The selection of effective capital expenditures is critical to the short and long term value of the hotel. Strategic hotel capital planning is needed to insure that cash reserves will be sufficient when the required improvements are required. Short and long-term planning is needed to insure that cash reserves will be sufficient to meet the cost of improvements to be made, as scheduled, to maintain (and enhance) the value of the hotel.
JHS will work effectively with the owner to establish the amount of reserves that should be set-aside for capital expenditure on an ongoing basis. While a general rule of thumb for the level of repairs and maintenance, is approximately 3-4% of hotel’s revenue, this amount can vary with the age of the property, and declining revenue levels.
Each year, JHS updates a short-term and long-term capital plan for each of our client hotels. A complete report is presented to ownership for assistance in assessing upcoming capital improvement planning. This ensures that you, as the owner, are not faced with unexpected capital expenditures.