ISLAMORADA, FL—When Starwood Capital Group decided to upgrade the former 1951-era Holiday Isle Hotel in this beach community in the Florida Keys into what would become the Postcard Inn Beach Resort & Marina, key decisions had to be made about how much of the infrastructure to keep or upgrade or replace. The decisions would affect both the cost of the project and the timing as to when the transformed property could fully “reopen” to the public and begin generating increased revenues.
High up on the list of critical infrastructure systems that the team from Starwood Capital considered was the property’s Packaged Terminal Air Conditioner (PTAC) units. “It’s a challenge when you’re dealing with buildings built in the ’50s and ’60s because the infrastructure and code have changed over the years. But we did spend a good deal of time and money on the infrastructure to make sure it worked properly,” explained Roy Shanholtz, VP of asset management.
Replace vs. retrofit
“It didn’t make financial sense to try to retrofit a different type of air conditioning system, so we basically opted to replace every PTAC unit on the property,” Shanholtz said. “Upgrading to new PTACs still represented a major investment.”
PTAC technology has really evolved in the past few years and is still evolving, he said. “The units are much more energy-efficient than they used to be.”
Upgrading the PTACs also meant upgrading the slider glass doors that open up to a balcony in many of the property’s 143 rooms. The existing sliders didn’t lock properly and would allow cool air to escape, wasting energy and running up costs.
Compounding the problem, guests would turn up the cool air, open the slider and leave the room, putting added pressure on the PTAC unit. “Guests don’t understand the consequences of what they’re doing. It’s not their property,” Shanholtz explained.
As part of their technological advances, PTAC units today allow guests to control the temperature in their room better than ever before. “Guests tell us it’s one of the features they like the most. They want to be able to control their environment as much as possible,” said Bob Van Bergen, managing director of the property. Today’s units are also much quieter than past generations. “Noise had always been a sticking point,” Van Bergen noted. The property’s new units are manufactured by Amana.
Van Bergen praised what has always been one of the PTAC’s most appealing features for an operator: ease of maintenance. In properties with a four-pipe, central air system, a malfunction can shut down an entire floor or wing of a hotel. With a PTAC system, by contrast, if and when a unit malfunctions, the disruption is confined to the one room.
“The unit is easy to replace. You just slip it out of its sleeve under the guestroom window and replace it with a functioning unit. As soon as you’re done, the room can be put back into the hotel’s inventory,” he said.
Given that Starwood Capital invested in all new units, such maintenance concerns shouldn’t be an issue for years. But keeping the units in good working order early in their life cycle, Van Bergen argues, helps extend their life long-term. Coils can be cleaned on a regular basis by the property’s housekeeping department.
“Considering our beach location and the fact that the Florida Keys have high humidity for a good part of the year, you don’t want the units to start to rust if they aren’t well maintained,” he said.
Despite the hotel’s PTAC units being brand new, Van Bergen and his team still take the precaution of keeping a limited number of fully operational spares on hand in case they need to be pressed into use.
And if and when the team needs to replace a PTAC unit, it’ll save time as well by not having to send the faulty unit to an off-site repair shop and then wait for it to be returned. “Rather, the repair shop sends a van, which parks by our maintenance department garage. The repair shop’s maintenance engineers do the necessary work on site and we’re ready to go,” Van Bergen reported.
In addition to the time savings, there’s an economic benefit to using the outside repair shop. “It saves us having to have an engineer specifically trained on PTAC units on staff,” Van Bergen concluded.
The Postcard Inn Beach Resort & Marina in Islamorada is Starwood Capital’s second Postcard Inn. Three years ago, the Greenwich, CT-based private equity firm debuted the brand with a Postcard Inn in St. Pete Beach, FL, a former Travelodge with a similar profile to its Florida Keys sibling. Other Postcard Inns are in the planning stages.