The idea that renovations help property value isn't exactly a revelation, but a recent report by Cornell University's Center for Hospitality Research examines how the two are related.

The report-New Beats Old Nearly Every Day: The Countervailing Effects of Renovations and Obsolescence on Hotel Prices-reveals that hotels typically reach an "inflection point," or a turning point, when deprecation reverses. John B. Corgel, a professor at the Cornell School of Hotel Administration, used a study of 3,810 chain-affiliated hotels to determine the average age for this turnaround is 28 years. At that point, unlike other commercial real estate, hotels begin gaining value.

"My analysis suggests that renovation money is well-spent on middle-aged properties that are positioned in strong markets with good locations," Corgel said in a release. "Although outside events do remove some hotels, many properties survive to increase in value during their middle years. Thus, I urge owners to analyze today's renovation expenses against this future value."

Corgel explains a hotel's value, like most commercial property, declines at a fairly brisk pace for the first 10 years of operations. At that point, the usual time when hotels begin renovations, depreciation begins to slow. If the hotel is still going strong through 28 years, the trend usually begins to reverse. Renovations have stabilized depreciation and other unknown factors, Corgel said, begin to promote the property's value. He calls this the "vintage effect." It could be attributed to favorable sites, impressive architecture or other features attractive to investors, the report says. Those properties that aren't as well positioned should be considered for rebranding.

Ultimately, the report gives owners reassurance that the cost of renovations can be money well spent at strong properties and long-term owners will benefit in years 28 and beyond.

The complete report is available at www.chr.cornell.edu.