New-construction hotel projects always come with similar hazards. Schedule delays, rising labor costs, market risk, and quality control issues can all have a profound impact on a new-build property. With today’s booming lodging marketplace—according to the 2015 STR Pipeline Report, there are 3,808 projects, totaling 457,606 rooms under contract in the United States—hoteliers are facing stiff competition when they open a new hotel, and construction setbacks may give other properties an edge. That is why many in the industry have embraced a new trend that has the potential to reduce these setbacks—modular construction.
Modular construction involves assembling a new building out of factory-created, preassembled pieces. Building a new property with modular components cuts down on labor costs, as well as decreases building time, getting new properties on the market sooner. Modular construction also reduces the risk of material shortages, safety issues, weather disruption, budget overages, and issues with quality control. While certain areas of the hotel are unfinished to allow for electrical and plumbing work, the rest of the building can be stacked together from completed pieces, almost like LEGOs. “We are able to build a complete unit on an assembly line quickly and consistently, which, in turn, allows buildings to be finished faster,” explains Lad Dawson, CEO of Guerdon Modular Construction. “The only downside is that this assembly process is so uniform that it doesn’t allow for much flexibility or customization in projects that use this method.”
Even though modular buildings must be more uniform than other construction projects, the benefits seem to outweigh the drawbacks and it is becoming increasingly popular. Guerdon recently completed three of the five hospitality establishments due to open in Yellowstone National Park before year-end 2016. And, at the pace the hotel and travel industry are growing, it is predicted that the demand for modular construction will outpace supply this year.