Hotel Renovation Checklist: How You Could Plan Your Next Commercial Investment

Our tourism industry is booming. Last year, inbound visits to the UK were at their highest recorded level. And 2024 was the first year since the Covid-19 pandemic that visitor numbers exceeded 2019 levels[1].

In 2024, overseas residents made 42.5 million visits to the UK, compared to 38 million visits in 2023, spending £32.5bn in the process. Internally, British residents made 105.6 million overnight visits within Great Britain, themselves contributing billions to the economy.

The UK tourism industry was boosted in recent years ironically enough by the pandemic. As international travel became difficult, staycations emerged. Brits elected to explore their own country’s potential for holidays and this boosted demand for short-term lets and Airbnbs[2].

While many property investors have likely done very well off the back of that demand, it may prove to achieve the same results over the coming months. Currently, a Short-term Let Accommodation Bill is making its way through the Commons. It aims to introduce more stringent licencing and marketing rules in the short-term let market[3].

As such, property investors exploring their tourism options may choose to look into more traditional hotel options. Renovating and upgrading a hotel may be easier than purchasing an Airbnb property outright. But before they progress, they should ensure they have a hotel renovation checklist at the ready.

Hotel Renovation Checklist – The Key Points

Harris Evolution[4], the refurbishment contractor specialising in commercial projects, produced a comprehensive hotel renovation checklist. It notes hotel refurbishments are not easy. But by adhering the following steps, property investors may have the best chance of benefiting from a hassle-free process:

Preparation and Planning

1. Consider the brand strategy: The hotel in question should follow an identifiable brand and values
2. Speak to the team: Investors should work closely with those who will be interacting with the new facilities on a daily basis. Gathering these insights can help identify key pain points
3. Gather customer feedback: Investors need to ensure any proposed renovation works will be right for the guests of the hotel. Ideally, existing customer bases should be retained, while new customers are attracted to the business at the same time
4. Define renovation objectives: When all this feedback is gathered, it should be factored into a robust business plan
5. Set a budget: Based off the objectives, a clear budget should be set. This will help avoid spending too much capital on the project. In turn, contractors and advisors will be able to offer estimates based on the objectives at hand
6. Find a design and build a team: With a budget in mind, investors can then build the team they’ll need to get the renovation started. This may include architects, interior designers, consultants and contractors, project managers etc
7. Complete a site survey: With a team assembled, investors can then start gathering quotes. But, before they ask for prices, a site survey should be completed and contractors can help with this
8. Consider sustainable options: By aiming to reduce one’s carbon footprint as much as possible, investors can save money in the long-term, and reduce environment degradation
9. Engage with a hotel technology consultant: Smart technology usage can dramatically help energy management through to room servicing. It’s better to get this sorted at the beginning of an investment rather than retrofit solutions

Design and Execution

10. Work out a phasing plan: Where possible, renovation projects should be completed outside of busy periods. Key dates should be noted, and investors should plan backwards from them
11. Refine the scope of works: An architect should produce visuals of the proposed works. This will help keep agreed concept designs front and centre throughout
12. Ensure funding is available: This is where we come into play. By this stage investors should have a clear, agreed budget and a defined scope of works. Before progressing further, they need to ensure they have funding secured for the works that will work with the timelines involved
13. Set a programme of works: This involves the tendering or negotiation process. The contractor involved should provide a detailed programme of works which will highlight key milestones and specify an anticipated completion date
14. Keep staff informed: As renovation works can be disruptive, it’s important to maintain solid communication lines with the hotel’s staff and management team
15. Communicate to customers: Any guests of the hotel should know in advance how the works could affect them and which areas of the hotel may be off limits while they’re being worked on
16. Project meetings: Good communication with design and building teams should also be maintained. Regular meetings should be scheduled to ensure the overall project stays on track

Launch and Post-Renovation

17. Be sure to create excitement: Given how much investment will be going into the renovation, it’s worth generating as much excitement as possible about its completion to make sure it pays off
18. Have a launch party: All the hard work should be celebrated. An opening ceremony may help spread the word of this new and improved hotel. Local PR firms could be included in the guest list

Milkris Interiors also has its own simplified hotel renovation checklist and guiding points. Following a similar trajectory, it advises[5] a hotel renovation project should begin with a through assessment of what needs improvement, and then budgeting for those improvements.

From here, investors should select a design theme, make sure they minimise guest disruption as the plans progress, and ensure they stay on the right side of compliance and safety rules. Contractors and advisors can help with all this.

Frequency of Your Hotel Renovation

Those who are particularly focused on timings can base their plans around how long they are likely to take. Creating hotel renovation checklist that’s specifically centred on timings is possible with a bit of prep work. Milkris Interiors breaks down the following realistic timescales[6]:

• Cosmetic refreshes such as replacing furniture: 3 – 5 years
• Major renovations such as updating pluming or electrics: 7 – 10 years
• Technology upgrades such as in-room entertainment systems: 3 – 5 years
• Reposition the hotel in the market such as making investments to take it from three-star to five-star: 10 – 15 years

Thankfully, it is possible to get ahead of what trends are emerging in the market, which can help investors when they devise their hotel renovation checklist. According to analysis from Bloomsbury, the UK hotel market at large is shifting towards more sustainability and energy efficiencies.

Also, technology and smart guest experiences, multi-purposes spaces, and the reimagining of boutique properties and heritage sites are all proving to be popular ways to go in the market[7].

Why It’s Worth Creating a Hotel Renovation Checklist and Getting Invested

The success of any property investment will depend on the borrower’s circumstances, and we will never guide our borrowers on how they should invest. Professional investment advice should be sought for this, but the hotel industry does have a lot going for it in the current market.

According to Rightmove[8], hotel investment is now at the highest level seen since 2018. Meanwhile, the latest RSM Consumer Report shows 28% of brits are planning a long-stay UK holiday, while 33% are planning a weekend away in 2025[9].

Looking ahead, Mordor Intelligence[10] forecasts that the UK hospitality industry could experience a compound annual growth rate (CAGR) of 3.51% between now and 2030. This would take its current size from around $61bn now (circa £45bn) to $73bn in 2030 (£55bn).

There are rewards in this market, but they won’t come without cost. A recent EMEA hotels monitor report from Rider Levett Bucknall (RLB[11]) found that hotel construction costs in the UK are substantially higher than those found across much of Europe.

Thankfully, our Permitted & Light Development Bridging loans can stretch up to £20m and be used for a broad range of renovation or conversion projects. Should borrowers plan to expand into new and exciting commercial markets, we can offer tailored support.