Let’s say you manage a portfolio of hotels under the Dreamy Stay Hotels banner. One morning, you learn that a property’s $40,000 fire pump failed – a crucial component for providing 24-hour fire protection. Upon investigation, your engineering team discovers that pumps at three other Dreamy Stay Hotels are also nearing the end of their useful lives. You’re now faced with a nightmare of unplanned capital expenditures (CAPEX), not to mention the added labor costs involved.
To avoid this type of unfortunate scenario, you need robust CAPEX technology that empowers a consistent, consolidated system for capital planning across your portfolio.
Ensure Assets Operate at Optimal Performance
It’s crucial for guest comfort and your CAPEX budget to keep equipment running at an optimal performance level. Many hoteliers fail to plan and instead rely on reactive maintenance, only looking to repair or replace equipment when it malfunctions or breaks down completely. This leads to unpredictable budgeting, downtime and a decreased lifespan for high-cost assets.
A study by the U.S. Department of Energy Operations and Maintenance reports that employing a preventative maintenance (PM) system results in CAPEX savings of up to 18 percent over reactive maintenance. And over a 25-year period, businesses see an ROI of 545 percent, primarily from increasing the useful life of equipment.
To achieve optimal performance levels and take full advantage of these savings, hotels need a digital CAPEX solution. The CAPEX module from Transcendent leverages real-time data, integrating the capital planning process with our PM system. You can create customized PM schedules to continuously monitor the current condition, performance and expected useful life of equipment at each property, helping you reduce and better control repair/replacement costs.
Plan Replacements of Outdated Equipment
Hotels house a number of depreciable components that can become obsolete or require updating to meet government or brand requirements. Traditional manual methods make it difficult to keep track of ideal replacement timing for every asset. As a result, your equipment ages, maintenance work orders increase, and before you know it your engineering team is struggling to put out fires with quick fixes and patch jobs, or worse, you experience downtimes that impact your profitability.
Transcendent’s CAPEX solution offers the unique ability to track every asset from cradle to grave, making it easy to automatically identify outdated equipment for replacement well in advance. You can plan, budget, forecast and approve capital expenditures before you need them, and you won’t waste resources performing maintenance on assets that are obsolete or beyond economical repair. Another bonus, you’re able to schedule replacements for times when it will have the least impact on your business. The CAPEX module also delivers instant digital access to contracts, warranties and certificates of insurance, so you can schedule equipment inspections just before coverage ends.
Determine When to Invest in Energy-Efficient Assets
HVAC systems alone can account for up to 40 percent of your total energy use. If your hotel equipment is not running at peak energy efficiency, you impact guest satisfaction and experience the consequences in your monthly utility bills.
Over the past several years there have been impressive advancements in energy-efficient solutions, like LED lighting and liquid pool solutions that lock in humidity and heat. Programs targeting energy and water efficiency can save you between 5 and 20 percent on your energy bills.
To evaluate whether you should dedicate capital dollars to implementing a new energy-efficient solution, you must first determine your current usage. Transcendent’s real-time monitoring lets you benchmark water and energy loads. You can determine if equipment is operating as designed or below its rated performance level. Transcendent’s solution also helps you make smarter capital investment decisions by letting you easily compare the cost of repairing an asset versus replacing it with a new piece of equipment that offers reduced energy loads.
Reports Place Valuable Data at Your Fingertips
To develop an optimal CAPEX strategy, you need access to important asset and maintenance data. But when everything is stored manually or on different operating systems, essential information can be difficult to find, confusing or completely misplaced.
The Transcendent platform links every piece of relevant document data to its corresponding asset, placing it at the fingertips of property-level and above-property managers whenever they need them. A robust reporting feature improves visibility with standard and customizable reports that let you easily analyze asset data and trends across your portfolio. Reports can also compare locations and regions, delivering insights that streamline both short- and long-term capital planning decisions.
CAPEX is a necessary part of keeping your hotel properties thriving. The right CAPEX technology delivers big benefits through reduced maintenance and capital costs, longer useful life of your assets, and more accurate CAPEX planning and budgeting. Check out our Smart CAPEX Strategies for Your Hotel blog post for even more insights!