The uk hotel industry is going through a time of unprecedented prosperity, according to cost consultant Davis Langdon & Everest and hotel specialist bdo Hospitality Consulting. uk hotel profits rose 20 per cent and annual room occupancies increased to a record 75.6 per cent in 1997. Demand, they predict, will continue to rise, but so will costs - by 15 to 20 per cent in the two years to Spring 2000.
Now is therefore an apposite time for their production of the slim but fact-packed volume Quality, Cost, Time -creating a successful hotel. The idea for the publication grew out of a series of workshops that the two organisations ran together two years ago. They felt that their advice could be valuable to a larger audience than just the professional attendees. Hence the book which, they say, was also an educational process for them, as it required an enormous amount of research.
Aimed at operators and all those involved with the design and construction of hotels, the book is, said Trevor Ward, joint managing director of bdo Hospitality Consulting, 'designed to give hoteliers and investors a comprehensive grasp of the technical complexities of construction'. Any hotel, he added, 'must have the correct balance of quality, cost and time'.
Information which is useful for clients is, of course, also of value to architects. In this case, it both gives an insight into the hotel business and a rule-of-thumb guide to costs.
The book starts with an introduction, outlining the importance of construction costs and explaining that 'the developer is also faced with balancing three important, seemingly separate, but interrelated factors when assessing construction costs: quality of the end product, financial cost and development time. A particular emphasis on one factor is likely to have a detrimental effect on the others.'
It then outlines the factors affecting construction cost levels, and provides tables of indicative construction costs for budget, mid-market and luxury hotels.
Next it looks at the spatial efficiency of various building plans. For example, a rectangular slab block with a double-loaded corridor (rooms opening off both sides) will typically have 40-50 rooms to a floor, a wall/floor ratio of 0.4 -0.5, and a grossing factor (the percentage added to the total area of guest rooms and bathrooms on the guest floor to provide for circulation, services distribution, maids' rooms etc) of 0.2-0.3. In contrast, a tower layout, with a single-loaded corridor around a central service core, will typically have 16-24 rooms to a floor, a wall/floor ratio of 0.35 - 0.45, and a grossing factor of 0.35 - 0.45. The book goes on to show the effect of the grossing factor on the average room cost.
Since bedrooms are not hotels' only generators of income (typically, outside London, they generate 50 per cent of the total, whereas food and beverages generate 43 per cent), it is important to consider other aspects as well. Typical room sizes are given for elements such as conference or leisure facilities in different classes of hotels, and there are figures for the changes in cost according to overall space allowances.
A warning is issued in the section on furniture, fittings and equipment that, as a result of poor definition of budgets, these can be the source of major cost increases.
Next comes an assessment of the various procurement methods, and a natty chart which scores traditional lump sum, design-and-build and construction management contracts for economy and for certainty, against time and price, and in terms of design quality and specification quality. Not surprisingly, design-and-build has the highest overall score, but lags behind the other approaches in terms of quality. Construction management falls behind the traditional lump-sum contract in almost every category, but the report says: 'Management contracts are best suited to complex projects where additional management and co-ordination resources are necessary to retain project control.'
The report tackles the thorny topic of capital allowances before its conclusion which says that 'to meet guest needs it is fundamental to understand and accurately forecast target market conditions and characteristics.' It describes construction costs as one of the most controllable elements of the development and says 'although the construction cost may be variable, the overall control of costs remains within the grasp of the developer. The production of a comprehensive brief, the appointment of an experienced design team with hotel experience, good decision-making at all stages of the development process and a coherent approach to cost control throughout the design and construction process will increase the certainty of overall project cost, and therefore profitability in operation.'
Appendices include adjustment of construction costs for inflation and regional adjustment factors, as well as a description of the roles and responsibilities of the parties in construction contracts.
Quality, Cost, Time costs £40.00. Contact Eve Theron at Davis Langdon & Everest, tel 0171 497 9000 ext. 2855