Navigating Caribbean Renovations: Overcoming Hurdles in Hospitality

Navigating property-improvement plans (PIPs) presents a unique set of challenges for Caribbean hotels, encompassing factors such as supply chain logistics, adverse weather conditions, financing complexities, and regulatory compliance. These hurdles were underscored during a panel discussion at the Caribbean Hotel & Resort Investment Summit, where industry experts shed light on the multifaceted nature of renovation projects in the region.

Louis Alicea, senior director of development for Latin America and the Caribbean at Wyndham Hotels & Resorts, emphasized the unpredictable nature of Caribbean operations, where unexpected challenges often arise, invoking Murphy’s Law at every turn. The imperative of reliability and resilience is echoed by Juan Mosseri of E-Finity, who stresses the importance of safeguarding properties against potential disruptions caused by natural disasters, particularly hurricanes.

Securing adequate financing poses another significant obstacle for hotel owners, with Bill Clegg, regional director of franchise development at BWH Hotel Group, highlighting the common scenario where owners find themselves scrambling for funds when faced with mandatory PIPs. The challenge intensifies for those considering property acquisition, as the need for renovation financing becomes a pivotal negotiation point.

Before embarking on a renovation project, owners must meticulously evaluate the return on investment and occupancy projections, advises Alicea, emphasizing the importance of engaging third-party consultants to assess feasibility. Compliance with brand standards adds an additional layer of complexity, with each brand imposing specific requirements that must be meticulously adhered to, as underscored by Mark Purcell of Purcell Hotel Advisory Services.

Despite the stringent requirements, there exists some flexibility in implementing PIPs, particularly for soft-branded properties. Mark Purcell notes that negotiation is key, with owners leveraging growth opportunities to push back on certain aspects of the plan while ensuring alignment with brand promises.

Navigating local regulations presents yet another challenge, with Mosseri highlighting the jurisdiction-specific energy regulations prevalent in the Caribbean. Brands, such as BWH Hotel Group, prioritize compliance with local codes and aim to integrate local culture into their properties, ensuring authenticity and adherence to community standards.

Amidst these challenges, transparency and communication between brands and owners are paramount, emphasizes Alicea. Educating clients about the intricacies of PIPs is crucial to avoid legal ramifications and ensure a smooth renovation process. As the industry continues to evolve, informed decision-making remains pivotal in navigating the complexities of property-improvement plans in the Caribbean.