Close
Mobile Full Width Tablet Small Desktop
  • Home
  • About
  • Services
  • Listings
    • All Listings
    • Hospitality
    • Sold
    • Land
  • News
  • Resources
  • Contact
Contact Brian Resendez, CCIM at [email protected] or call (503) 577-7710
  • Home
  • About
  • Services
    • Buyers
    • Sellers
    • Foreign Investors
    • Resources
  • Listings
    • All Listings
    • Hospitality
    • Sold
    • Land
  • News
  • Contact
  • Register

Hotel CapEx slated to be at record numbers through 2024…

Hotel CapEx slated to be at record numbers through 2024…

December 30, 2021 8:41 pm

As we begin to pick up the pieces from the effects that Covid-19 has had on the hotel industry we are confronted with a new set of challenges and opportunities. Three approved vaccines, pent-up need for travel and the desire to get back to a sense of “normalcy” will all lead to a much-needed rehabilitation for all facets of travel. While hotels have seen only a fraction of normal wear-and-tear on their interiors, elements like roofs, HVAC and other exterior pieces have been maturing normally and need their scheduled maintenance and upkeep. According to the U.S. Lodging Industry Capital Expenditures Trend Analysis Report by Bjorn Hanson, capital expenditure spending is forecast to increase by approximately 70% in 2022 and is slated to be at record numbers through 2024.

The factors leading to this expected expenditure increase of CapEx are discussed in Alan Benjamin’s (IHSC) article: Special CapEx Considerations for the COVID-19 Era.  According to Benjamin, there are four major components at play:

  • The emergency reallocation of CapEx funds for many hoteliers in 2020. According to Benjamin, many lenders granted permission to use the 4% CapEx reserve for more immediate expenditures.
  • The scheduled CapEx needs of hotels opened or renovated in the past 5-7 years are coming due.
  • The importance of optics and the perception of cleanliness for guests who are becoming more discerning and critical along with having access to instant feedback and rankings on social media.
  • The swift reinforcement of brand standards following the relaxed regulation during the height of the pandemic.

All these circumstances put together are projecting a record-breaking injection of CapEx in the near future. According to a recent article written by Harvey Chipkin- HNN contributor, the following areas are being prioritized for capital expenditures in 2022 (ranked from most-to-least): deferred maintenance, further reconfiguring of food and beverage outlets, compliance with brand standards, increased high-speed internet capacity, electronic door lock and access systems, and further enhancements to health systems and practices. (For more specifics, read the full article on costar.com) 

To make the matter of CapEx and improvements more complicated is the supply chain crisis that is affecting not only FF&E but many other products around the world. To this Benjamin offers words of encouragement:

“Is it overall the most difficult supply chain to navigate that I have seen in 30+ years? In a word, yes. However, one has to be careful to not be overly negative; the supply chain is open, with millions of dollars in FF&E and OS&E still being purchased, shipped and installed every day. While things are certainly taking much longer, they are still getting done.”

Benjamin suggests that hotel owners need to be more proactive in their procurement of supplies and to set plans and teams well in advance for these upgrades and similar undertakings:

“This is a time to be flexible, creative and, most importantly, calm. A level–headed approach to projects, collaboration as a project team and “overcommunication” has never been as important. Remember, if “Plan A” does not work, there are 25 more letters in the alphabet!”

            Although the amount of travel hasn’t reached pre-Covid numbers, people are still driven to get out, vacation and meet each other face to face. This need will be the primary drive for the next cycle of CapEx and is likely to lead to record numbers. With brands tightening up on their requirements, regularly scheduled maintenance and maintenance that was deferred due to the pandemic, and supply chain issues, many hotel owners will need to prioritize and should be prepared to make necessary repairs or upgrades.

Please follow & like us :)

Facebook
fb-share-icon
Twitter
Visit Us
Follow Me
LinkedIn
Share
Follow by Email
RSS

Resources

  • News
  • Contact Us

“

We had a vision for our next adventure in hotel ownership and it needed the right person to guide us in acquiring a property that would make our dreams come true. Brian made that happen for us. Brian was a great listener and helped negotiate a sale that was a fit for our unique needs. Brian was responsive and kind – we felt like we were always his top priority!

 

Melanie Prummer, Peace at Home Executive Director - Buyer

“

Brian Resendez was my personal broker for the sale of two motels that I sold. One sold in March of 2010 and one sold in March of 2011. In selling these motels he showed great skill and professionalism, which was needed, in order to sell these motels in a down market that exists today. Brian was very aggressive and knowledgeable in getting these motels sold in a timely manner.

Charles C. Hagel - Motel Owner

“

Very difficult deal – estate (foreign beneficiary) and three buyers. Best way to describe it is:  “Maze”. But we made it. Brian was instrumental in bringing it together.

Roger Reif - Attorney

“

It was a great pleasure and experience to work with Brian for our very first property purchase. At times negotiations with the sellers were challenging, but we always found Brian to be super-responsive, professional, and helpful. His office was prompt to communicate with sellers, follow-up with third parties, put together additional documentation, or dig up information. Anything that was needed to keep the ball rolling- Brian and Michelle were on it. 

We highly recommend their service, and it will be a pleasure for us to work with Brian and his team when we get our next opportunity.

A. A. - Buyer

“

I appreciate your service, continued support and marketing effort that you have made on the Redwood Hotel project in Grants Pass, OR. The brochure and marketing information that you have compiled for this property is excellent. I look forward to extending our business relationship.

Don Hayes - Hayes Brokerage, Inc.

“

Our experience with Brian Resendez from SVN Hotels was excellent. Brian not only went the extra mile to make sure we got this deal done, he also gave us honest advice. The process from start to finish was one of the smoothest experiences we have had with an acquisition. I hope to have the opportunity work with Brian and his team on future deals. 

S. P. - Buyer

“

My experience with Brian Resendez was nothing short of professional. We had a challenging year long transaction and he completely kept me and the process on track and got us all to the finish line. Brian was always a wealth of information above and beyond what was expected.  Thank you Brian!

John Holt - Land Investor

“

Brian is an outstanding Broker. He is diligent in his service to his clients, and he takes his responsibilities seriously. His connections are very deep in the hospitality industry. Not only does he seem to know everyone, even better, everyone seems to know him. I have won direct business through having Brian introduce me to one of his connections. Now that person is a client our ours as well. Brian is the kind of Broker, and the kind of person, with whom I enjoy doing business.

Mike Grubbe - Business Development Manager at SD Deacon

“

Brian and Michelle did an outstanding job selling Bonneville Hot Springs Resort for us. We had requested that our property sale be done in a completely confidential manner so it did not interrupt our daily flow of business. They created beautiful collateral that represented our property very well and kept it current and complete. They made themselves available to tour the property for all interested parties in a non-invasive manner so we could continue to do business without neither guests nor staff being aware of the property being for sale. We would recommend Brian Resendez as a superbly competent realtor to anyone interested in selling their commercial property.

M. S. - Seller

“

After researching and interviewing several leading NW hospitality brokers, it was very clear to us that Brian Resendez was the best choice.  Marketing a partial interest in a unique hospitality property presented an unusually challenging situation for any veteran broker.  Brian’s experience, creativity, hard work, patience and personal care led to a successful outcome for all parties.  We highly recommend Brian Resendez and his capable team.

Jim and Wendy Inkster -

Contact Us

Office

4915 SW Griffith Drive, Suite 300
Beaverton, OR 97005

Phone

Cell: 503-577-7710
Fax: 503-821-7935

Email

[email protected]

 

Get Social

© 2023 Copyright NW Hotel Investor | Brian Resendez is a real estate broker in Oregon and Washington licensed with SVN, which is an independently owned and operated SVN Office specializing in Commercial Real Estate transactions. Northwest Hotel Investor is not affiliated with SVN International. For the Oregon Real Estate Agency Pamphlet click here. | For the Washington Real Estate Agency Pamphlet click here. | Site by Deep Root Design