In an environment where interest rates continue to impact priorities, shifting focus away from capex improvement and towards deploying capital to cover debt costs, many assets aren't getting the face-lifts they desperately need.
These face-lifts may be exactly what's needed to improve the value of these assets and jumpstart the transactions market. But the question remains: how to deploy capex, measure it and manage it effectively in order to get the most bang for your buck?
Experts say it's of the very importance that the end result not just improve the effectiveness of the hotel operations but also give the feeling of experiencing something special, thereby driving average daily rates.
Capex allocation should be guided so that there's an improvement in the market perception so that customers have a perceived value for the higher rates for example improving the experiential elements of a property as well as give protection to the asset in the event of any unforeseen shock to the sector.
Measuring and Managing Capex Effectively
To measure and manage capex effectively, experts recommend:
1. Conducting a thorough assessment of the asset's current condition and identifying areas that need improvement.
2. Prioritizing projects based on their potential impact on guest experience, operational efficiency, and asset value.
3. Developing a detailed budget and timeline for each project, and closely monitoring progress and costs.
4. Leveraging data and analytics to track the performance of capex investments and make data-driven decisions.
5. Regularly reviewing and adjusting the capex plan to adapt to changing market conditions and guest preferences.
By taking a strategic and data-driven approach to capex management, hotel owners and operators can ensure that their investments deliver the maximum return and create a memorable experience for their guests.
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