How to manage a renovation during a recovery
19 NOVEMBER 2015 7:26 AM
Here’s a look at how to walk the tight rope of handling your renovation with busy contractors, long lead times and short time frames.
The most recent recession is in the distance, and the hotel industry continues to build. Even with business booming, owners are still feeling the effects of renovation cycles that were missed during the recession. This ongoing recovery creates a new set of issues that owners, vendors, consultants and the brands must overcome. Each project is affected by the recovery due to tighter schedules, busier workforce and longer lead times.
- Vendors. In recovery times, vendors tend to have less material stockpiled and readily available for purchase. The orders for new projects are coming in at a fast rate, which results in longer lead times. Factories are still reluctant to increase manufacturing capacity and delivery as they build back their material inventory.
- Brands. During the recession, the brands were flexible on their property-improvement-plan requirements. But with recovery in full swing, brands are pushing new initiatives to be rolled out and installed on properties. There is less flexibility in negotiating PIP waivers as the brands try to take advantage of the good times and insert updated directives.
- Owners. Property revenues were negatively affected due to lower average daily rate and revenue per available room during the recession. This led to less money being collected and saved in renovation reserves. Owners also are burdened with change of ownership PIPs due to increased transaction volume. This means more scope for less of a budget.
- Operations. The hotel operations team wants the renovation work completed as quickly as possible to minimize disruption when occupancy and rates are high.
- Scope. Entering a renovation cycle, the typical PIP scope is being expanded to include deferred maintenance and R&M projects because these projects were cut during the recession, adding cost and time to the projects.
These challenges create extra obstacles to any renovation. Below are a few key strategies that can help you navigate the additional renovation difficulties:
- Pre-select your contractors. Involving your contractor from the beginning will allow your team to work collaboratively and minimize issues during construction. Also, negotiated deals with the contractor allow for a shortened bid period, which will help gain some time in your schedule.
- Fast track items. Whenever possible, get brand approval on long lead items first to shorten the production lead times. Identify long lead construction items to pre-order as well.
- Involve operations. It’s important to work with operations when developing the construction and phasing schedule. Try to determine the ideal plan that will limit guest disruption and work backward from there to create a schedule.
- Budget. Be sure to check and update the budget at the end of each design phase to avoid “value engineering” after bids are received. Value engineering creates design delays in the project especially after the contractors have bid on the project.
- Hire an experienced team. There is no value that can be placed on having an experienced team on your project that understands the nuances of hotels and has exceptional brand relationships. The experienced team’s fees might be higher, but you will get faster brand approval times, lower furniture-fixtures-and-equipment pricing and a faster construction schedule.
Being informed and aware of issues from the beginning can greatly influence the course of a renovation. Proper planning and communication are always the foundation blocks for a successful renovation especially when faced with recovery challenges.
Warren Feldman, AIA, ISHC is Chief Executive Officer of Jonathan Nehmer + Associates, Inc., an international Architecture, Interior Design, and Project Management firm that specializes in the hospitality industry. He has expertise in all facets of Project Management, Architecture, Interior Design, Design Management, and Construction Administration. His experience includes work as Architect and Owner’s Representative in the direction and management of hospitality, commercial, institutional, educational, and residential projects. Complementing his education in Architecture, Mr. Feldman completed his Juris Doctorate from Georgetown University in December 1998 and is a member of the Maryland Bar.
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