The selection of effective capital expenditures is critical to the short and long term value of the hospitality businesses. Strategic planning is needed to insure that cash reserves will be sufficient when the required improvements are required. Short and long-term planning is needed to insure that cash reserves will be sufficient to meet the cost of improvements to be made, as scheduled, to maintain
(and enhance) the value of the business.

SHMS will work effectively with the owner to establish the amount of reserves that should be set-aside for capital expenditure on an ongoing basis. While a general rule of thumb for the level of repairs and maintenance is approximately 3-4% of business’s revenue, this amount can vary with the age of the property, and declining revenue levels.

Annually SHMS updates a short-term and long-term capital plan for each of our clients. A complete report is presented to ownership for assistance in assessing upcoming capital improvement planning. This ensures that you, as the owner, are not faced with unexpected capital expenditures.