Panelists at the 2018 IMN New Construction & Development Conference discussed strategies and solutions to address rising development costs. Below are a few of the things they had to say on cost-effective solutions for hotel development.
“With the cost of land, more development is going towards select-service and limited-service hotels. You want to be able to get more revenue-producing square footage on a lot than you would normally get by building extra meeting rooms or food-and-beverage facilities. Developers are looking towards smaller hotels, more defined products, and controlling costs by going with a brand,” said Cynthia Olcott, the president and CEO of Horizon Hotels.
“We are looking at modular construction to help projects open in a timely manner, because there’s just so much uncertainty. At least you know that you’re going to be open […] and don’t have to worry about challenges with labor because a lot of construction is handled by the modular factory,” said Alkesh Patel, the founder and CEO of Evergreen Hospitality Development Group.
“We built an in-house project management team, which has allowed us to keep much stronger control on cost, on timing, and the relationships we have with our general contractors. Even with that, costs are going up. We look at the risk/reward for the projects that we’re doing. Given that increased risk, we’re trying to bring down risks in other ways,” said Abraham Hidary, CEO of Hidrock Properties.