MANALAPAN, Fla. — Construction projects continue to change rapidly, with the cost of materials and labor both still rising, according to Ryan Rivett, founder and CEO of My Place Hotels. The shifting dynamics and how developers, contractors and vendors are keeping their projects on track were the topics of a panel discussion moderated by Rivett during this week's My Place convention at the Eau Palm Beach.
In addition to costs, Grant Tjernagel, COO of construction and development company Pro Commercial, cited the increasing turnover rate as another hurdle, and noted that lead times have also expanded.
Todd Heintzman, founder and president of Quest Hospitality Suppliers, agreed that some lead times can seem overwhelming—for example, stainless steel fixtures might need to be ordered 50 weeks out. Still, he said, some lead times are shrinking again, and items that used to take 24 or 20 weeks to arrive can now reach a property in six weeks. “Obviously, it depends on what type of product it is,” he said. “It's all about strategy and planning as early as you can. We're all used to instant gratification, so to speak—pulling stuff off the shelf and shipping it right away. That’s almost nonexistent.”
Aaron Lawson, president of Celtic Services, which has built and owns eight My Place hotels and has several more underway, said communication between developers and suppliers is crucial. His company preorders materials as fast as possible, but even that may not be enough. “We get dates and the dates change from suppliers,” he said. “So we adjust.”
Project Time Frames
In My Place’s earliest years, Rivett said the time frame from “shovel in the dirt to keys in the doors” was between 20 and 23 weeks. Today, Lawson estimates that an 85-unit hotel takes between 10 months to a year to complete.
Quentin Ellis, president of construction at real estate developer TGC Group, said that his company’s other branded projects have between 100 and 122 rooms, and took between 10 and 12 months. “Now we're seeing where 12 to 14 [months] is more realistic,” he said. In order to keep things moving, the company has opted to “break some packages” into different pieces than they would have done in the past. “We've got to go find separate vendors and buy all those little parts and pieces to keep the job running,” he said.
Problem-solving in hotel development is like a game of whack-a-mole, he added, in which issues are never consistent from one project to the next. The best practice, he said, is to start preparing as early as possible and get ready for the submittal process.
Corey Haaland, senior project manager at Legacy Builders, said his company was shooting for a construction time frame of between 34 and 36 weeks, and the process can drag on if municipalities get “too involved” in how a building goes up. Tjernagel said transparency from preconstruction meetings all the way through the final approvals is necessary in that situation. “Get them to understand that we want to build it to code,” he said.
Haaland said the availability of subcontractors can also make a big difference in a project’s timeline. For a recent project, Rivett recalled sending out 7,900 invitations to subcontractors and only getting 70 bids in response. “That's way more invites than we've ever needed to send out, first of all, and probably a third of the typical number of actual bids that would come in on a My Place project,” he said. Heintzman, as a supplier, was sympathetic, but noted that 20-week lead times made things difficult on his end as well. “There's no ‘just in time’ ordering anymore. There's no ‘just in time’ product," he said. "We have to plan and strategize [from] day one and get things ordered.”