In Tough Question Requires Equally Tough Answers, hospitality expert witness Steven Belmonte, President and C.E.O., Hospitality Solutions LLC, asks the questions: “Are product upgrades and renovations really needed during hard economic times?”
In short, you can’t afford to defer upgrades because of the poor economy. To put it another way, you can’t afford not to invest in an upgrade, regardless of the economy’s strength (or lack of it). The truth is, your guests don’t care if the economy is in bad shape, as long as your hotel is in good shape-and if it isn’t, they won’t be back.
Now because of the economic downturn and the resultant difficulty in getting a loan, you may be wondering how you could possibly afford to upgrade when business is down and cash-flow has been reduced to a trickle. One thing to consider is repositioning your product in the marketplace. Don’t let your ego get in the way-there’s nothing to be ashamed of in repositioning to a “lower” segment, and there are many economy-focused products available. It may be the right decision, one that keeps guest expectations in check while eliminating the need to invest what could be millions of dollars to upgrade in order to meet high expectations. Granted, this is not an easy choice: Your average daily rate will be negatively affected, but it may be your only viable alternative. After all, isn’t it better to reposition to a lower tier than to have your guests dissatisfied because their expectations are not being met? Think about it.