If you own or are acquiring a franchised hotel, a property improvement plan — or PIP — is one of the most significant capital events you'll face. Yet many owners enter their first PIP negotiation without a clear understanding of what it is, why it's required, or how to evaluate what's being asked of them. This guide covers the fundamentals.

What Is a Hotel PIP?

A property improvement plan is a document issued by a hotel franchisor that specifies the physical upgrades a property must complete to maintain (or obtain) a franchise license. It is, in essence, the brand's list of requirements to bring your property up to current brand standards.

PIPs are not suggestions. They are contractual obligations. Failure to complete a PIP by the agreed deadline can result in franchise termination — which means losing the right to operate under the brand flag and, in many cases, triggering liquidated damages.

What Triggers a PIP?

There are three primary triggers:

1. Ownership Transfer

The most common trigger. When a franchised hotel changes ownership, the franchisor typically conducts a property inspection and issues a PIP to the new owner as a condition of transferring the franchise agreement. The scope of the PIP reflects the gap between the property's current condition and brand standards. New owners should always negotiate the PIP as part of the acquisition — ideally before closing, using an independent cost estimate to evaluate the ask.

2. Franchise Renewal

Franchise agreements typically run 15–20 years. At renewal, franchisors issue a PIP that reflects the current brand prototype. Properties that were built to an older prototype will face more extensive PIPs at renewal than those renovated more recently. Renewal PIPs are often the largest capital event in a hotel's lifecycle.

3. Quality Assurance Failure

Brands conduct regular QA inspections. Properties that score below threshold — or that receive multiple deficiency notices — may be issued a mid-term PIP requiring remediation of specific items. These are typically smaller in scope than transfer or renewal PIPs, but they carry tight timelines.

What Does a PIP Cover?

A full PIP can touch every physical area of the hotel. Standard sections include:

Guestrooms: Furniture, case goods, soft goods (carpet, bedding, drapery, window treatments), bathroom finishes and fixtures, in-room technology
Corridors: Flooring, wall covering, lighting, signage
Lobby & Public Spaces: Furniture, finishes, lighting, front desk, seating areas
Exterior: Signage, porte-cochère, parking lot, landscaping, building exterior
Fitness Center: Equipment, flooring, mirrors, technology
F&B Outlets: Restaurant and bar finishes, equipment, seating (for full-service brands)
Meeting Rooms: Furniture, AV equipment, wall covering, flooring
Life Safety: Sprinkler systems, emergency lighting, smoke detectors (non-negotiable)

Not every PIP covers all of these areas. A soft-goods PIP might only address guestroom carpet, bedding, and drapery. A full hard-goods PIP will include construction work throughout the property.

Soft Goods vs. Full Renovation: What's the Difference?

This distinction is critical for budgeting. Brands typically distinguish between two levels of renovation in their PIP documents:

Soft goods renovation: Replaces items with a shorter lifecycle — carpet, bedding, window treatments, soft seating, artwork. Typical cost: 40–60% of a full renovation. Most properties undergo a soft goods refresh every 7–10 years.

Full/hard goods renovation: Includes everything in a soft goods renovation plus case goods (furniture), bathroom tile and fixtures, millwork, and potentially structural elements. Typical cost: full per-key ranges listed above. Most properties face a full renovation every 15–20 years.

When you receive a PIP, determine upfront which category it falls into — and challenge the brand if you believe a hard goods requirement is premature given your property's renovation history.

How Long Does a PIP Take to Complete?

The franchise agreement specifies completion deadlines, but typical timelines are:

Soft goods PIP: 6–12 months from approval
Full renovation (select service): 12–18 months
Full renovation (full service): 18–36 months, often phased

Timeline extensions are negotiable, particularly when owners can demonstrate supply chain delays, permitting timelines, or financing complexity. But extensions require proactive communication with the brand — don't wait until you're past deadline.

How to Budget for a Hotel PIP

The traditional approach is to hire a PIP consultant — a specialist who reviews the brand document and produces a line-item budget. This costs $5,000–$15,000 and takes 2–4 weeks. The resulting budget is used to evaluate the acquisition, secure financing, and negotiate with the brand.

PIPGURU produces the same type of defensible, line-item estimate in under five minutes. You input the brand, tier, room count, and property details. PIPGURU applies industry-standard cost data to generate a per-key and total project budget — broken down by FF&E, construction, soft costs, and contingency. Use it to evaluate an acquisition before you commission a full consultant study, to pressure-test a quote you've received, or to prepare for your first conversation with the brand.

What Is a Hotel PIP? A Complete Guide for Owners