Create one integrated capital schedule—not separate, overlapping lists from the brand, engineer and designer.
Give every item a unique identifier and record:
- Reason: safety, compliance, maintenance, brand requirement or optional improvement.
- Scope, quantity, responsible professional and estimate date.
- Design, permit and procurement dependencies.
- Hard cost, professional fees, taxes, freight, installation and contingency.
- Deposit, progress-payment and completion dates.
- Rooms or facilities affected and trading restrictions.
- Funding source and lender/brand approval requirements.
- Warranty, commissioning and closeout documents.
Separate furniture, fixtures and equipment, operating supplies and equipment, major building systems and working capital. Reconcile overlapping scopes so the same bathroom, roof or technology upgrade does not appear twice.
Can you use a national hotel development cost per key?
Use it only as a reasonableness check. HVS’s July 13, 2026 development-cost survey draws on projects proposed or under construction during 2025 and explains that its category results are affected by project mix and location. It is not a project-specific conversion estimate. (hvs.com)
An existing hotel with a modest cosmetic proposal can still need substantial building work. Partner Engineering’s 2025 construction-risk case study describes a hotel renovation disrupted by permitting failures and structural/mechanical discoveries, ultimately missing the peak season. It is a case example, not an estimate of how frequently this happens. (partneresi.com)
How should downtime enter the model?
Forecast sellable rooms, expected demand and operating costs month by month. Deduct the contribution lost from unavailable business while retaining costs that continue during construction; separately include construction payments, transition expenses and financing costs.
Do not count both gross lost revenue and the same lost operating contribution as separate cash losses. Likewise, do not assume housekeeping, utilities and staffing all decline proportionately when a floor closes.
How do you avoid double-counting replacement reserves?
Use a restricted-reserve roll-forward:
Opening reserve + required deposits − approved capital releases = closing reserve
Then reconcile unrestricted cash separately. If capital expenditure is paid from the reserve, show the release funding that expenditure rather than subtracting both the reserve deposit and the full reserve-funded expenditure from distributable cash without an offset.
A reserve percentage is not proof of adequacy. Pebblebrook’s 2025 filing describes contractual replacement-funding arrangements typically based on 4% of hotel revenue; that is a company-specific observation, not a sufficient capital budget for your property. (sec.gov)
Gate 6: the works program must be affordable in both amount and timing, with a defined response if completion misses the next important trading season.