The Long-Term CapEx Plan

As we have seen, effective asset management requires a long-term plan for capital expenditures. The goal is to prepare a 25- to 30-year plan that encompasses the total CapEx needed to replace all the fixtures, furniture, and equipment in kind and to reinvest in building infrastructure as the property ages. This means replacing what was in the hotel as constructed, without any additional work. This creates a benchmark for long-term CapEx planning and for cash planning. The long-term plan results in a year-by-year, area-by-area summary of the scope and cost of renovations.

The long-term plan is created by:

Preparing an inventory of all items within the hotel that need to be replaced over the analysis time frame
Estimating the useful life of each item
Estimating the cost of replacement at the end of the useful life

Clearly, this is a lot of work, but it is worth it to obtain a defensible, workable, long-term budget.

Below is an example of a detailed plan for a guestroom and guest bathroom. Hover over the red icons for more information on particular items in the report. You can download this report on the next page.

Data from JN+A and HVS Design, Hotel Cost Estimating Guide, 2016. Published by Jonathan Nehmer + Associates and HVS Design.

Upscale Hotel Renovation Cost Guideline - Guestroom Renovations
Guestroom Softgoods Renovation	RANGE			AVERAGE	LIFE (yrs)
Assume guestroom area of approximately 13' x 24', plus 6' x 8' bathroom and 5' x 7' entry / closet area = 389 SF. Ceilings 8'-6" AFF, painted drywall.					Replacement cycle for each item (years).
Demolition	$220	to	$382	$313	-
FF&E Installation	$292	to	$329	$312	-
Artwork, Mirrors and Accessories (Installed Package)	$327	to	$425	$370	6-8
Full-height Framed Dressing Mirror	$157	to	$191	$175	12-13
Bed Skirt or Box Spring Cover	$150	to	$180	$165	6-8
Decorative Pillow	$60	to	$75	$70	6-8
Carpet and Pad	$646	to	$745	$693	6-8
Rigid Vinyl Base	$263	to	$403	$326	6-8
Desk Lamp	$120	to	$150	$137	6-8
Floor Lamp	$230	to	$280	$257	6-8
End Table Lamp	$190	to	$230	$210	6-8
Nightstand or Bracket Lamp (2)	$285	to	$345	$315	6-8
Welcome Light (in Existing Location)	$180	to	$230	$201	12-13
Desk Chair (incl Fabric)	$220	to	$270	$247	12-13
Lounge Chair (incl Fabric)	$360	to	$440	$400	12-13
Ottoman (incl Fabric)	$105	to	$130	$117	12-13
Sleeper Sofa (incl. Fabric; assumes K rooms only)	$330	to	$400	$365	12-13
Paint Textured or Drywall Ceiling	$203	to	$258	$219	6-8
Paint Trim (Base and Crown)	$99	to	$171	$131	6-8
Paint Entry Doors, Closet Doors, Frames, and Grilles	$239	to	$382	$302	6-8
Vinyl Wallcovering (LY 54")	$810	to	$1173	$990	6-8
Window Treatments (Sheer, Blackout, Hardware Installed)	$500	to	$610	$553	6-8
Guestroom Softgoods Renovation Cost Per Key	$5893		$7799	$6869

Guestroom - Add for a Full Renovation	RANGE			AVERAGE	LIFE (yrs)
Casegoods Installation	$53	to	$70	$61	-
Bedsets (Box Spring, Mattress and Frame)	$780	to	$945	$865	6-8
Headboard	$975	to	$1200	$1090	12-13
Nightstands	$405	to	$495	$450	12-13
Dresser	$510	to	$630	$570	12-13
Desk	$550	to	$670	$610	12-13
Side Table	$200	to	$250	$227	12-13
Coffee Table	$190	to	$235	$213	12-13
Closet Shelf Unit	$90	to	$150	$112	12-13
Refrigerator Cabinet (Case Piece only)	$740	to	$910	$827	12-13
Mini Refrigerator	$200	to	$250	$227	12-13
Welcome Center / Coffee Niche	$578	to	$681	$632	12-13
Crown Molding	$614	to	$780	$703	12-13
Drapery Valance - Painted Wood	$157	to	$248	$207	12-13
Entry Area Hard Surface Flooring	$525	to	$686	$612	12-13
TV and Mount (HD LCD, incl. Programming, Allowance)	$916	to	$1035	$975	6-8
Guestroom Full Renovation Additional Cost Per Key	$7484	to	$9235	$8380

Guest Bathroom Softgoods Renovation	RANGE			AVERAGE	LIFE (yrs)
Demolition	$90	to	$210	$129	-
Artwork (Installed)	$81	to	$110	$96	6-8
Lighted Mirror	$440	to	$610	$513	6-8
Makeup Mirror	$145	to	$200	$168	6-8
Night Light	$69	to	$94	$83	6-8
Towel Caddy	$259	to	$315	$283	6-8
Paint Ceiling	$25	to	$33	$29	6-8
Vinyl Wallcovering (LY 54")	$213	to	$269	$236	6-8
Shower Curtain and Hooks	$40	to	$50	$47	6-8
Curved Shower Rod	$62	to	$101	$82	6-8
Paint Door and Trim	$116	to	$138	$129	6-8
Regrout Floor Tile	$90	to	$247	$160	6-8
Regrout Wall Tile	$95	to	$261	$170	6-8
Guest Bathroom Softgoods Renovation Cost Per Key	$1724	to	$2638	$2124

Guest Bathroom - Add for a Full Renovation	RANGE			AVERAGE	LIFE (yrs)
Additional Demolition	$590	to	$1004	$782	-
Architectural Lighting	$157	to	$212	$185	12-13
Replace Bathroom Door and Hardware	$551	to	$587	$561	12-13
Electrical Upgrades (Add One GFI Outlet)	$63	to	$83	$75	-
Tub-to-Shower Conversion-New Pan, Surround, Valve, and Shower Head	$2226	to	$3215	$2793	-
Shower Valve and Head, Tub Diverter, Tub Drain	$441	to	$567	$500	12-13
Tub Surround	$872	to	$1300	$1067	12-13
Lavatory	$235	to	$346	$268	12-13
Faucet (and Connections)	$469	to	$730	$567	12-13
Vanity Top	$496	to	$835	$685	12-13
Vanity Base	$629	to	$834	$761	12-13
Toilet Accessories	$340	to	$455	$397	12-13
Tile Flooring	$572	to	$642	$615	12-13
Toilet	$424	to	$533	$481	12-13
Guest Bathroom Full Renovation Additional Cost Per Key	$8063	to	$11344	$9738