Property Improvement Plans (PIPs) are a reality of hotel ownership. Whether triggered by a franchise renewal, property acquisition, brand conversion, or systemwide standards update, a PIP represents an opportunity to improve a property’s competitiveness and guest experience.

Unfortunately, it can also become significantly more expensive than expected.

One of the most common concerns owners have when considering PIP fulfillment is the cost per room or cost per key. Depending on the scope, market, and brand requirements, costs can range from a couple thousand to $40,000+/key. For example, depending on brand, scope and PIP, a full-scale renovation may cost around $30-40,000 per key. While there is no single mistake that automatically causes costs to increase, what we’re seeing across hotel renovations is that many owners unintentionally make planning decisions that increase costs long before construction begins.

The good news is that many of these issues are avoidable.

What Is the “$40,000-Per-Room PIP Mistake”?

The biggest mistake isn’t necessarily spending $40,000 per room.

The real mistake is waiting too long to evaluate and plan for the scope of a PIP before implementation begins.

When owners treat a PIP as a construction project rather than a planning process, they often lose opportunities to:

• Value engineer costs
• Pursue waivers where appropriate
• Phase work strategically
• Coordinate procurement efficiently
• Identify alternative solutions that meet brand standards

The result is frequently higher costs, compressed schedules, and less flexibility.

What we’re seeing across hotel renovations is that owners who engage early tend to have more options and greater control over their investment.

Mistake #1: Waiting Until the PIP Deadline Is Approaching

One of the most expensive mistakes owners make is delaying action until brand deadlines become urgent.

By the time a deadline is looming, many of the best cost-control opportunities become limited or difficult to achieve.

Late planning often leads to:

• Expedited procurement
• Limited contractor availability
• Compressed construction schedules
• Reduced ability to phase renovations

In some cases, owners may find themselves paying premium pricing simply because there isn’t enough time to explore alternatives.

A PIP should ideally be evaluated when they receive the PIP or 12-24 months before execution would begin.

Mistake #2: Treating Every PIP Requirement as Non-Negotiable

Many owners assume every line item in a PIP must be completed exactly as written.

In reality, there are often opportunities to discuss:

• Equivalent materials
• Alternative solutions
• Phased implementation
• Deferred items
• Waiver requests

Not every request will be approved, but experienced hospitality renovation teams often identify areas where flexibility exists and can help nurture conversations with hotel brand reps.

What we’re seeing across hotel renovations is that early dialogue with brand representatives can create opportunities to reduce costs while still achieving compliance.

Mistake #3: Failing to Perform a Full Existing Conditions Assessment

A PIP document tells owners what must be upgraded. It does not always reveal underlying conditions that may affect cost.

Without a thorough assessment, projects can encounter:

• Hidden water damage
• Structural concerns
• Outdated infrastructure
• Electrical deficiencies
• Building envelope issues

Discovering these conditions after construction begins often results in change orders and budget increases.

Early site evaluations help owners understand the true scope of work before committing to a final budget.

Mistake #4: Selecting Materials Before Evaluating Value Engineering Opportunities

Material decisions have a major impact on renovation costs.

Many owners focus solely on initial pricing rather than evaluating:

• Durability
• Maintenance requirements
• Lifecycle performance
• Lead times
• Installation efficiency

Value engineering isn’t about choosing cheaper materials. It’s about identifying products that deliver the best overall value while maintaining budget and brand compliance.

What we’re seeing across hotel renovations is that early value engineering frequently produces meaningful savings without compromising guest experience.

Mistake #5: Delaying Procurement Decisions

Procurement remains one of the most important factors influencing project costs and schedules.

Industry-wide lead times for FF&E, case goods, and specialty materials can still extend several months depending on the product category.

When procurement decisions are delayed:

• Shipping costs may increase
• Material availability becomes less predictable
• Schedule flexibility decreases
• Alternative product options become limited

Owners who begin procurement planning early often gain greater control over both budget and timing.

Mistake #6: Choosing a Contractor Based Solely on Price

A low bid may appear attractive during the budgeting phase, but it doesn’t always result in the lowest total project cost.

Hospitality renovations require specialized experience, particularly when:

• Hotels remain operational
• Brand standards must be maintained
• Guest-sensitive construction practices are required
• Complex scheduling is involved

The lowest initial proposal may not account for all project realities.

Instead of focusing solely on price, owners should evaluate:

• Hospitality experience
• PIP expertise
• Project management capabilities
• Communication structure
• Ability to provide value-engineered solutions

What we’re seeing across hotel renovations is that experienced hotel renovation contractors often identify savings opportunities that offset higher upfront costs.

Mistake #7: Ignoring Operational Impacts

Renovation costs extend beyond construction.

Owners must also consider:

• Lost room revenue
• Guest satisfaction impacts
• Operational disruptions
• Staff coordination challenges

A poorly phased renovation can affect occupancy and guest perception, creating indirect costs that may exceed construction-related savings.

This is especially important for seasonal properties where missing a revenue window can have a significant annual impact.

Mistake #8: Underestimating Brand Conversion Complexity

For owners pursuing a brand conversion, PIPs often become more extensive than initially anticipated.

Brand conversions may involve:

• Guestroom redesigns
• Public space reconfiguration
• Exterior upgrades
• Signage replacement
• Technology improvements

What appears to be a straightforward conversion can quickly evolve into a comprehensive renovation.

Early planning and scope validation are critical for avoiding surprises.

Mistake #9: Failing to Sequence Work Strategically

Sequencing plays a major role in cost control.

Projects that lack a clear execution strategy often experience:

• Trade conflicts
• Material delays
• Extended timelines
• Increased labor costs

What we’re seeing across hotel renovations is that successful projects establish sequencing plans early, particularly for:

• Operating hotels
• Seasonal properties
• Multi-property portfolios

The earlier sequencing decisions are made, the easier it becomes to manage both cost and disruption.