurbishments, believing that hotels need to be freshened-up every three years to remain up-to-date with guests’ needs.

This is most pertinent with technology, as guests are looking for hotels to satisfy the same personalized and connectivity needs they get at home. Visitors are often bringing up to three devices which all sync up together and they expect the hotel room to integrate the same way.

“These guests are self-sufficient, tech-savvy travellers who are comfortable using apps or mobile websites and expect seamless connectivity across platforms and devices,” said the Colliers report.

It’s not just a trend; it’s critical to remain competitive. If all the new hotels are fitted-out with the latest technology, then the longstanding established properties need to be as well.

While technological advancements are driving the need to refurbish more often already, as technology further evolves and guest preferences change, the renovation cycle may likely get even shorter.

Another growing priority for modern hoteliers is making certain communal areas are as ahead of the game as the rest of the property. Lobbies have become central meeting points, and food and beverage outlets have become the place to showcase local products and innovation.

This doesn’t necessarily mean going all in with a fancy new lobby, but also means taking another look at facilities like fitness centres which are often left ignored.

Food and beverage is a flourishing segment of the accommodation market right now. Because many properties are striving to have the best, trendiest and most welcoming offerings the food and beverage refurbishment cycle has got even shorter, despite it already being the part of the hotel which generally has the shortest cycle.

The final influencing factor in the country’s shrinking refurbishment cycle is new ownership. With a string of major hotel sales in New Zealand and Australia over the last decade, a lot of new owners and players have made their way into the market. To support the new identity and brand, often a big renovation and relaunch is needed to support it. We’ve seen that recently here in New Zealand with the sale of the Museum Hotel in Wellington and its refurbishment into the QT Wellington and is currently happening with the CQ Hotels in Wellington which has been purchased by Naumi Hotels with plans to renovate and reopen in the last quarter of 2019.