How To Refresh Your Hotel During COVID
Our entire hotel industry eagerly awaits the ramp-up in room night demand that should occur in the second half of 2021. Thanks to COVID-19 vaccines and declining case counts, travel in the US is on pace to open up soon and people will likely be celebrating by making up for lost time.
We’re hearing so much about the coming wave of motivated vacationers that it has produced the new term “revenge travel.” It refers to pent-up demand from frustrated travelers who have been eagerly dreaming of taking a trip for quite a while now. While this is music to our ears, it also begs a question – will your hotel be ready to make the most of this market opportunity?
Hotel Renovation – Financial Hurdles
So that your hotel can look its best, stand out from its competitive set, and capture its share of this business once it does come back, now is an excellent time for you to refresh some or all of your hotel’s interior if your property isn’t brand new. Wouldn’t you love the words “newly renovated” to describe your hotel?
Here’s the rub – a refurb that will appeal to guests in a meaningful way will require an investment in your property, but you may feel the need to hold onto your funds right now. Furthermore, most FF&E providers and direct-selling manufacturers require payment in full prior to delivery of furnishings. Is there a way you can still refresh your hotel, hold onto your funds, and avoid paying for goods in advance?
The answer is yes, if you’re working with the right partner. One partner to consider is Innvision, a trusted provider of interior design and procurement for hotel renovations, who can offer you options to help overcome these hurdles.
Hotel Renovation – Funding Accessible
Traditional financing from banks for hotel capital projects is difficult and in low supply these days. Some private equity funding is available but can be targeted at distressed hotels and often demands that you give up a big chunk of ownership. However, Innvision’s network of financing partners and specialty lenders has helped fund renovations both large and small in the current environment.
In fact, now is an excellent time to borrow money to re-invest in your property from an interest rate standpoint. Current low rates translate into manageable monthly payments, making it possible for you to come out of COVID with a great-looking hotel to show for it. When occupancy and RevPAR at your hotel come back faster than they would if you didn’t do a refresh, so does your return on investment.
Hotel Renovation – Pay After Delivery
Another challenge you might face in a hotel project is having to pay everything up front. Many procurement providers and direct-selling manufacturers require hotel owners to pay a large deposit at the outset and then the remainder of the balance before delivery.
In this case, you have no opportunity for payment flexibility or credit terms. You just send your money, hope your vendor is financially stable, and pray that your product shows up. Moreover, if your order arrives damaged or incorrect, you don’t have as much say in getting the problem fixed.
By contrast, since 2004 Innvision has extended credit to hotel owners and offers a tailored set of payment terms based on your individual needs. In other words, you can receive, inspect, and in most cases, install your FF&E in your public spaces or guest rooms for your guests to enjoy before you pay for it. In addition, thanks to Innvision’s financial stability, you don’t have to worry whether your new furniture, carpet, or other furnishings will show up when needed.
Hotel Renovation – Avoid Headaches & Hidden Liability
Many procurement companies and direct-selling manufacturers also leave out an important piece of the puzzle – remitting sales tax on your behalf. By excluding sales tax, the total price of FF&E seems lower, and since remitting tax in the correct amount to the proper taxing authority is a burden most would prefer not to bear (which shifts this burden back to the buyer), this can be an alluring business practice for FF&E sellers.
This is not the case at Innvision. Put simply, what otherwise could be a huge liability and headache for you is gone if you hire Innvision to supply your FF&E.
Innvision has the back-office infrastructure to easily track changes in sales tax rates in real time throughout the US, reflect them in our FF&E pricing, and to collect and remit the taxes due. In doing so, Innvision absorbs all of the complexity and burden associated with remitting sales or use tax that’s due in virtually all states. Although nobody likes paying taxes, you actually do want your supplier to collect taxes from you and then remit them for you.
Choosing The Right FF&E Procurement Provider
There is a growing sense of optimism about 2021 and beyond. Sprucing up your hotel and getting it ready is one of the best things you can do to prepare for a post-COVID recovery in hospitality and travel. Although funding, payment terms, and even sales tax can be obstacles when refreshing your hotel, they don’t have to be if you choose the right FF&E partner.
Contact Innvision today for a free consultation and to learn more about how you can exit the pandemic with a valuable hotel asset that looks and feels new again to you and your guests.