In early 2012, the hotel renovation industry began its recovery, led by construction booms in major cities and rising occupancy rates at hotels across the nation. In the years since, thousands of hotel rooms, lobbies and restaurants have been renovated with gleaming bathroom fixtures, fresh carpeting and plush pillow-top mattresses.
When hotels redecorate or upgrade they replace older furniture, fixtures and equipment (FF&E) with new items. So, you may ask, what does a hotel undergoing a renovation do with 200 bedding sets and televisions? Or 450 mattresses? Or 250 sofas and chairs. Or two truckloads of mini-fridges? Thankfully, more and more hotels are combining décor overhauls with resale, reuse and philanthropy to keep old FF&E from landfills.
“Hotels today cannot just load up dumpsters with used furnishings to make way for renovation crews to work,” explained Sam Cicero, Jr., President of Cicero’s Development Corp. “For hoteliers who need to clear out old furniture, the use of liquidation sales, recycling or charities is the ticket for faster, more cost-effective renovations.”
Hotels typically pay liquidators $100 or more per guestroom to clear out the old to make way for the new. Liquidation companies then turn around and sell the used goods for approximately 25 percent of the price that retailers charge for similar new items. Oftentimes economy hotels will pick up high-end, refurbished FF&E from liquidators on the cheap such as televisions, fitness equipment and bedroom sets to support their own renovation efforts.
Liquidations can be performed one of two ways. First, there are liquidation companies that will simply haul off old furniture to off-site locations for resale. This approach is fastest since roomfuls of FF&E can be trucked off at a time and it doesn’t require hoteliers to manage the process. On the other side of the balance sheet, however, are high transportation costs that leave far less money to offset the cost of new FF&E.
A second approach is an on-site liquidation or auction at the hotel. One benefit is that hotel operations can continue uninterrupted while the sale is going on. Another advantage is that transportation costs are eliminated leaving more revenue for the hotelier. To the downside there are added costs of advertising, security and crowd control. Plus, there is the real possibility that not all items will be sold.
Besides reselling old furniture, the hotel industry has embraced recycling for end-of-lifecycle FF&E. Old mattresses, for example, are nearly 100 percent recyclable. Also, millions of tons of commercial carpeting have been kept out of landfills through a concerted effort between hotels and carpet markets that facilitate its conversion to such products as animal bedding, mulch, carpet padding, and oil spill cloth, to name a few. Even partially used hotel soap and shampoo is being recycled into hygiene products for distribution to refugees, disaster victims, hotel families and impoverished people around the globe.
“The major hotel brands we work with are deeply concerned about sustainability and in reducing their carbon footprint,” Cicero said. “That concern extends itself to the disposal of used FF&E.”
Yet another solution is the donation of used FF&E to charities. Hotels that do this may save on waste hauling costs and even get a tax receipt from charities for their contributions. There’s always a need somewhere. A local homeless shelter may require 50 bedding sets. Or a local food pantry can use ten bins of slightly dinged kitchen culinary equipment. Major charities such as the Salvation Army and Goodwill, along with specialty building materials brokers, and community organizations at the local level can all facilitate the collection, reuse, resale, and recycling of donated hotel items.
Obviously, when a hotel is undergoing a major renovation, rooms must be put out of service and therefore cannot produce revenue. Any delay in discarding old furniture translates to keeping those rooms from guests. But rest easy. There are many ways for a hotel to quickly remove old FF&E besides having it tossed in a landfill.
Zara Johnson is Director of Business Development for Cicero’s Development Corp. Cicero’s is an established General Contractor specializing in commercial renovation for more than 45 years. Headquartered in Plainfield, Ill., the company’s best value practices and deliverables include: Renovationomix®, the systematic method of renovating to increase revenue; $ensible Green®, increasing property owner income through low-cost environmentally-friendly renovations; Disruption Avoidance Management to minimize any renovation disruption and maximize cash flow; and a Surprise Management Program to identify and anticipate potential challenges and roadblocks, and develop contingencies to ensure adherence to timeline and budget.