What capital reinvestment will be required, and when?

     On average, full service hotels must undergo significant remodeling at least once every seven years,¹ and the costs can be quite significant. So who is responsible for paying for worn-out furniture, cracks in the ceiling, run-down equipment, etc.? 

    Leaving this question for when the time comes to perform the needed capital improvements may have complications. For example, in 2003 the Grand Traverse Band of Ottawa and Chippewa Indians purchased the 660 room Grand Traverse Resort and Spa in Acme, Michigan, and later that year announced plans for an extensive renovation program.² For the first time, owners of the resort’s 234 condominium hotels were asked to participate in a uniform refurbishment plan, with costs ranging as high as $40,000, a hefty sum given that many units were valued at around $100,000. According to David Boyer, a Chicago attorney who owns one of the units, “There was a complete owner revolt.”³

Notes