RECENT FORECASTED HOTEL FORECLOSURES OFFERS HUGE OPPORTUNITIES TO THOSE OF US WHOSE BUSINESS IS TURNKEY TURNAROUNDS.
A recent example allowed us to conduct a brand analysis on an aging property, select from amongst ten brands, select three for a short list and deliver increased profits of $50 million GOP over ten years..........just with the choice of the Brand and a strategic re-positioning. Profits will more than double after the reno, but will quadruple if the expansion proceeds.
No it's not Rocket Science but who would build a rocket without a rocket scientist?
A launched hotel with the wrong engine going in the wrong direction will in fact cost as much as the rocket fired in the wrong direction. It will never get there!
And yet time after time, developers make the decisions on the launch criteria without the Hospitality Scientist and the technicians that determine the direction.
Case Study Number One. A major chain operated hotel in the Caribbean was closed for a major $100 million renovation and re-opened under the same brand that had been there for +/- 40 years. It was opened as a new project and not re-positioned. It is a financial disaster and the owner is searching for ways to re-coup his losses.
Case Study Number Two. A major chain operated hotel in Africa faces a major $60 million renovation and will be re-launched under the same brand that has been there for +/- 40 years.
Ironically the same brand operates both hotels and in both cases, the hotels are government owned. In both cases, there is no intent to change the brand/operator. They are emotionally and historically tied to the brand where brothers, sisters, daughters and sons have graduated, been married, feted and celebrated for four decades.
Case Study Number Three. A major chain operated hotel in Asia plans a major $45 million renovation and will be re-positioned under a new, upmarket brand, shedding its' ties to the old one and will benefit as I have described in the title above, resulting in a project that will once again become to market leader.
This hotel is also government owned and was also emotionally and historically tied to the original brand where brothers, sisters, daughters and sons graduated, married, feted and celebrated for four decades. The difference was that the latter contacted the David McMillan Group and listened. They had agonised over the decision for a couple of years and made the courageous decision to contract an outsider to assist them through the analysis and the decision.
Case Study Number Four. A government owned, run-down, partially closed independent hotel and convention centre in the Caribbean seeks a partner to invest, renovate, brand, re-launch, operate and maintain.........and wonders why there were no answers to their RFP.
All four Projects were referred to the David McMillan Group but only one, so far has listened and listened carefully. At times the terms I used were foreign, misunderstood and complicated to comprehend within the contexts of their worlds. But they listened, they learned and they made the decisions that were needed. They all now understand those terms and the science behind their use.
Here are the fundamentals of our One Stop Shop 'Turnkey Turnarounds'
- Current Brand Position vs Ideal Brand position.
- Brand Options.
- Selection Criteria & Weighting.
- LOI & Business Terms.
- Scope of renovations required & preliminary costing.
- Brand scoring.
- Risk analysis.
- Final negotiations.
- Renovation Planning & Design.
- Construction & Fit-Out.
- Deficiency management.
It is interesting to note that the first four points are very often excluded from so many projects and yet they actually fuel the rocket that is expected to keep going for some 30 plus years.