The hopes of the economy turning around have many small hotel owners and operators primed for a successful year. Industry analysts such as STR are projecting increases in all three key performance metrics during 2012.
This year owners and property managers are optimistic they will have the opportunities to address much-needed capital improvements, renovations, brand standard requirements, and the well-deserved employee training and pay increases. However, some costs owners will be required to invest have little ROI in supporting their property’s bottom line or adding additional value to their assets. On March 15, 2012, hoteliers were required to comply with new provisions in the Americans with Disabilities Act (ADA). Every hotel, regardless of when it was built, must be in compliance with the new ADA standards.
The ADA is a civil right, not a building code. As an American society, we do not condone discrimination and the ADA is a law that recognizes the civil rights of the disabled community. But for a lot of small business owners the question is: What’s the real cost of compliance?
“Reasonable” accommodations vary and, intrinsically, so do the costs. From changing doorknobs and building ramps to purchasing pool lifts, the expense can range from a few dollars to thousands. To add uncertainty to the cost of compliance is the lack of clarity on the expectations of these new ADA requirements by the Department of Justice. What is the definition of “readily achievable?”
There is a misconception out there that the new ADA hotel compliance standards are limited to pool lifts, but the reality is that it is much more complicated and financially burdensome. (Editor’s Note: the pool lift compliance date was extended until May 15.) Some of key items include: reservations, water closet clearances, power mobility devices, vanity equity, service animals, parking, guestroom door signage, exercise equipment, service counters, saunas and steam rooms, play areas, and accessible routes to court/sports facilities, to name a few.
Unfortunately, costs don’t stop incurring for a small business owner once they have purchased a product or equipment to become compliant. Then it becomes an issue of operating and maintaining costs required for all equipment.
It’s no secret, hotel expenses are divided into two distinct categories: fixed costs and operating costs. Fixed costs are ones that remain the same in spite of the property’s occupancy and revenue generation (i.e. monthly billboard expense, tax, insurance, etc.). However, operating costs are the primary focus for a property to be proactive in identifying how to best manage costs that they can control (i.e. housekeeping, labor, breakfast costs, consumption of gas, water, and electricity, etc.). This cost will continue to fluctuate as occupancy and revenue stream go up or down, but small business owners especially understand the mechanics of fixed versus operating, and it allows them to make the necessary decisions during unstable conditions.
We recognize the federal mandates that continually make a significant impact on our ability to sustain real financial health. This is not unlike what we have experienced with technology after spending thousands of dollars upgrading the hotels with cables and modems that have become irrelevant.
While hotels do need to spend money on equipment that will likely not see a great deal of use, keep in mind that the disabled market is growing and increasingly mobile. We expect to see more travelers with disabilities staying at our hotels and looking for accessible accommodations. However, I envision technology in aiding individuals with disabilities far less expensive than retrofitting pools, buildings, building ramps, curb cuts, special rooms, and bathrooms.
Rajesh M. Shendge is president and COO of SAP Hotels LLC, and a member of the Small and/or Independent Property Advisory Council (SIPAC).