The ideal time for owners to start major capital projects was six months ago, but the combination of a worldwide materials shortage, a scarcity of available labor and the uncertainty about post-summer travel has held capital projects back from fully picking back up. Now owners are facing the reality that if they wait until business improves to resume construction, they will struggle to secure the resources they need. The best option for a hotelier planning a project in the next year is to start pursuing it today.
Below are three steps owners should take toward resuming construction during the balance of 2021 and beyond:
Clarify Requirements
Brands have kicked product improvement plan requirements down the road for months during the pandemic, but this grace period is running out. The scope of branded requirements may have shifted in a way that benefits owners, and brands can help identify what to prioritize as well. Some hotel brands have unveiled new prototypes and layout options during the pandemic, which may provide avenues for reduced capital and PIP costs. Additional resources may be available to owners through branded support, making contact between owners and brands a must.
Define New Timelines
The time delays for both construction materials and furniture, fixtures and equipment could be as long as an additional four to five months over standard delivery cycles and many hoteliers have an obligation to update their properties within this period. As a result, consideration should be given to procuring any required material that is available and storing these items while waiting for the delayed products to arrive. This may be the most viable option to stay as close to schedule as possible, minimizing both labor and revenue disruption.
Expect the Unexpected
Despite parts of the supply chain gradually being restored as recovery from the pandemic continues, further delays and unexpected encounters are bound to occur. The cost to transport materials has also created a substantial challenge to schedules. Owners should strategize with their team in advance to review alternate transportation/logistic solutions around these potential delays.
Ultimately, owners need to accept that for the foreseeable future it will take a bit longer to execute their plans and that prices are likely to fluctuate wildly over the next 12 to 18 months. Communication and flexibility will be the driving forces for success during this period.
Stephen Siegel is a principal with H-CPM.