May 2018 Digital Issue

change can actually make
real sense from the standpoint
of communicating
the message to guests that
something really is different
and new at the hotel.”
And what brands do
they choose? From the
Choice portfolio, Canadian
owners have been increasingly
drawn to the Quality
Inn and Ascend brands.
“Quality has been the vast
majority of our conversions
over the last little while,”
says Leon. “When you take
a look at the reasons why
people brand at all, it’s that
combination of looking to
drive up their revenue and
get access to really good
loyalty and central-reservation
systems — good brands
that can attract more guests
and drive up both occupancy
and ADR.”
However, in order to
reap these benefits, there
is a significant amount of
planning that must take
place. Toronto-based Palm
Holdings has built a significant
portion of its Canadian
portfolio by acquiring
and converting existing
hotels. The company’s
strategy is to try and have
a new brand selected for a
property prior to closing a
transaction, although Rajan
Taneja, director of Palm
Holdings, notes “in probably
50 per cent of cases, we
chose the brand after
because we had a few more
brand options.” In these
situations, the company
takes the time needed to
examine all opportunities,
which may mean choosing
the brand after it has closed
on the property.
“We choose the brand
based on availability in
the market, distribution
from the reservation
system in that market and
the construction costs to
ensure we’re getting the
right return on our investment,”
Taneja explains. The
structure of the hotel, room
sizes and service level of the
hotel are also taken into
consideration.
As Taneja points out,
conversion projects can
still carry hefty price tags.
“When we do a renovation,
we’re looking at keeping
these properties for a longterm
hold. We go in and
change everything — furniture,
fixtures, equipment;
we change the roof, we redo
the outside and all HVAC
is changed,” he says, adding
that laundry, pool and other
large equipment is replaced
on an as-needed basis. “In
some cases, we’ve actually
spent more money on the
renovations than we did
acquiring the hotel.”
To mitigate some of this
cost, Palm Holdings opts
to continue operating its
hotels under its original
brands through the conversion
process. “On every
property we have ever
renovated, we continue
operating the hotel while
doing that renovation,”
says Taneja. “That can be
a bit of a challenge when
you don’t have a complete
(clockwise from top) The Kimpton Saint
George in Toronto; Holiday Inn Orlando
SW; the Champlain Waterfront Hotel in
Orillia, Ont.
38 MAY 2018 HOTELIER hoteliermagazine.com