by Cheryl-Anne Sturken | December 23, 2011

In the past three months, several hotel companies have announced a slew of sweeping renovations projects for 2012 that will see some properties getting an injection of capital practically equal to the GNP of a small nation. With the current development pipeline reduced to a crawl, it's a deliberate and necessary strategy by hotels as they prepare to command higher room rates in the months ahead.

"Hotel companies were sympathetic to hotel owners during the economic downturn and relaxed brand standards," says Jan Frietag, senior vice president global development, for Hendersonville, Tenn.-based Smith Travel Research. "That's not the case anymore. Now they are demanding that hotels meet brand standards or risk getting cut." That's good news for planners who can expect to see an explosion of renovations over the course of the next several months, aimed at the rejuvenation of some tired meeting hotels. According to Portsmouth, N.H.-based Lodging Econometrics, which measures the hotel real estate investment market, an average 420,000 rooms are renovated per year, but that number is expected to almost double in 2012, thanks to pent up demand. In addition, says Bruce Ford, senior vice president, the competition resulting from these renovations will act as a catalyst for the hotel development pipeline, which is expected to pick up in 2013.

Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports, estimates that renovations and upgrades to lobbies, bathrooms and bedrooms will be around $3.5 billion this year, or 30 percent more than 2010. This unprecedented flurry of capital improvement projects to spruce up properties, says Hanson, marks the first significant increase in hotel renovation activity since 2008, when hotel upgrades topped $5.5 billion, an necessary one if hotels expect to stay competitive in an increasingly crowded field.

Among major projects expected to wrap up in early 2012 are a $45 million overhaul for the 458-room Hilton McLean Tysons Corner in McLean, Va., which will include the addition of a 3,000-square-foot ballroom and increase the hotel's meeting and event space to 30,000 square feet, and a $30 million renovation of the 544-room Capital Hilton in Washington, D.C. Both projects are part of a three-year, $3 billion brand rejuvenation currently underway across Hilton Hotels & Resorts global portfolio. Two Hyatt hotels unveiling transformations next year are the 659-room Grand Hyatt San Francisco, which will add 7,000 square feet of meeting space, and the 533-room Hyatt Regency Minneapolis, which this month announced a $25 million renovation expected to be completed by spring 2012. Also unveiling a new look next is the 383-room Fairmont Copley Plaza in Boston, which is undergoing a much-needed $20 million overhaul.

I look forward to seeing the results in the New Year. Happy holidays to all!