CHICAGO—When Sam Cicero, Sr. started Cicero's Development Corp. back in 1970, he says “it was just a little painting and odd jobs.” Today, the Plainfield, IL-based company renovates hotels with as many as 428 rooms, and with the recession fading, business across the country has boomed. “We've got a pretty good feel for what's happening in the nation,” he adds, and “there really has been a flood of business.”
Not so long ago, much of Cicero's work involved property improvement plans for major hotel chains like Omni and Holiday Inn, what company officials like to call “lipstick and rouge,” or the updates the chains want their owners to put in every few years to keep the facilities fresh, including new paint, signage, computers and other features. But during the recession, most chains took it easy and let their owners skip some of the scheduled updates. And now that tourists and business travelers have once again started booking rooms, these owners need to make up for lost time.
Furthermore, “many hotel owners have recently bought distressed properties, or they're bank-owned, and for years they've had very little money put into keeping up the infrastructure,” says Cicero's son and company president Sam Cicero, Jr. “It used to be all lipstick and rouge,” but he estimates that half of their current work involves this more drastic deep infrastructure work such as updating HVAC systems, installing new plumbing or bringing hotels into full compliance with the Americans with Disabilities Act.
The other trend driving the business is the desire among many owners to reduce energy or water use. “I'm not talking about doing major LEED certifications,” Cicero, Jr. hastens to add. Many of these improvements are as simple as putting in low-flow showerheads or new toilets that use one-third the amount of water than older designs. “When you consider how water a hotel uses per day,” these minor adjustments “can reduce costs dramatically.”
The Ciceros have done as many as nine major renovations in a year, but in 2013, they think they could double that. Currently, the company is doing a 287-room Wyndham Hotel in Houston, in addition to another project in Omaha, one in Alabama, and two in the Chicago area. “There's a lot of movement out there,” says Cicero, Sr.
Hotel renovations require a specific set of skills most general contractors don't have, the Ciceros say. A hotel just can't shut down for a makeover which will last for months, they point out. And most importantly, the renovation work has to avoid disturbing guests even though it can involve up to 19 local subcontractors and dozens of their employees trucking in equipment and then toiling away on several floors at once. Therefore, the contractors must coordinate both daily and long-term plans with hotel management and prepare themselves to work whenever the managers can arrange to keep an entire floor vacant, even if that means weekends or the middle of the night.
“That's what makes this such a different animal,” Cicero, Sr. says, something that many contractors are not accustomed to handling. “You have to be available 24-hours-a-day, 7-days-a-week until the project is completed.”
Cicero typically spends two years with a hotel's management team. The initial planning takes a full year, and the actual renovations can get spread out over six to nine months, with an additional three months tying up loose ends.
But once the work gets done, the owners have an opportunity to boost profit margins. Cicero Jr. estimates that newly-renovated hotels can increase their rates by between ten and twenty percent. In addition, the relatively low-cost green improvements should significantly decrease operating costs. Cicero Sr. adds that hotels “don't mind spending the money because they can always see it coming back.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
