Mr. Roedel, III

Development & Construction

Advancements in New Hotel Construction

By Fred B. Roedel, III, Partner & Managing Member, Roedel Companies, LLC

New products, techniques, and processes are always being developed in the construction field with the objective of improving quality, reducing total cost, and decreasing the amount of time it takes to open a hotelís doors. We all know that the sooner you can open your hotelís doors, the sooner you can develop free cash flow.

New construction advancements range from alternative materials and pre-fabricated systems to environmentally friendly alternatives. They improve new hotel developments not only from the construction perspective, but from the operations perspective. Evaluating new construction products, processes and techniques is a critical step when putting together a new hotel development. The most important thing, however, to remember is that the value you will ultimately gain from embracing a new construction product or approach is directly related to the amount of time and energy you invest in educating yourself and everyone on your development team about it.

How the latest construction products and techniques can influence a new hotel development

There are two important steps when considering using a new construction product or approach in your hotelís development. The first is to ensure that you have a solid grip on the core objectives of the project. It is essential to understand its true economics and to be disciplined when it comes to designing, building, and operating a property that will reliably perform to your investment objectives based on the time you plan to own it. The second is to take the time to understand a product or approach and the value it will bring to your development. Some processes in particular are so new that there are limited numbers of consultants and contractors who understand them. When designers, contractors, and even operators do not fully understand new construction products or approaches, the likelihood that you will realize the full a value of using them in your projectís design is dramatically reduced.

Time

Every new hotel development project must have a well designed and coordinated t plan in order to meet timelines. When developing a projectís timeline start with the processes and systems you know will allow you to most effectively develop a time sensitive construction schedule. Next evaluate new construction materials, systems and processes that could improve the timeline. It is important to note that in order to be able to correctly evaluate e new construction offeringsí value that you must allow time to educate yourself and all parties involved in the development about them. This learning curve must be factored into your timeline.

My company completed construction of a new 81-room, four-story block and plank hotel with an attached pool building that incorporated two newer systems, integrated concrete forms and pre-built bathrooms, in New York in July 2010. Site work started in October and the hotel opened for business exactly nine months later in July. Originally we projected that the use of the new systems in the project would result in a 30 day reduction in the overall development time-line. We, however, ended up realizing a 45 day reduction (including the operations component) as a result. We added almost 30 days to our pre-development period to make sure we clearly understood the two new systems and that all of the designers, contractors and our operations people did as well. This time investment resulted in better coordinated plans, better written and estimated scopes of work and more reliable construction and operating budgets. The end result of our embracing new construction technology and ensuring that every member of the construction team understood how to use it was that the overall development time-line for the new hotel was reduced.

Cost

There is no question that the cost of developing a new hotel is critical when it comes to meeting business objectives. We evaluate cost from both the actual development and the time it takes to begin operations.

New construction advancements can positively impact a developmentís cost from both a material and labor perspective. From the material perspective there is a consistent flow of new that can replace older technologies at an equal or lower cost, i.e. PEX piping versus copper and Styrofoam concrete forms versus concrete block. In todayís world where raw material costs can immediately impact a material cost, it is imperative to have a handle on acceptable alternatives. The challenge isnít necessarily finding an acceptable alternative material, it is in finding companies that understand the technology and can properly install the product so you will realize its full value. Remember, the newer a technology, the fewer the people who will understand and have experience with it.

The cost of the new hotel development in New York that I mentioned earlier was positively impacted through the use of new, integrated construction technology. Its cost was reduced because the nature of the new construction products required significantly less labor, equipment and material investment than traditional products. For example, when we compared the price of the pre-assembled bathrooms to a traditional fit-out by various trades, there was a premium for the pre-assembled that we deemed worthwhile since using them would enable the hotel to open 30 days sooner. Since the hotelís financial projections showed it would conservatively produce $2,000 a day in free cash flow from operations we knew that its opening 30 days sooner would generate $60,000, a figure that would more than offset the higher cost of the pre-assembled bathrooms. In actuality our electing to use a variety of new construction products in the hotelís construction enabled it to open its doors 45 days sooner than was projected, which further improved its operating cash flow.

Quality

Newer construction technologies and systems can improve the overall construction quality of new hotels and improve their long term operational quality. In order for this to happen, however, every detail of a new hotelís design and plans must be as close to perfect as possible, which will impact its final structural quality and how smoothly it will operate. Too often the lack of understanding of the long-term compatibility of both new and traditional building components and products leads to problems both during construction and when it comes to longer term maintenance issues.

How the latest techniques in hotel construction can influence a renovation

Advancements in construction materials, systems and processes can be equally valuable in a hotel renovation. For example, pre-fabricated components reduce on-site construction time and new materials can be less expensive than traditional ones and installed more efficiently.

Whether you are undertaking building a new hotel or renovating an existing hotel, advancements in the construction industry can positively impact your project. When implemented correctly they typically shorten timelines and reduce long-term operations and maintenance costs. The result is more free cash flow.

Mr. Fred Roedel is a Manager of Roedel Companies, LLC along with his brother David. He shares the responsibility of developing and implementing the annual strategic plan of Roedel Companies. He also shares the responsibility of approving the final design, budget and timeline of any asset developed. Mr. Roedel is President of ROK Builders, LLC, the wholly-owned Construction Management subsidiary of Roedel Companies. In this capacity he is responsible for developing the strategic and annual plans of ROK Builders. Mr. Roedel, III can be contacted at 603-654-2040 ext. 105 or FredRoedel@roedelcompanies.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
RESOURCE CENTER - SEARCH ARCHIVES
General Search:

DECEMBER: Hotel Law: The Biggest Challenges

Mark S. Adams

The relationship between hotel owners and managers continues to evolve. Hotel management agreements historically were long-term. Fifty to sixty year terms were common. However, in the last few years, hotel owners have successfully negotiated shorter contract durations and other more favorable terms, even from the largest and most sought-after major brands. This trend is likely to continue and expand as brands realize that hotel owners have the power to terminate so-called no cut, long-term hotel management agreements, despite contrary provisions in the contract which courts now routinely ignore as a matter of public policy. READ MORE

John R. Hunt

The past year has witnessed a continued surge in the number of federal wage and hour cases filed against businesses throughout the United States, including those in the hospitality industry. At the same time, the U.S. Department of Labor has engaged in enforcement initiatives directed at hotels, restaurants and bars. All of this has occurred against a backdrop of proposed regulatory reform that could affect the way in which hotel and restaurant operators compensate their employees. This article reviews some of the more important developments in these areas. READ MORE

William A. Brewer III

Tension between hotel owners and hotel management companies comes as no surprise during tough economic times. But even in times of improved economic prosperity, some hotel owners are intolerant of management companies that fail to manage assets in the most effective and profitable manner possible. This results in certain owners seeking, or being compelled, to convert their asset to a different brand, or in some cases no brand at all. They do so to protect their long-term economic interests in markets that have proven to be cyclical. In this piece, we explore important considerations regarding the respective rights and responsibilities of owners and managers in such circumstances. READ MORE

Lonnie Giamela

Retaliation lawsuits are the most common claims brought against employers before governmental agencies and are increasing in frequency in the civil court system. According to the Equal Employment Opportunity Commission (EEOC), in 2013, a retaliation claim was made in 41.1% of all charges submitted to the EEOC. This is more than discrimination based on race and more than discrimination based on disability. Even more concerning is the consistent uptick in retaliation allegations. Retaliation claims have increased in number every year since 1997. So, what can employers do to protect themselves against this ever-growing liability? First, employers must understand what retaliation is. Next, employers must be able to issue spot when a particular set of facts poses a high risk for a retaliation claim. This article will attempt to do both. READ MORE

Coming Up In The January Online Hotel Business Review


Feature Focus
Mobile Technology: The Necessity for a Well-Defined Strategy
Mobile technology has altered the way the world does just about everything. With mobile devices in our hands (smart phones and tablets) and media and information up in The Cloud, the possibilities for immediate, worldwide, personal access are limitless. Smart mobile devices are dictating how we live our lives and as a result, these developments are game-changers for all businesses, but especially for service industries, including the hotel sector. These advancements are literally redefining how guests interact with a hotel in virtually every aspect of its operation, and savvy hoteliers who are implementing the latest mobile technologies and best practices in each critical channel will steal market share from their competitors, decrease dependency on their Online Travel Agents, and generate incremental revenues which will substantially increase their bottom line. A well-defined mobile strategy is no longer a "nice-to-have" but an essential weapon in an industry that is evolving at a blistering pace, and those operations that are slow to respond do so at their peril. The January Hotel Business Review will examine which mobile strategies some operators have adopted in order to meet these challenges, and will report on the solutions that are proving to be most advantageous for both companies and their guests.