From intuitive room layouts and inviting communal areas to incorporating sustainability and thinking creatively about dead space, design is becoming an increasingly important tool when exploring how to enhance asset performance and improve the bottom line.
Rethink
And leveraging every square foot by utilizing dead space appropriately is big thing which can held drive revenue.
Benjamin Brunt, managing principal & chief investment officer at Noble Investment Group emphasized the importance of transforming public areas into revenue-generating spaces, highlighting a project Noble embarked on where the company partnered with Hilton and Hilton’s coffee partner Bluestone Lane to create a market experience as opposed to just a coffee shop.
“It’s really about activating as much of the public area component of a hotel and trying to figure out a way to create revenue generating spaces where in the past, in larger square footage properties, you'd have dead space.
We’re very much into efficient use of space and figuring out different ways to drive revenue,” Brunt says.
Joseph Piantedosi, executive vice president of asset management at Park Hotels & Resorts echoes this sentiment.
“Opportunity lies in taking what you have, concepting it, repositioning it and reconfiguring it.”
He shares an example a dilapidated beachfront bar in Key West was transformed into a two-story rooftop bar and event space. This renovation not only doubled the seating capacity but also significantly increased revenue.
Consider the market
Aligning design with market specific demands is also an important consideration when exploring how to maximize the potential of hotel assets, with experts stressing the importance of remembering that while some amenities may work phenomenally well in some markets, they may be bad investments in others.
Edward Hoganson, CFO & chief investment officer at Crestline Hotels & Resorts advises working closely with management companies to understand the return on investment specific to each market.
“It’s really important to take your manager's opinion and work with them because markets are very different and solutions aren’t one size fits all. Not a one solution fits all. For example in Tampa, having a pool does phenomenally well and in other markets for example downtown Chicago, it’s not the right fit and meeting space would help more with revenue generation,” he says.
And collaboration shouldn’t stop there, with Steen Petri, managing director of Investments at HEI Hotels & Resorts reinforcing the necessity of involving operations teams in the design process. He emphasizes that collaboration between designers, operations and management is crucial to creating spaces that serve multiple purposes while maintaining a cohesive aesthetic.
“To really drive profit, you need to think about if there’s more than one way of utilizing space and getting the right designers involved who can create a space that isn't just good for one purpose or one which can be used for other things but will always feel like it was made for a different purpose. Doing that takes a really good collaboration between designers and operations.”
Brands are also an integral part of the conversation when exploring revenue-enhancing design, with flexibility and pushing the envelope with the brand advised as opposed to rigidly adhering to brand standards that may not align with the specific needs of a property or with the market.
“Rather than just focus on a prototype or listen to a brand - not that brands don't have great ideas - it's about what the market wants. What's the gap in the market and can you help fill it? What's the profile of the demand at your property? What are their patterns? And how can you really create space and not wind up with something that's dead centre of the hotel but is really only utilized for a short portion of the day?,” Brunt says.
“There has to be variability and design flexibility both on the owner side, on the operator side and on the brand side to recognize that you can't simply take out the design book and say “this is how this room has to be built irrespective of the market you're building it in,” Piantedosi adds.
Hoganson agrees. “Don’t be afraid to push back. If it's not right for that location, there are opportunities to discuss that with the brands and I strongly encourage you to do it before making large investments.”
Communication and collaboration
But it always comes back to regular communication and collaboration.
“It’s about establishing that level of credibility and maintaining those relationships and then those conversations are a lot easier when you need to have them,” Brunt says.
And this communication becomes more important in the time leading up to the renovation and during the renovation in relation to possible delays and disruptions in the day-to-day of the hotel as this could not only hurt the guest experience but be counter-intuitive in terms of revenue enhancement.”
“Communicate very carefully with the management company,” says Hoganson, adding “one of our peeves is not being informed of delays or renovation being scheduled during a peak period, which doesn't make a lot of sense – it can cost a lot of money. Work with your operator on the timing ongoing, leading up to it and through the renovation and talk to them about what they think is right for the market and what they need. Take their input and make that part of the decision.”
The 360° view
Thoughtful design also needs to incorporate labour considerations, especially as costs continue to accelerate.
Petri explains: “When you design with labour in mind, that becomes part of profitability. For example, something as simple as a cart that you wheel out to serve champagne to your guests when they check in requires labour for setup, breakdown, etc. So if you want to do that and you're about to do a renovation, maybe build in refrigerators onto the front desk and somebody at the front desk can service this, helping you save on labour in that process. It just requires thinking through it with an eye towards profitability.”
Experts note that design – including with things like grout colour and the space between walls and furniture – could impact the ease of cleaning a room, therefore affecting the amount of time cleaning takes, which has an effect on the bottom line.
ESG
Importantly, environmentally conscious design is increasingly becoming a critical component of hotel design, with Piantedosi noting that Park Hotels & Resorts has established a dedicated team to focus on it following increased attention from hotels, customers and vendors.
“If you're not focused on it now, you're going to need to be. It's a key component of every RFP we put out there,” he says.
Hoganson and Petri advise that when seeking to justify investments on projects which are environmentally friendly, it’s important to shift the focus slightly away from being green from a design perspective but towards talking about the return on investment.
In a nutshell, stakeholders seeking to leverage design to create spaces that enhance guest experiences and drive long-term profitability need to adopt a holistic approach that balances market demands, operational efficiency and environmental sustainability.