Why should you refurb your tourism asset?

My experience is that too often hotels reluctantly undertake a refurb investment much later than they should have.

I’ve experienced ongoing customer feedback suggesting certain areas need upgrading and instinctively one is hesitant to spend unless it’s absolutely necessary.

I understand the hesitancy of hotel owners towards investing in upgrades when customer feedback suggests it is necessary.

However, customer feedback is a highly valuable indicator as to where and when a hotel should refurb. Further, I strongly recommend conducting a twice-yearly inspection of your product by the owner and manager where you sight a minimum of 10% of total rooms, as well as all public-facing and back-of-house areas, providing you with a comprehensive outlook of the status of your asset.

Ongoing refurbishment investment is important because:

  • It helps to keep your asset up-to-date and attractive to your customers – aiding occupancy and room rate performance.
  • It can help to increase the value of your asset.
  • It can create new borrowing potential, through a positive revaluation result.

How do you fund a refurb?

Funding a refurb project can be accomplished in a few different ways.

  • Conduct a feasibility analysis to determine the trading upside to occupancy and room rate that could be achieved from the refurbishment. This can increase borrowing potential.
  • Investigate valuation increase potential off the back of strengthened trading projections and potential higher valuation outcome. This can increase borrowing potential.
  • Lastly, scrapping the remaining value of depreciable assets can help offset the cost of the project.

Before you embark on a refurb, it is important to understand which upgrades will have the most positive impact.


Room at Mount Gambier Hotel prior to refurbishment
Room at Mount Gambier Hotel after refurbishment

Transform Your Business with Hospitality Consulting That Dares to Care

Loftus Business Advisory brings the expertise, exposure, and knowledge you need to regain control of your hospitality business. Don’t struggle alone. Contact us today and find out how we can help you succeed.