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  • Design Strategy and a Return on Investment

    Daniel Fountain
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    A Design Strategy is concerned with how the interior design of an Hotel can meet the hoteliers’ objectives of marketing, business, branding and organisation. The ways in which it can do this are many, and range from the clever use of space planning that may require less staff on duty through the careful use of colour to re-enforce branding to developing an easily recognisable scheme that promotes customer loyalty, as with the Park Inn brand. It seems to the writers that the ROI on design could be as much as 30% a year from bedroom refurbishment alone, as our ROI calculator shows. It is obvious that the ROI on all aspects of the operation are looked at and the necessity of refurbishment and keeping a property looking good can often conceal the fact that this also generates a good ROI. That this is a necessity is unquestioned as this recent statement from Barclays Corporate illustrates. Meanwhile design groups promote to hoteliers the contribution of design to profitability and the necessity of it is relayed from hoteliers to shareholders. Is this done by faith, hope, experience or is it just habit?

    The high level of finance and procurement organised for many projects would certainly indicate that both the investors and the design consultants involved in the project must have a keen belief in the financial return gained from the project. In projects run in the 1980’s by the Forte project office, designers would find attached to their brief a formula for them to work out the percentage return from an increased room rate earned through the refurbishment.

    This was a salutary reminder to the designer of the need to stay within budget as well as a clear indicator that the Forte family were well aware of the need to calculate an ROI on design costs. Interestingly the Forte family are currently developing hotels at the higher end of the market, promoting the Rocco Forte chain as the most luxurious chain in Europe. Obviously there is no doubt here of the ROI from a high design product.

    Generally, however, there seems to be an absence of facts, and the subject appears rather woolly. There is often only the simplest acknowledgement toward it in design terms. There are many articles and reports on ROI that report and track the overall profit of a brand or property, but how much of this is able to be pinpointed as coming from design and not, say, from a media advertising campaign, or the introduction of new technology to meeting rooms?

    Whilst hotels do leave out comments cards, one wonders how much guests actually use these. Are they used to make complaints that guests don’t feel able to level face to face in reception? Are they left in cardboard boxes in the general office without analysis? Very few hoteliers survey customers about specifics concerning the design of the hotel, so is the only feedback related to the design of the hotel gleaned from Tripadvisor reviews or trade magazines like HotelDesigns?

    Daniel Fountain / 08.11.2013

    Editor, Hotel Designs

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