When figuring out Hotel Rooms Renovations, Hotel Owners have to worry about more than cost!

As a hotel owner, you are mandated by your brand to remodel the rooms to brand standards every 5 to 10 years based on the brand. So many items are involved in a new build or hotel room renovation. From millwork, to countertops, floor finishes, FF&E, case goods, barn doors, shower doors and surrounds, frames etc., you name it, most of these items are or where manufactured in China. And how many of those items are now subject to tariffs? “It’s pretty much everything that fits inside the room”. President Donald Trump’s latest round of tariffs on China targets $200 Billion in imports. The administration planned to raise the import taxes on those Chinese goods from 10 to 25 percent as of January 1st 2020. Tariffs remain very confusing to the industry and consumers who see them mostly as another tax on the American public and consumers. Everything is custom made for the hotel brand, the supplier shops those drawings around to perhaps a dozen manufacturers to see who can build the best tables or chairs at the lowest price. Most of the manufacturers are in China as of today. About 100 percent comes from China. For case goods products, it’s most likely 50 or 60 percent. (Case goods are basically furniture made from wood and metals, like dressers, tables and chests.) Those pieces from China are being hit with a 10 percent tax at the US border. There’s a little bit of scrambling, a little bit of absorbing of the cost from the suppliers, and us, as an owner, have to absorb some of the cost as well. But going to 25 percent, that’s a different story, some of these products have a 30% tariffs... Some furniture is still built in the US, but most of the manufacturing from China to Vietnam, to Poland, will not be coming back to the US any time soon. If one of the goals of President Trump’s tariffs on China is to shift manufacturing back to the United States, it’s really hard to find anybody in the hotel, industry who believes that is going to happen. Most people in the industry not only worry about price increases, one of the issue is that tariffs on certain products keep changing, and it is difficult to stick to an agreed price with the customers when that happens, both sides usually make concessions.