MeriStar’s Velocity Program Cuts Expenses, Time Of Hotel Renovations

ARLINGTON, VA— The new Velocity renovation program by MeriStar Hospitality Corp. not only takes the guesswork out of the capital improvement process for those hotels in its portfolio, but it also helps reduce costs associated with renovations and accelerate the time it takes to complete such projects. The new program is anticipated to reduce guestroom renovation costs by more than 15%, and the company will invest approximately $225 million in its 73 hotels over the next two years, according to MeriStar. The company intends to spend approximately $125 million in capital improvements this year, and an additional $100- million in 2005. Taking a fresh approach to renovations, Velocity brought together ownership, purchasing, manufacturing and design experts to create timeless guestroom design schemes that could be adapted across the many brands in the REIT’s portfolio. More than 27 properties have been selected and are in various stages of the Velocity program, which will bring the new designs to 4,000 guest-rooms in the MeriStar portfolio over the next two years. Benjamin West and HVS Compass Interior Design, along with MeriStar, decided on three custom guestroom designs, each of which centers around a casegood scheme: clear maple, warm cherry or rich mahogany woods. “Instead of trying to do something with the process that will make it a little better, we made a radical change to the process for a radical improvement in costs,” said Mark Linch, MeriStar senior vp/design and construction, who oversaw the development of Velocity. The program takes advantage of the REIT’s size and scale to help lower costs associated with upgrades, as well as significantly reduce the time it takes to execute the project, he said. Benjamin West took a leading role in the development of the program, working with FF&E manufacturers with proven track records as potential suppliers. The company carefully qualified all of the vendors to help ensure dependability in product and delivery. “We evaluated the whole purchasing process. We put everyone in a room and told the vendors what we wanted to do. There was such positive energy. By working with them up front, and listening to their input, we were able to figure out the best way to move forward,” said Alan Benjamin, president of Boulder, CO-based Benjamin West. “The vendors were very involved with the process, and as a result were willing to do things for us to help make things work better,” Benjamin said. For example, each of the experienced vendors that were selected for the program offer a five-year guarantee on their products. HVS Compass played a significant role in expediting the design process, particularly the documentation. Led by Jenny Ray McCloskey of HVS Compass’ Phoenix office, the initial design concept and ordering period, which typically took 15 to 20 weeks, was reduced to about 6 weeks, according to Jonathan Nehmer of HVS Compass and JN+A. McCloskey and team developed three schemes that could be used in various properties across multiple brands depending on type and location. “The schemes work well in nearly every type of application, but can be adapted for each property’s idiosyncrasies,” Nehmer said. In addition, the new design documentation techniques enable MeriStar to make quick decisions for effective project management.