The CEO of HMH – Hospitality Management Holdings, Laurent Voivenel spoke at the recent Vision Conference, which took place during The Hotel Show Dubai, and shared valuable hospitality insight and trends in investment regarding new projects as well as refurbishments.
Referring to the current era of tight capex (capital expenditure) budgets, Voivenel explained: “A strategic approach is needed to ensure investment is maximised to positively impact both operational performance and capital value. A well thought out and executed capital expenditure strategy in the form of a Hotel Improvement Plan can propel a hotel ahead of its competitive set. There are a number of considerations including age of asset, legislative regulations/changes, emerging consumer preferences and competitive positioning in the market that influence the way in which capital expenditure budgets are directed. Extended period of trading at high occupancy levels heightens the need for refurbishment.
“Often hotel owner and operator capex priorities have not always been in alignment and in many cases at odds. A collaborative approach, whether for soft refurbishment or extensive upgrade programmes, is required to plan for improved trading performance, adaptation to technology advances, changes in consumer trends and compliance with legislation. Typically, operators and investors work on seven year cycles for room refurbishments and five-year cycles for food, beverage and public areas, but this can be extended with well-designed, high-quality fit-out and rolling maintenance programmes.”
In various markets in the Middle East, more lodging projects have broken ground as traditional lenders eased restrictions on construction loan originations. Currently there are 183 hotel projects and 54,000 hotel rooms in the UAE pipeline, and 10,000 new hotel rooms will open in Dubai throughout 2016.