Getting (Back) to Grips with PIPs

7/16/2012 By Mario Insenga

Doing more with less is a common theme for many industries, but few more than lodging. This industry was hit hard, and funding in the shape of bank loans or other external capital was simply not available for hotels needing to renovate, purchase new furniture or redesign rooms. While anxious hotel owners and managers waited for available financing to flow again, it wasn’t uncommon for corporate hotel brands to put their Product Improvement Plans, or PIPs, on ice.

Suspended PIPs were a short-lived financial relief, but hotel owners and corporate brands are now reinstating mandatory improvement plans. Many hotel owners now feel they are finally emerging from the depth of recession only to face new financial concerns over how to replace less-than-perfect furniture, and overhaul lodging décor.

Even hotel managers who are in a position to secure full funding for a complete renovation are wary about the literal and figurative fallout from renovations, and are unwilling to jeopardize guest experiences with the dust, inconvenience and upheaval of a full overhaul in a shaky financial climate. However, despite less than favorable circumstances, hospitality businesses not only desire to strengthen their brand, but are still aware of the necessary corporate standards they must maintain to keep their branding. While PIPs may have gathered dust on a back shelf for a while, they have certainly not been forgotten by corporate management.

In many industries, the recession has forced decision makers to be more creative, and the hotel industry is no exception. In a recent survey completed by The Refinishing Touch, hotel owners and managers agreed that financing PIPs is by far their greatest concern when considering future hotel plans, with 72 percent citing financial worries about PIPs, and only 32 percent saying that they faced “more pressing concerns” than PIPs.

Customers Will Not Tolerate ‘Outdated’

Our survey also revealed that 61.5 percent of hotel managers felt that travelers are unforgiving of renovation lapses during hard financial times. Only just over a third felt that their guests were sympathetic to those financial pressures. As many hotels and chains are realizing, a brand cannot afford to be judged by its weakest properties. Despite the challenges, customers will not settle for second best when spending their hard-earned and hard-saved dollars on accommodations. With this in mind, restricted funds have hotel managers looking to squeeze every ounce of value that they can out of existing properties. Room renovation plans that may have automatically resulted in orders for new furniture in economic boom times are no more. Modern hotel owners are approaching upgrades with a more thoughtful and sustainable approach.

Furniture asset management practices, including refinishing, upholstery and armoire modifications, with the goal to reuse, repurpose or rejuvenate, are more environmentally and fiscally responsible. It’s a practice that falls right in line with the contemporary ‘use-towels-more-than-once’ trend, or programs that use recycled water for landscape irrigation. To give you an idea of the practice’s overall impact, here at The Refinishing Touch we have given more than 1.5 million rooms of furniture a new lease on life, preventing the harvesting of more than 500,000 hardwood trees for manufacturing new furniture.

Now that PIPs have once again become a key factor in brand reorganization and improvement, general managers and franchise owners need to find smarter ways in which to spend their limited budgets on renovating and updating rooms. By working more efficiently, through furniture asset management plans, hotels can still provide their guests with top quality accommodations, while meeting and exceeding hotel brand requirements and PIPs.

Asset Maximization

Many hotel executives are now finding that modernizing a room’s décor can be practical and economical, especially though tactics including, refinishing and upholstering furniture, converting armoires to accommodate new technologies, updating fabrics, and incorporating new granite, quartz and glass surfaces. Each incurs minimal cost and disruption to guests when compared to buying new.

Furniture asset management views furniture as an investment, not a disposable commodity. As it stands, many hotels and other organizations across other industries are still trying to grasp this idea, while numerous tons of furniture continue to end up in our country’s landfills each year. By analyzing and understanding the furniture assets that they already own before deciding to purchase new, hotels can make informed decisions about how furniture can be re-used or refinished to like-new condition. This includes updating fabrics, furniture hardware and color changes. Furniture asset management is an important step towards seeing the value of existing furniture as a linchpin to future improvement goals. What’s more, those benefits can be customized for each hotel, and more often than not, existing furniture is of better quality when compared to what is available on the market today.

The savings gained from refinishing existing hotel furniture are significant. On average, hotels can expect as much as an 80 percent cost savings when refinishing furniture instead of buying new. For example, during a recent project for the Windsor Court Hotel in New Orleans, refinishing and refurbishing achieved a 79 percent cost savings. When comparing the project to the cost of buying new furniture, that meant spending $86,713 rather than $411,263.

The value that refinishing has for the environment is also tangible. In that same Windsor Court Hotel project, 2.91 tons of carbon dioxide was expended, as opposed to the estimated 294.5 tons that would have been used in purchasing all-new furniture. That’s a carbon footprint reduction of 90 percent, and an environmental credential that hotel operators can proudly add to their green efforts—a draw for travelers who are increasingly looking for greener, more sustainable options when staying at hotels.

Other Benefits to Refinishing

Other, perhaps less-measurable savings afforded by furniture refinishing also exist. Refinishing is a way to better manage assets, but it can also be a better way to manage downtime, logistics and quality. In a busy workplace such as a hotel, where empty rooms equal lost revenue, this is crucial. It’s not unusual for rooms refinished on-site in the morning to be released for guests that same night. The largest concern that hotels face in buying new furniture is the amount of work and manpower that is needed to replace old furniture. The removal and installation process not only is less economical than refinishing, but it can take the entire hotel out of service until the process is complete.

In terms of cost, environmental conservation as well as from a logistical standpoint, smart approaches to refinishing, upholstery,  furniture conversion, textiles, fresh finishes and new hardware are all wise options for hotels looking to push forward with PIPs while ensuring paying guests stay satisfied with their accommodations. Payoff is immediate in terms of convenience, and lasts longer in terms of quality, durability and aesthetics. Refinishing is not a save-now, pay-later scheme, but is instead a sound PIP tool, yielding quality asset returns with heavy green considerations.

Mario Insenga is the founder and president of The Refinishing Touch.


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