HMH CEO reveals Capex strategy at The Hotel Show

HMH – Hospitality Management Holdings’ CEO has addressed hotel sector capex issues at this week’s The Hotel Show in Dubai. 

Laurent A Voivenel
Laurent A Voivenel

Laurent A. Voivenel shared strategic insights and trends in hospitality investment and refurbishments at the event’s Vision Conference, part of a panel chaired by Mr Catalin I. Cighi, managing partner, Cain Hospitality Innovation (CHI) and featuring Ms Annamaria Lambri, Associate Professor of Architecture & Interior Design from American University in Dubai among other experts.

Voivenel stressed that in an era of tight capex budgets, “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,” he said.

“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.”

He added: “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 programs, 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 programs.”

More lodging projects broke ground in certain markets in the Middle East as traditional lenders eased restrictions on construction loan originations. There are 183 hotel projects and 54,000 hotel rooms in the UAE pipeline currently. 10,000 new hotel rooms will open in Dubai throughout 2016.

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