As the recessionary clouds darkened last year and hoteliers watched the flow of travelers slow to a trickle, they and other business owners sharpened their knives and began slashing costs with a vengeance.  Their aim, of course: to offset lost revenues amid fears of worse to come.

Now, having cut staff, supplies, marketing, sales and other variable costs to the bone, many in the lodging industry are simply waiting it out, hoping that each day's news will bring some hopeful sign that an economic turnaround is in the offing.  The pundits call it "hunkering down."

Sadly, we continue to hear dire projections for the near term.  PKF Hospitality Research told attendees at this January's Americas Lodging Investment Summit in San Diego that the number of full-service U.S. hotels lacking the cash flow needed to pay their debt will increase by 25 percent in 2009. PKF also said hotel property values likely will decrease another 20.1 percent on top of the 14.1-percent decline suffered by hotels nationwide in 2008.

 Todd Buchholz, a former White House economic adviser who gave a keynote speech at ALIS, gave the first and only positive forecast at the conference by predicting the economic recovery could begin as early as this fall.  If he's wrong, I doubt we'll hear much from Mr. Buchholz again anytime soon.

It would be easy to conclude that hunkering down is the only thing to do; easy to do, that is, if you don't mind conceding defeat to the competition.  I happen to believe those who are taking the ostrich approach instead of taking advantage of the current economy to improve their properties are missing a very significant opportunity.

That's right, I said "taking advantage of the current economy."  At the risk of labeling myself a contrarian, I truly believe that downturns like this one offer rare, perhaps once-in-a-lifetime, opportunities to make huge leaps ahead of the competition.  My belief is based on the following six reasons:

First, let's examine the concept of investing at the bottom.  From Nathan Rothschild to Sir John Templeton to Warren Buffet, the advice from successful investors through the ages has been remarkably consistent:  The time to invest is when gloom and doom are at a peak.  From the broadest perspective, there’s an opportunity today for those with adequate cash flow and financial resources to purchase attractive properties at greatly distressed valuations from those who are unable or unwilling to weather the storm.

There are also several sound reasons to invest in upgrading existing owned properties during difficult market conditions, and there is overlap between them.

Second, let me address the concept of minimizing lost operating revenue.  Regardless of whether it is a "total gut and renewal" or a "rolling ff&e refurbishment," the optimum time to renovate and make improvements is when occupancies are low.  The math is simple.  Renovating during good times often means taking guestrooms out of service which would otherwise be generating revenue.

Lost revenue from out-of-service rooms during renovation periods can actually represent a significant percentage of the upgrade expense.  There is also the added negative impact on guest satisfaction as guests are disturbed during renovation activities.

Third, let's consider the opportunity to derive the best value from vendors.  During general economic downturns, vendors are likely suffering as much as hotel operators.  While you may reduce rates and offer "specials" during difficult times, vendors are no different.  Whether it is for ff&e, high-tech upgrades or anything else, you can likely strike a better bargain with vendors during recessionary periods.  Typically, this can reduce upgrade costs from 10 to 30 percent.

Fourth, now is the time to take advantage of government incentives and utility rebates.  This primarily involves upgrades to improve energy efficiency and reduce consumption.  In the case of rebates, utilities in most service areas have established rebate programs.  In some cases, such programs pay for as much as 50 percent of an energy management system.

This means, for example, that, if an energy management system promises a payback of 2-1/2 years, a rebate can reduce that to less than 15 months.  That's a hard-to-refuse proposition under any circumstances.  And, despite the recent decline in prices at the gas pump, there is no question that energy costs, the second largest operating expense at most properties, will continue to rise.

Also, some vendors will work on a performance-based or lease arrangement in which an energy management system is paid for over time by applying savings toward system cost.  This can mean, literally, that the system pays for itself from day one with minimal or no cash outlay.

The Obama administration is expected to implement additional tax and other incentives for energy-reducing initiatives soon.  It is not clear at this time as to precisely what those will be, but they assuredly are coming.

Five, keep in mind that even simple, low-cost upgrades can have a lasting impact on guests.  For example, fewer than four percent of U.S. lodging properties have a doorbell or electronic annunciation of do-not-disturb or make-up-room.  This feature is a standard in all international-class hotels in Asia (and, as most know, Asian hotels have not only been at the top in guest-centric service but have been first adopters for virtually all technology innovations, from remote bedside room controls to RFID proximity locks.) There also are cost savings associated with eliminating the printing and distribution of those bothersome do-not-disturb and make-up-room hanging cards.

Another low-cost upgrade is simply replacing outdated analog-type thermostats with digital thermostats.  Most major chains have mandated these change-outs, but some 50 percent or more of U.S. properties have not yet made this guest-pleasing, environmentally-friendly change.

These are but two of a number of "less-than-$150-per-room" upgrades that can be implemented to differentiate a property and exceed guest expectations.  And low-occupancy periods are the best times to do so.

Six, let's not forget employee morale and guest satisfaction.  In some cases, especially with low-cost upgrades, existing staff can be reassigned to implement upgrades (rather than being laid off) during periods of low occupancy.  In my own experience during the past 20 years, I can cite a number of exemplary instances in which this happened.  In the end run, it has resulted in greater employee loyalty and dedication.  And that, in turn, invariably translates into enhanced guest satisfaction.

It's all about positioning for the inevitable upturn.  Once again, from a broader perspective, positioning a property during downturns in our cyclical industry means that you will be better positioned for the inevitable upturn.  This one is somewhat more difficult to grasp but is, perhaps, the most important of all, especially for real hoteliers in it for the long term.

Duane Buckingham is chief executive officer of INNCOM.