CAPEX
230 | Funding CapEx: New report tells what it takes for hotels to stay competitive
CAPEX
More than 20 years ago, a team of hotel industry consultants and asset managers got together to figure out how much hotels in the U.S. spend each year on property improvements and maintenance.
The idea was if owners and operators know in advance what it will cost to keep a hotel property up to date and in good working order, it would help them put the right amount of cash in reserve to deal with the expected ,as well as the unexpected.
In 1997, David Berins and Peggy Berg produced the industry’s first CapEx study. They recommended hotels increase their capital reserves from 3 percent, to 4 percent, to afford pending property improvement plans and inevitable equipment replacements.
Today, that 4 percent is still regarded as an industry standard. But modern day consultants say the reserve benchmark is woefully underestimated and CapEx planning is so much more complex than it was two decades ago.
So how are hotel owners and managers supposed to plan? And by how much?
In this episode, Lodging Leaders explores the latest CapEx report researched and published by two organizations – the International Society of Hospitality Consultants and the Hospitality Asset Managers Association – with the help of STR.
We feature David Berins of Berins & Co., who says he coined the CapEx abbreviation. We hear from Alan Benjamin of procurement firm Benjamin West, who has co-chaired the past several CapEx studies. And we talk to Matthew Hick of Access Point Financial, a specialty hotel finance company that lends for FF&E projects.
Resources and Links
To buy a copy of “ISHC CapEx 2018: A Study of Capital Expenditures in the Hotel Industry” visit ISHC.com.
CAPEX
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342 | Live Long and Prosper: Hospitality industry embraces senior living
Since she was a teenager volunteering at senior-living facilities in Boston, Serena Lipton knew she wanted a career in senior housing. But she had a difficult time finding the college program she believed would educate and prepare her to serve in the senior-living industry. After graduating from Boston University School of Hospitality Administration and working as an analyst for JLL’s Senior Housing Valuation Advisory, Lipton finally found what she was looking for. This fall she enrolled in BU’s Master of Management in Hospitality with a new concentration in senior living. She and other students are on the cusp of what BUSHA believes is a massive shift in how Americans view aging and where opportunities lie for the hospitality industry.
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341 | One Big Happy: Travel survey reveals how hotels can attract families
Rainer Jenss of Nyack, New York, founded the Family Travel Association seven years ago to help parents and caregivers introduce children to the world through travel, whether that’s a yearlong trip around the world that Jenss and his family took or a weekend getaway to a nearby destination. To help the travel industry gauge what parents want when they take their kids on vacation, FTA conducts an annual study. The U.S. Family Travel Survey 2021 reveals the shift in mindset the COVID-19 pandemic has created in families planning a trip over the next 12 months. Hoteliers use can use the information to generate business and boost their strategies to recover and sustain business now and other the coming months.