CoStar: Hotel Brand Refreshes: Design, Service and Profitability

CoStar- Major hotel brands are increasingly pondering the idea of a refresh, but there are certain intricacies in play when it comes to this consideration.

It’s not unusual for brands, including those at the top of the market such as Fairmont, to announce a refresh — or as Fairmont called it a transformation. Others might call it a repositioning, a reinvention or a renewal, but the import is the same. The brand’s leaders have decided they need to present a new face to the marketplace even if the product itself is still appealing and doing well.

Management companies, because of their role facing both owners and brands, often find themselves in the middle of refreshing initiatives, negotiating with the brand to maximize desired changes while working with owners to make sure that there is a return on any investment.

“The manager is an extension of the owner,” said Will Woodworth, senior vice president, investments, for Peachtree Group. “If you have a focus on profitability, you need to look at the physical product and delivery. When you see profitability eroding and decide that it’s the product and not the market. Then you have to think about how to get back on track.”

There is a built-in tension with refreshes, Woodworth said, with brands seeking to enhance the product while owners maintain an eye on profitability. It is the management company’s mission to navigate that tension.

Read the full article on costar.com.