Those trumpets heralding the end of the global recession have been understandably muted.

Yes, the news is good, and getting better by degrees. The U.S. economy is looking up, with a U.S. GDP increase of 3.5 percent for the third quarter. According to some forecasts, retail sales for the holiday season could bounce by 1.5 percent, and the rest of the globe is keeping pace or sprinting ahead, with the exception of the U.K., where the crisis lingers on.

But with credit still elusive, job losses mounting and consumer confidence and spending still wobbly, even encouraging words about the economy are being cloaked in caution.

In September, even as he announced the unofficial end of the recession, Federal Reserve Chairman Ben Bernanke was quick to add that momentum will be slow to build throughout 2010. That could hold especially true for restaurant sales; after a recent brief rally in casual and mid-scale dining, figures are expected to remain flat well into next year. Against this backdrop, business owners are understandably tentative about major capital improvements.

The retail, dining and entertainment sectors-which rely on discretionary spending for their bread and butter -are trying to stay competitive while operating lean. For the foreseeable future, designers and architects (who have experienced declines estimated at 25 percent to 60 percent since the ax fell in 2007-08) will probably be taking fewer orders for gut rehabs, and more orders for modest or interim improvements.

"Our clients are asking us to do more with less and with no margin for error, it's more important than ever to actually 'measure twice, and cut once,'" says Tom Wucherer, co-founder YWS Architects of Las Vegas and Singapore. "If you can leverage an under-performing space and turn it into a better revenue driver, that's smart money. Whether it's hospitality or a casino or an office building, everyone has an area that's not performing up to snuff in this economy, and they can eke out efficiencies by not spending an arm and a leg on renovations."

Relying on simple changes plus brain-power and innovation, making deals with hungry contractors, and staging renovations that are congruent with cash flow, owners can remain competitive. Beyond budget, there's another obvious benefit to conservative changes; they typically do not require an interruption of service, which can drive away customers. And a longer-term approach can lead to more thoughtful and enduring choices.

Cosmetic Changes
Of course, most old spaces can be made new by switching up the color palette, changing the carpet and flooring, and swapping out furnishings, furniture and equipment.

"If there's nothing fundamentally wrong with the space, you can freshen it with something as simple as a new coat of paint," says Wucherer. "Colors age, and a tone that was hip and popular one year will be tired in two or three years' time. Once everybody's done it, it's time to flip to something new." (Cases in point: the ubiquitous brown-and-blue color combo, and '60s-era hatbox lampshades.)

When working with a bare-bones budget, it's important to make affordable changes that also make a statement, says Floss Barber of Floss Barber, Inc., a Philadelphia interior design firm.

"Bold strokes are important, making the interiors simpler but more dynamic with the use of bold color or one terrific wall covering. It's about big moves, smart design, not applied decoration," she says.

Barber recommends getting rid of "fussy details that take committed maintenance" and replacing them with materials that improve with time, like natural stone.

Initial impressions matter, and they last, so throw out the welcome mat, and don't overlook the details.

"A fresh façade, lighting or just some strategic 'editing' of product or clutter that gathers over time can make a guest consider new experiences that might have been passed up before," says Ken Kulas, principal, Cleo Design of Las Vegas. "The first impression of any venue can sometimes invite or turn away potential visitors."

Turn customers off once, and odds are you won't get a second chance to woo them, he says.

In an era of staff cuts at many levels, it's vital to refresh what you have, and maintain what you have refreshed.

"Like anything else, you'll get a lot more life out of something if it's maintained well," says Wucherer. "You communicate with customers through maintenance. If your lighting and ceiling treatments have dust or cobwebs or the wallpaper is peeling, at some point you have to be very conscious of the message that sends."

Tip: Most experts agree that five years is a good time to redecorate, but high-volume, high-traffic environments may need it in three years.

Spatial Changes
In any business environment, be it a fine dining restaurant, a department store, a high-end boutique or a chain supermarket, the floor plan ideally functions in an organic way, not just to move traffic and avoid gridlock but also to create a sense of momentum that will leave no square foot undiscovered or under-utilized.   

A logical but inspired floor plan makes for "intuitive navigation of the floor by the customer," says Barber. "The main generator of customer experience is from the interior environment, which is derived from the floor plan and spatial forms."

These elements direct guests where the business owner wants them to go; sometimes all it takes to energize a facility is a logical change in the floor plan that reassigns space appropriate to need.

Wucherer cites the case of an under-performing food court at a tribal casino. The solution was relatively straightforward. "The place was simply oversized, with most of the revenue generated by one or two outlets," he says. "We reconfigured size to fit demand, relocated the two well-performing outlets, and turned the rest of the space into a nightclub."

Tip: It pays to build in flexibility and utility with multi-purpose spaces, like the restaurant-bar that can become an after-hours lounge simply by dimming the lights and clearing the dance floor.

Paradigm Changes
During the boom years, extravagance verging on excess seemed to rule, at least in middle-class America. Houses turned into monuments, trucks morphed into tanks, and consumers out on the town didn't blink at extortionate bottle service, out-of-sight room and spa rates and other indulgences. They were simply the price of admission.

Now that frugality is fashionable and people are back to eating peanut butter, industry is acknowledging the new reality with an emphasis on "design, operations, marketing and service," says principal Paul Heretakis of Westar Architects.

"In the past, it was always about outdoing someone else. Developers would find a space and say, 'OK, I'm going to spend $15 million.' Those same people are now coming to me and saying, 'We found a space; we're going to keep as much as we can; we can spend a million to $2 million.' With limited money to spend, you make sure you're getting value across the board."

Wucherer agrees. "Long story short, there was such energy and such competition in the industry before that it turned into a frenzy. Now people are looking at value, who their customers are and how they can deliver a project that customers can really appreciate."

And afford. Reflecting the consumer mindset these days may be more important than ever; in many cases, the message going out from restaurants, retailers and other business owners is a Clinton-esque "We feel your pain," says Heretakis. That message is being delivered not only at the bargain bin and the half-price happy hour but also through design and decor, where grand is giving way to lower-key, friendly and approachable-at least in some venues.

In Las Vegas, for example, where restaurant revenues have toppled by half in some cases and thousands of jobs have been lost since early 2008, owners are offering far more value. Yet some nightclubs are doing well, says Heretakis, "because two or three guys will still get together and spend $500 on a bottle of liquor over five hours. That said, people these days don't want to spend $400 on dinner, which is only a 90-minute event.

"What everybody's focusing in on is marketing, branding and enhancing service, operations and product to gain market share, as well as slight design changes that can speak to the brand."

Barber seconds that emotion: "Project budgets are tighter, schedules are shorter, and owners are faced with greater risks to their success. As a result, there's a greater emphasis on customer service, customer comfort and brand recognition."

Tip: Create value with discounts or other deals to maximize the value of renovated spaces.

Lasting Changes?
The president of Vegas-based Bergman Walls & Associates does not agree that the majority of RD&E business owners spent recklessly during the pre-recession party.   

"I don't know too many people who just threw the money away, whether they were our clients or someone else's," says Joel Bergman. "What's really happened now is that people are being more sophisticated about where they're allocating their funds.

"We have clients who are still developing restaurants and bars and entertainment concepts, and I'm not being asked to cheapen anything," he says. "No one has said, 'Listen, this has to be done on the cheap.' Projects are always done with an eye towards the best value for the dollar-and thinking big doesn't necessarily mean you have to spend a lot of money. Being creative includes spending money wisely and still getting the razzle-dazzle. That's the same attitude we would have taken two years ago, and it's the same attitude we'll take two years from now."

Though economic realities may demand that large-scale projects be tabled, planning itself is not on hold. It's the pace of execution that's changed.

"It's interesting right now," says Wucherer. "We're working with a client now who is asking us to look ahead two to three years and implement their renovation plan in steps. That way, they don't have a huge interruption of service to the client, meaning they don't have to alienate people and win them back. They're growing out of cash flow, so they don't have to leverage a lot of money to freshen up the space. We're helping them to take a number of steps, taking a full holistic approach to freshen and modernize their facility. It's a long-term plan to achieve growth over the long run."

While the new frugality may not last-and it has never lasted, despite multiple recessions in the 80 years since the Great Depression-Heretakis believes the current crunch will "definitely change everybody's thinking for the next five- to 10-year period, at least."

Kulas, who says owners are "holding their breath as the economy recovers," believes longer-term, judicious planning will ensure longer-term, "well-thought-out" success.

"We've been spoiled in the past with unlimited choices and suppliers for any type of product or service," he observes. "The competition has been increased, and with that, everyone has to be more clever or be perceived to provide more worth.

"The same old game of 'business as usual' will no longer apply, and owners will have to work harder or invest back into their businesses to be able to stand out in a crowd. The opportunity to re-invent is not only an opportunity, but a necessity."

Tip: Measure twice. Cut once.

By Marjorie Preston

Marjorie Preston is a contributing editor of Global Gaming Business magazine and managing editor of Casino Connection Atlantic City.

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