By Kevin Eggleston and Kim Gore
COVID-19 affected every restaurant, bar and hotel in North America. In fact, as many as 28,084 hotels closed for some portion of the crisis, and more than 110,000 — or 17% of the nation’s total — restaurants and bars shut their doors permanently or long term.
Now, a year later, large restaurants as well as hotels, conference centers and catering halls find themselves slowly reopening at a reduced capacity.
With just 10% of companies expecting their employees to return to pre-pandemic work arrangements, businesses are likely to look for alternative spaces to accommodate occasional large meetings and conferences after reducing their office footprint. Hotels with convention rooms and centers as well as larger restaurants and catering halls can bridge the gap.
As vaccination numbers rise, travel will return as well. While personal travel is already increasing, we expect business travel to return in full force by the end of 2021. Regional restaurants and other hospitality venues that relied exclusively on business travel are expected to come back then in full force.
Preparing for what’s next with upgrades to your restaurant or hotel
Restaurant and hotel property owners, whether intending to reopen or repurpose space, are likely to need upgrades. This can mean remodeling to accommodate a new, socially distanced customer flow or increase a facility’s useful space in different areas by expanding conference rooms and hallways. In any case, there’s a good chance a building’s systems infrastructure will need to be brought up to local code or need to be totally redesigned.
Property that suffered damage in 2020 will also need upgrading, and, in some cases, need new construction to meet new ordinances.
For example, one California municipality prohibited buildings higher than four stories, but when a six-story office building suffered fire damage, the owners were not allowed to rebuild the top two floors and had to evict two floors of tenants. While an extreme example, it illustrates the importance of checking with local municipalities on potential building ordinance upgrade requirements before construction.
Building ordinance coverage, an extension to property policies, covers a facility for upgrades required by ordinances passed after the building was constructed. The challenge of building ordinance coverage is determining how much to procure. A rule of thumb is coverage equal to 25% of the property’s value.
Systems upgrades are likely, no matter what
When repurposing a restaurant or hotel, contractors, MEP consultants and local government inspectors will need to evaluate each of a building’s systems to determine if they can adequately serve their new purpose. It’s also likely that existing spaces will need inspection and possible upgrades to reopen as a hotel or restaurant. Property owners should consider the following:
- Fire and life safety systems protect employees, customers and assets — they are designed to control fires long enough to allow occupants to exit safely. These safety systems include understanding the fire hazards of each space within your facility, stairwells and emergency evacuation plans including exit and egress. Fire and life safety systems are of extreme importance to restaurants, which can suffer kitchen fires, and hotels, for which a fire can mean a loss of life and property. Repurposing a hospitality property still requires adequate fire and life safety systems.
- Mechanical systems help with air flow and indoor air quality, making them particularly important in light of COVID-19 — bad mechanical systems at hotels and restaurants can turn them into places where viruses spread easily. Even if repurposing a restaurant or hotel for another purpose, some municipalities may demand new or additional mechanical systems requirements to open post-COVID.
- Electrical systems support the amount of power a facility needs to operate, including lighting, cooling and power additional equipment. When repurposing a hospitality space, the property may need additional power to operate post-COVID. Sometimes this additional power needs to come from sources other than the utility, such as from generators.
- Plumbing systems often need to change or be updated when repurposing a hotel or restaurant, or simply reopening. Social distancing may require additional restrooms, for instance. In order to minimize flood risk and lower premiums, the quality of materials and construction in plumbing are paramount, as well as having frequent inspections and flood remediation plans.
Contact your HUB Hospitality expert for more information on upgrading your facility for what’s next in the hospitality industry post COVID-19
Costar, “The Lost Year: How COVID-19 Has Altered the Hotel Industry,” March 19, 2021.
Fortune, “More than 110,000 eating and drinking establishments closed in 2020,” January 26, 2021.
NBC News, “Just 1 in 10 companies expect all employees to return to the office,” January 26, 2021.