Hotels derive their value primarily from the amount of income—or profit—they generate for owners and investors. The cost to acquire a hotel, as a result, depends not only on the tangible assets (i.e. the building and any other physical property) but also on its ability to attract guests and maximize how much they spend.
Insufficient maintenance will render a lower profit for owners and investors even if they have no intention of selling the hotel. Proper upkeep ensures the premises retain enough appeal to limit room vacancies and reduces the expense of improvement projects, which cost more to undertake the longer they remain unaddressed.
A preventative maintenance program creates the structured process necessary to sustain a well-run hospitality operation. Individual room aspects such as carpeting, headboards and air conditioners all have different lifecycles, so calculating a rough timeline for each item helps facility managers know when they should start thinking about replacements.
“If you don’t have [a preventative maintenance program], you don’t have control of your maintenance budget,” says Kirby Payne, president of HVS Hotel Management and HVS Asset Management Newport. “Sometimes all of these things come together [at once] and might happen in one particular year.”
Property management software can assist facility managers and maintenance personnel in keeping a preventative maintenance program on track. The capacity to break down repair requests and other work orders by room as well as product type enables a hotel to become more efficient with diagnosing and correcting continual problems.
“You want to document what you do because then you start to see patterns and things that break more often,” Payne says. “[Maybe] there are air-conditioning units in certain rooms that seem to have more trouble [than others, for example].”
Comparing a hotel to other similar lodgings in terms of how they operate allows facility managers to establish a more accurate maintenance budget. Industry reports such as the HOST Almanac help guide this procedure by illustrating the revenues and expenses for thousands of different hotels across the country.
“Then you apply what you know about your property,” says Maxine Taylor, executive vice president of asset management for The Chartres Lodging Group, LLC. “Does your property need a lot more [repair and maintenance] this year? Did they not spend much over the last five years, and now you need to make up for that?”
Facility managers should estimate the cost of larger improvement projects—or capital expenditures—as best as they can for the next five years. Planning for these long-term jobs usually requires some kind of reserve fund, although owners and investors tend to set aside less than they should.
“It’s never enough; the capital improvements are generally more than [the money you set aside],” Payne says. “Nobody is saying you can’t reserve more, [but] the problem is the owners also want to have a return on equity.”
Oftentimes, hotel management expects the room attendants to notice any disrepair and subsequently write up service requests. But attendants need more time to complete this task than someone with property maintenance expertise, and they become increasingly frustrated when their work leads to inaction nevertheless.
“The most beneficial thing is to talk to the supervisors who are doing the inspections of the housekeepers’ work,” Payne says. “You’re going to get more bang for your buck [by doing] quarterly or semiannual maintenance inspections and talking to the supervisors.”
Meeting with hotel management and the supervisors regularly gives facility managers an opportunity to evaluate outstanding maintenance issues. The constant collaboration also ensures they can review the actual bids for an upcoming project as well as the return-on-investment (ROI) calculations for each job.
“We’ll get into very detailed discussions [about this year], and then it’s a more general projection for the next five years in terms of how we think we’re going to need to spend the capital,” Taylor says. “We like to prioritize emergency and ROI projects. If you can do an LED [lighting] change out or something similar that’s going to show you a return, that would be our preference on the ownership side.”
Be sure to join the Lowe’s ProServices LinkedIn Group to read additional content and interact with other Construction/Trade and MRO professionals.