Hotel Build Cost Guide.pdf

Leisure + CultureHotel Build Cost Guide Maximising Value Contents 01 Introduction 04 02 Design 08 Design Guidelines 12 Area Schedule 26 03 Cost 32 Cost Drivers 36 Cost Planning 46 Cost Models 52 04 Procurement 66 05 Summary 76 06 Contact Details Back Cover Introduction At AECOM we offer a range of services that meet the This guide explains development and asset the relationship management needs of hotel owners, operators and between the developers from initial feasibility design and the through to planning, design, construction and operation. costs of hotel development and Before there is a design, there is an idea for a hotel. Assessing the demonstrates feasibility of a hotel development the benefits of requires you to understand what the market opportunity, needs obtaining cost of the market and cost of the advice throughout development are. each stage of the development lifecycle. 4: INTRODUCTION . . During the design phase. the cost consultant’s advice will ensure that costs are being allocated to those parts of the hotel that will deliver the best return on investment over the lifecycle of the asset. INTRODUCTION :7 . By providing an analysis of cost by area and function. the cost construction of the hotel. This consultant is able to provide an requires an understanding of initial cost estimate to inform the various procurement options the development appraisal.Based on outline information Once the design is complete about the type and size of hotel the next step is to procure a product and the amenities that contractor to undertake the the market requires. of obtaining cost advice at each stage of the development process. available to achieve the right balance between price and risk. understanding the way in which This guide does not provide all the design of a hotel can influence of the answers but it will provide the cost can help ensure that the the reader with an understanding correct choices are made at the of the important relationship earliest stages of a project and between the design and the will avoid expensive re-design and cost of a hotel and the benefits cost in use. DESIGN . . Understanding the way in which the design of a hotel influences the cost means that the correct choices are made at the earliest stages of a project and avoids expensive re-design and cost in use. . . Further allowances should be made for the service stations and circulation space within restaurants. functions or and can be converted into lunch banqueting.75 to 1.5m² per seat. This allowance varies between about 1. 0. settings. the function suites. area is calculated on the basis of an area-per-seat allowance. hotels operating at the upper levels a good rule of thumb is to provide of the market can offer up to four or restaurant seats ranging from five different types of restaurants.5 to 2.Design guidelines Food and beverage outlets Food and beverage outlets and Most luxury hotels will have at restaurant requirements vary by least two restaurants but some location and hotel type. for which additional and dinner venues with different provision will need to be made in.2 times the number of Generally. The restaurant dining or adjacent to. 12: DESIGN . depending on the style and mode of operation of the venue. However. there will be a main all- guestrooms. This does not take day dining area that serves as the into account specific requirements main breakfast area in the morning for conferences. . . a The area calculation is made on an minimum size would be in the area-per-seat basis.Lounges and bars Meeting and function rooms A hotel is also likely to have a Ballroom / banquet hall number of lounges and bars. The While many major hotel chains seating capacity allowance for have their own design and area these ranges from 0.0 areas and form part of the back times the number of guestrooms.5 to 2. of a ballroom / banquet hall. The minimum total number of calculated as food preparation seats is the equivalent of 1. Kitchens are seat. storage and support net area of the ballroom / banquet areas are excluded from these hall is in the region of 1. region of 750m². of house and support areas.9 times guidelines for the capacities the number of hotel guestrooms.20m² per area calculations. DESIGN :15 . The general allowance for calculation of the Kitchens.5 to 0. typically has a seating capacity of 400 to 500 people.5 times the number of hotel rooms. function rooms. and size by means of acoustic. sliding / folding partitions. least three of this type of function AV control rooms. junior ballroom. these would be allowed on a size of around 50m². 16: DESIGN . The total a square metre per seat basis. there may be rooms and so on. There should be at stores. general storage. A junior ballroom function and meeting rooms. In addition. a junior ballroom and smaller banquet hall. interpreters’ room. Support areas Function rooms that double up as meeting rooms should be a series All of the above areas exclude of rooms catering for groups of supporting areas such as furniture 20 to 50 people. allowing for changes in shape. Each potential function area must be able to be serviced separately. As a rule of a provision for a boardroom with thumb. capacity of the function / meeting rooms should be in the proportion of approximately 0. the hotel may have 33% of the area of the ballroom. restrooms. Essential for all function suites is the concept of flexible meeting spaces.Junior ballroom Pre-function areas / and function rooms break-out space In addition to a main ballroom / These should be approximately banquet hall. These areas generally have higher or double- • Common facilities such as volume ceilings and pricing should reception. including such outlets in the hotel. nurse’s room • A beauty centre • A men’s and women’s spa • A fitness centre and gymnasium • A spa restaurant / juice bar • Employee facilities such as lockers. Often there are around four to five (a) Business centre. Supporting the main entrance lobby is the (b) Health club / fitness centre lobby waiting area. lounge and restroom DESIGN :17 .3m² per person. examining room and take this into account. which should be a generous • A small conference / space. • A reception / waiting area (d) Front lobby and front office • A secretarial area This covers the main entrance lobby. The area allowance is meeting room calculated on the basis of a square • Small booths / offices metre per hotel room.General public areas The general public area of a hotel (c) Commercial space may include: These spaces are often let out. An allowance Space should be allocated for: is made for 20 people on the basis • An entry area of 2. cashier’s room and counting room.75m length is assumed for service areas include various each workstation at the reception departmental offices. • Safe-deposit box. general office and pantry. 18: DESIGN . 1. A janitor’s room is offices. except for some of the vanity area. There should be minimal the female restroom slightly interior designer’s input for these larger to allow extra space for a areas. support and services areas Provisions should be made for These are the non-public areas of male and female restrooms. stationery storage. with the hotel. As a The administration and guide. front of the counter.5m is allowed for working space the office of the front office behind the counter and a width of manager and credit manager. The spaces occupied under also required to store cleaning this category include: equipment. A further allocation (a) Administration and is made for a reception desk area service areas together with a front office. such as: desk. One workstation is required for every 75 rooms. A width of • Front office support containing 1. 4m is allowed for guest queues in telephone operator’s room. Back of house. . . resident manager. reservations manager. • Accounting offices containing executive boardroom the offices of the financial and storage. banquet food and beverage manager. general office.• Executive offices containing • Catering / banquet offices the offices of the general containing the offices of the manager. convention assistant food and beverage services and secretarial area. market analyst. controller. manager. conference room and storage. group sales and women’s restrooms. office and storage and men’s sales executives. general sales manager. general office areas. public relations manager. payroll manager. assistant financial • Sales offices containing the controller. representatives. area. DESIGN :21 . co-ordinator. accounting work office of the sales director. catering manager. executive chef and room Generally. • Food preparation.(b) Food preparation. kitchens for the various area per seat for food storage restaurants. support • Storage areas containing and service areas storage for dry food. Food preparation and service areas refrigerated beverages. made on the basis of area per seat. chinaware. such as: silverware. beverages. 22: DESIGN . refrigerated food (cold rooms). the service bar. Area in the region of 30 to 50% of net calculations are generally total food preparation areas. utensils and support kitchens containing stewards’ and janitors’ rooms. main and glassware. production kitchens supporting Area calculations are generally the banquet hall and function made on the basis of an rooms. storage areas will be service manager. as a general guide. include support spaces for various ballroom liquor. bakery / pastry supporting the kitchens. and shop and offices for the area per key for general storage. an area equivalent to 40% of restaurant net areas would make up the kitchen areas. departments. Alternatively. room. DESIGN :23 . housekeeper. lost and found. laundry wash. compressor rooms and the like. seamstress. fitting manager. guest laundry area. department. trash holding area. garbage compactor. wet • Laundry areas containing the garbage refrigeration area. valet refrigerated storage for service room. receiving office. purchasing rooms and storage for linen. area.• Service entrance areas • Housekeeping areas containing areas for the loading containing offices of the dock and truck parking bays. can laundry and valet office. soiled linen sorting empty bottle storage. employee entrance area. uniform timekeeper. supplies storage food. storage. and compressor room. housekeeping office for the purchasing clerks. security / supplies. flower shop and uniform-issue rooms. executive and assistant receiving areas. electrical sub-stations. one of areas are generally made on which is normally in the the basis of area per key of basement. the other on the the hotel. paint shop.• Area calculations for • Mechanical areas usually cover housekeeping and laundry two major locations. condenser shop. carpentry air handling units. toilet and the requirements for in-house locker. housed at the basement level if space allows. director. Requirements for upper level or roof space of laundry facilities will vary the hotel. fire control pump rooms. domestic shop. • Mechanical areas in the general maintenance and upper levels can contain the secretary. If so. parts storage. and towels is outsourced. assistant engineer. refrigeration shop. water storage tanks. electrical. boiler laundries are limited to a small rooms. engineer’s office. plumbing / water tanks. basement contain the the laundering of bedsheets engineer’s control room. • Engineering areas containing electrical rooms and wet riser offices of the engineering tanks. number of domestic machines. energy switch and power rooms. TV repair shop. management computer room although these may also be and janitor’s store. janitor room. In many instances. sprinkler tanks. upholstery shop. 24: DESIGN . key shop. between locations and between • Mechanical areas in the operators. electrical wet riser tanks. If not provided in the feasibility study or the business plan. training. toilets. assistant personnel manager. interviewing. dining and recreation areas. For five-star hotels.(c) Employee facilities Employee facilities areas include spaces for: • Human resources office containing rooms for the personnel manager. the number of employees can be calculated on the basis of employees per key. training manager. first aid application and storage. DESIGN :25 . the range can be from 1 to 1. • Employee areas containing staff lockers and shower areas.5 employees per key. The changing and locker areas are generally based on area per employee. be generated quite quickly and fitness. It should also cover the capacity of the health club facilities and the size and number of retail outlets. includes setting the number of therefore. banquet. entertainment lounges. based on data for in advance of the development of similar existing hotels. banqueting and so on) efficiently. 26: DESIGN . Ideally. be based on realistic hotel room bays and keys and numbers. the requirements for a hotel. to check accurate assessment of the space that it is competitive. preliminary budget calculations for a hotel of a particular standard A preliminary budget costing with a stated number of rooms and for a hotel development can ancillary functions (restaurants. distortion of the forecast cost. criteria of major hotels and knowledge of the market. ballroom and meeting facilities. This The hotel area schedule must. Any gross over or under the total seating capacities allowance of areas would cause a for food and beverage outlets. spa. market feasibility study provides a suggested high level area program This can form the basis of based on market requirements. hotels of similar standard in the it is possible to create a reasonably geographical region. design any design.Area schedule Using functional area data The area allowances must of from previous projects and from course be tested against other operators’ standard requirements. . Other standard rooms 1 55 55 (eg twin) B. Club lounge 5 - 5 Total 427 500 Based on the above configuration.Worked example based on a luxury hotel Bays Keys Total bays A. the total number of bedroom bays is 500 and the total number of keys is 427 – about 85% of the total number of bays. Standard guest rooms 1. Suites 1. Queen rooms 1 100 100 3. Accessible rooms 1 20 20 (circa 5% of total room count) 4. Junior suites 2 40 80 2. Executive suites 3 10 30 4. . Presidential suites 5 2 10 5. King rooms 1 200 200 2. from circa 80m² to over 120m² of gross floor area (excluding parking and external areas) per bay.Typical total area allowances for luxury hotels vary around the world.000 to 60. A 500-bay five-star hotel could therefore be expected to have a range of gross floor area of between 40.000m². DESIGN :29 . Hotels in more Western locations tend to have smaller bedrooms than those in the Middle East or Asia. the gross area per bay (including bathrooms) varies ranges between 80 to 115m². 50.60% B.000 to 15. according to geographical location. Public area 10.500 to 30.000m² 55 .500m² 15 .30% C.000m² hotel would be: A.500 to 12.57. from a low of about 35m² up to about 55m² but typically between 40 and 50m² net bedroom area is a good guide .000m² 20 . public areas and back of house for a notional 500- bay. Back-of-house 7.25% administrative.000m² 100% Based on the above hotel floor The net areas of the bedrooms areas.The breakdown between the bedroom zone. support and services areas Hotel total gross area 40. Guestrooms and suites 22.000 . . COST . . . the cost consultant is able to ensure that costs are allocated to those parts of the hotel that deliver the best return on investment over the lifecycle of the asset.By providing an analysis of cost by area and function. . Cost drivers The major cost drivers of a hotel h. the development additional lifts and fire- c. i. One major impact on the cost particularly the extent of of the structure is the location glazing and cladding of the main function room or ballroom. Shape and layout of the introduction of transfer guestrooms zone. it will need a heavier structure. The shape and form of the fighting installations building j. conditions. The external facades. shape. Site location. protection systems as it requires column-free f. The level of sophistication not be located directly below of building services and fire- the hotel guestrooms tower. d. Location of function rooms. The ballroom should e. The storey height – if means of access and visibility exceptionally high. particularly if structures at the base of the this is a tower guestroom tower 36: COST . b. Particular requirements of the space that is difficult and chosen hotel operator expensive to accommodate and is likely to require the g. Position of the hotel in more complex foundations. The level of provision and development include: facilities of rooms a. . the choice of configuration can affect the area efficiency by as much as 20% of the gross floor area. 38: COST . Analysis shows that some shapes and configurations of a guestroom tower yield more cost-effective solutions than others. block.The choice of guest Another area for careful consideration is the location of room configuration the bank of guest and service lifts rising up to the guestrooms. where pedestrian much as 20% traffic can be monitored by the front desk. can affect area These should be located centrally to the guestroom block and the efficiency by as guest lifts should descend into the entrance lobby. of the gross A third major consideration is the configuration of the guestroom floor area. particularly if this is in the form of a tower. In fact. However. It is critical to ensure the design d. double-loaded per floor corridor layout. Obviously.Ideally. Number of guestrooms designed. Corridor configuration is economical without sacrificing the design intent. as it higher the efficiency. Lift location and escape layout. minor differences or inefficiencies can have a major impact on the construction cost. the more affects the wall-to-floor ratios economical the construction cost. the efficiency can drop staircase cores as low as 60%. the c. COST :39 . Due to the multiplier effect of having many floors in the guestroom zone.loaded corridor or atrium b. Shape of guestroom tower. the efficiency of the The following factors must be guestroom zone should be in considered: the region of 75%for a tightly a. for a single. optimum number of guestrooms with a double loaded corridor would be in the region of 16 to 24 configuration. Increases in the bays and panelled or faceted number of rooms per floor can glazing. a cost premium to this and this with its corresponding increase choice should be scrutinised. triangular. but there is lift core to be increased in size. This in turn may require the the often narrow site. 40: COST .A limiting factor of the number of A guestroom tower may take guestrooms per floor is the local various plan shapes. ranging from authority building code requirement rectangular to circular. which is curved or offset. towers will involve higher costs This ratio also facilitates efficient because of non-standard room housekeeping. rooms per floor if only two fire- Curved and circular shaped escape stairs are envisaged. in gross floor and elevation areas leading to an increase in construction costs. an shape is generally rectangular. Architects may opt for an trigger the need for additional approach to maximise views from fire-escape stairs and additional the guestrooms to accommodate lifts. It has been controlled by the distance between proven that the most efficient fire-escape stairs. In a tower. for fire evacuation. . it would be rectangular in shape. 65% or less. The single-loaded corridor configuration is Good workable dimensions are less efficient as the corridor serves only one approximately 4.1m. The set of guestrooms. Efficiency is in the region of 70 to 75%. as it increases the length of the corridors. in the region of 40 to 50m² net area inclusive of sleeping area and bathroom. For a five-star hotel configurations are shown below. with one single corridor serving guestrooms on both sides. 42: COST .Typical guestroom layout Guestroom sizes are generally Examples of different standardised.5m by 9. Efficiency is in the region of width should not be excessive. The double-loaded corridor configuration is efficient. Some developers or designers may attempt to provide larger and odd-shaped rooms which may not be economical. the cost of the structure and affects the external walls of the bedroom zone. COST :43 . more rooms per floor.The offset configuration is the most efficient configuration in terms of accommodating The rectangular configuration is not efficient. Efficiency is in the serve end rooms. with minimum effect on as it requires additional corridor lengths to external walls and finishes. Efficiency is in the region of region of 75% 65% or less. 44: COST . which reduce efficiency. The atrium configuration is served by single- loaded corridors. Though it may provide an opportunity for glass elevators. Smoke extraction and an extra premium for roof construction is a major consideration. there is a cost premium. The corner rooms are odd-shaped. Efficiency is likely to be around 60%.The triangular configuration provides inefficient space for the central core. Efficiency is likely to be below 65%. It is unlikely to achieve efficiency beyond 70% COST :45 . housekeeping and fire-escape stairs are located. where the lifts. The central core. will determine the floor area.The circular configuration may have shorter corridors but it is a challenge to design efficient room space. especially in relation to the location of the bathroom. together with an understanding of the current market trends. and is based on available cost data and past experience of hotel projects of comparable standard. 46: COST . The first stage involves an initial order of magnitude costing or cost appraisal. This usually takes place before any designs have been produced.Cost planning Cost planning is typically done in two stages. The second stage involves more detailed cost planning based on design information procured specifically for the particular project. the hotel is made based on conference facilities. Assuming that both calculations produce answers in the same ‘ballpark’. This produces a significantly affecting the cost per reasonably accurate estimate of square metre. For any such ‘unusual’ hotels. and the amenities the cost per key without perhaps market requires. COST :47 . it is likely the hotel design is reasonably efficient. the estimated developer is advisable to ensure construction cost for the hotel that his requirements have been is calculated. unusually of all functional areas in large or extensive restaurants. overall gross constructed area. for example. This is usually accurately captured. outline information about the suites or other unusual facilities hotel’s market position. health clubs. of a cost per bedroom or key. using historical benchmark data collated from similar projects. be more reliable. a preliminary schedule hotels with.Initial order of magnitude costing Using benchmarked area Our cost consultants are wary of data. Based on this preliminary further discussion with the area schedule. the that skew the comparative recommended type of hotel calculation by increasing the product. An initial done both on a cost per square cost prepared on a $/m² should. metre basis and on the basis however. procure the that yields the required target right contractor and then build and profitability. and the corresponding construction cost. a budget fit-out the hotel. for. repeated a number of times flow forecast is prepared. funding. 48: COST . a construction cost cash.With the preliminary costings in This review process may be place. based until the developer arrives at on the estimated time required to a financially viable scheme carry out the design. In this way. and cost of. The results of this is refined and set for construction cash-flow study give an indication of the hotel and the developer of the likely draw-down of the is given the confidence in his funds throughout the construction viability calculations to give the of the hotel to allow developers go-ahead to proceed to the next and investors to assess the need stage of the project. The construction cost consultant then works with the developer and the design team to review and modify the scope and nature of the hotel design. The construction cost projects. who are well-versed smaller.Detailed cost planning The developer’s design team This may involve a value- should design the hotel to engineering (VE) process. more identifiable and with the various cost drivers of a manageable items. hotel development. that the effectiveness of the hotel building. challenging to make sure that firstly. overall and being challenged. share their knowledge and experience with The cost plan is fine-tuned to try the design team. thereby costs fall within the targeted maximising the value and budget and secondly. All cost elements are consultant costs the design and scrutinised for efficiency in design prepares an initial cost plan that and whether they add value to breaks down the cost of each the hotel. Our construction cost element of the building into consultants. COST :49 . spread of the expenditure is about right – ie the money is being spent on those elements which are customer facing or affect the operating costs of the building – and therefore improve the potential viability of the scheme. carried provide the functional areas out with the construction cost necessary to meet the hotel consultant guiding the designers operator’s requirements within by using analyses and benchmark the constraints of the approved comparisons with other hotel budget. from which the architects and interior designers can then select.The construction cost consultant The initial budgeting process may suggest alternative minimizes time spent pursuing construction methods and design options that are either not advise on the range of products affordable or do not produce the and materials available in the required financial return. Once the preliminary designs are completed and have been checked to remain within budget. This defines the design intent and the agreed budget to which the developer and design team should adhere. the construction cost consultant compiles all the information into a final detailed cost plan that is distributed to the developer and consultants. 50: COST . market that are within the allowable budget. COST :51 . thereby maximising the value and effectiveness of the hotel building. challenging and being challenged.Construction cost consultants share their knowledge and experience with the design team. Cost models* Europe Spain TOTAL USD USD/m2 (GBA) USD/key % 8,544 m2 153 keys Structure and envelope 6,072,299 711 39,688 19% Internal fit-out 1,667,432 195 10,898 5% Building services 11,027,489 1,291 72,075 35% On-cost 7,062,250 827 46,158 22% FF&E 5,819,339 681 38,035 18% External works 263,350 31 1,721 1% Total 31,912,160 3,735 208,576 100% * Cost models based on a mid-market product 52: COST Russia TOTAL USD USD/m2 (GBA) USD/key % 8,544 m2 153 keys 6,493,440 760 42,441 29% 358,848 42 2,345 2% 5,510,880 645 36,019 24% 3,740,300 438 24,446 17% 5,615,579 657 36,703 25% 854,400 100 5,584 4% 22,573,447 2,642 147,539 100% COST :53 United Kingdom TOTAL USD USD/m2 (GBA) USD/key % 8,544 m2 153 keys Structure and envelope 7,800,037 913 50,981 26% Internal fit-out 3,785,507 443 24,742 12% Building services 7,543,701 883 49,305 25% On-cost 5,197,200 608 33,969 17% FF&E 5,819,339 681 38,035 19% External works 263,350 31 1,721 1% Total 30,409,134 3,559 198,753 100% The equivalent product in the Middle East is a budget product 56: COST .465 23% Internal fit-out 3.767 41 2.008 21% External works 351.944 164.778 17% FF&E 5.544 m2 153 keys Structure and envelope 5.022.154.411 100% * Cost models based on a UK mid-market product.243 627 35.250.850 2.Cost models* Middle East Dubai TOTAL USD USD/m2 (GBA) USD/key % 8.309 354 19.885.356.106 25% On-cost 4.754 12% Building services 6.299 1% Total 25.289.147 689 38.100 497 27.284 736 41. 825.051 24% 3.600 1.176.844.800 450 25.800 950 53.373 100% COST :57 .150 64.000 223.051 24% 3.800 950 53.000 4.220 29% 427.Qatar TOTAL USD USD/m2 (GBA) USD/key % 8.544 m2 153 keys 8.800 450 25.792 1% 34.116.129 11% 9.129 11% 8.844.200 50 2.116. 544 m2 153 keys Structure and envelope 5.695 23% Internal fit-out 2.749 100% 58: COST .954 1% Total 21.891 626 34.568.623 2.002 35 1.612 17% FF&E 4.375 585 32.940 25% On-cost 3.002.612.757 21% External works 299.791 12% Building services 5.552.585 423 23.503 139.963 301 16. Saudi Arabia TOTAL USD USD/m2 (GBA) USD/key % 8.345.807 533 29.381. . 327 17 956 1% Total 15.223 100% * Cost models based on a mid-market product 60: COST .589 35% On-cost 2.380.136.544 m2 153 keys Structure and envelope 3.024 9% Building services 5.357 18% FF&E 2.964 13% External works 146.822 454 25.Cost models* Africa South Africa TOTAL USD USD/m2 (GBA) USD/key % 8.808.598.503 250 13.110 1.866 104.332 24% Internal fit-out 1.875.122 655 36.676 162 9.946.660 329 18. 845.721 1% 28.965.360 187.620 1.179 65.981 815 45.136 13% 263.044 18% 3.780 592 33.860 35% 5.464 3.076.544 m2 153 keys 6.Nigeria TOTAL USD USD/m2 (GBA) USD/key % 8.742 450 25.320 9% 10.496.055.611 100% COST :61 .952 292 16.704.529 24% 2.389 31 1. Nairobi TOTAL USD USD/m2 (GBA) USD/key % 8.504 466 26.283 100% 62: COST .003 24% Internal fit-out 1.969 146 8.978.052 1% Total 16.131 8% Building services 5.207 31% On-cost 2.821.450 20% External works 160.281.544 m2 153 keys Structure and envelope 3.354 1.700 595 33.939 108.441 17% FF&E 3.080.440 330 18.243.960 19 1.567.781 384 21. . 000 150.Cost per key analysis Based on a mid-market hotel 250.000 FF&E Excluding FF&E 200.000 0 UK Spain Russia Dubai Qatar Saudi Arabia South Africa Nigeria Nairobi .000 50.000 100. 500 1.500 3.000 3.Cost/m2 analysis Based on a mid-market hotel FF&E Excluding FF&E 4.500 2.000 1.000 2.000 500 0 UK Spain Russia Dubai Qatar Saudi Arabia South Africa Nigeria Nairobi . PROCUR . REMENT . .Selecting a contractor to undertake the construction of the hotel requires an understanding of the procurement options available to ensure that the right balance between price and risk is achieved. . Every project is different. 70: PROCUREMENT .Procurement Having completed the cost planning process. Even the best cost plans will be undermined if the wrong choice of contract or contractor is made or if the design information on which the contract is let is incomplete or of poor quality. the construction cost consultant advises on the most appropriate procurement approach for the particular blend of time. agreed a budget and scope of work and received the go-ahead from the developer to proceed to the next stage. and it is important that the choice of the most appropriate procurement route and the selection and pre-qualification of potential contractors for the project is carefully considered. cost and quality that relates to the hotel project. . Control of based on full bills of quantities or design and quality remains largely priced schedules of work. the interior design with the main building works can reduce the impact on the master programme. Traditional lump sum The cost risk to the developer is Traditional lump-sum contracts. However. which takes time and the overall life of a project is therefore usually longer using this route. and cost managing the work as If properly set up and it proceeds. 72: PROCUREMENT . provide in the hands of the developer and an essential means of letting the design team. Careful planning and interfacing of. therefore relatively low.The three most commonly The main advantage of completing encountered forms of the design before construction procurement for hotels are briefly commences is the fact that the described below: contract cost is established in advance of entering into the contract and work starting on site. for example. they do administered. and complete high-quality hotel. documentation to be prepared before going to tender. this can be a good require all design to be finalised form of contracting to produce a and detailed. the contractor. setting out in detail requirements while leaving a those parts of the finished hotel significant part of the design. It is less often used for luxury. five- star hotels.Design and build The design and build (d+b) approach The contract price is based on needs a clearly stated set of the contractor satisfying these requirements. repetitive types of hotel such as budget lodges and branded mid-market hotels. to the contractor. but not necessarily the may lead to compromises by detail of how the main structure is the builder despite the design put together) but without producing team often being novated to full design documentation. This is a good and usually cost-efficient form of contracting for reasonably standard. that are important to the developer particularly the detailed design or hotel operator (for example. the finishes to the public areas or The perceived lack of control by the performance of the services the developer over quality issues installations. PROCUREMENT :73 . development. much greater involvement by Any savings achieved within the the developer. in dealing with GMP are shared between the individual trade contracts and developer and the contractor package contractors. usually including which developers might see a premium cost to reflect the as a disadvantage. thereby creating an equitable risk- sharing arrangement. This construction management part way through the design approach also does not and procurement process. can provide programme duration of construction. It requires a additional risk he is taking on. Careful advantages but may expose the consideration of all factors is developer to greater cost risks. in a predetermined proportion. before the whole design the management of a specialist is completed. where the work large or complex hotel projects is let under a series of smaller where making a quick start on individual trade contracts under site. (end cost) is not known until the A modified version of this last trade package is agreed. 74: PROCUREMENT . method can be used where. the provide the developer with a contractor warrants the cost by single point of responsibility providing a guaranteed maximum for the construction works. is important in construction management order to minimise the overall company. needed before proceeding down This is because the out-turn cost this procurement route.Construction management The construction management This approach is often used on (CM) approach. price (GMP). the cost consultant will actively participate in the pre-qualification and selection of suitable contractors.Procurement management The cost consultant will be actively involved in establishing detailed procurement strategy to cope with the client’s master programme. AECOM’s experience and global presence allows us to put together the necessary tender documentation and recommend the appointment of appropriate contractors for these packages in a timely manner PROCUREMENT :75 . if required. If some packages of work need to be procured at an early stage to meet the programme. including sourcing internationally. SUMMAR . RY . materials. technologies. We would welcome requires not only an the chance to discuss it with you understanding of the market. and asset management needs To achieve this you need to of hotel owners. design. but also the ability to design and At AECOM we offer a range of procure the right product at the services that meet the development right price. in greater detail. this ensures that you have the right balance between capital expenditure and operating costs. procurement and design and the costs of hotel construction. 78: CONCLUSION . information and guidance for your Successful hotel development hotel projects. the benefits of obtaining cost We hope that you have found advice throughout each stage of this guide a useful source of the development lifecycle. the role of the development and demonstrates construction cost consultant is key. operators and understand the relationship developers from initial feasibility between design and cost and through to planning. Combined with the knowledge of how hotels operate. prices and construction methods.Summary This guide explains the From initial feasibility through relationship between the design. have knowledge of the latest construction and operation. . 000 employees around the world. Europe m: +44 (0) 7768 877382 m: +44 (0) 7795 043872 k. facilities. Leisure + Culture Cost Consultancy. innovation and technical excellence in delivering solutions that create. EMEA for your Cost Consultancy. EMEA Cost Consultancy. Africa m: +44 (0) 7973 347843 t: +27 11 666 2000 hotels portfolio margreet. enhance and sustain the world’s built. environmental. With approximately 45. including hospitality. More information on AECOM and its services can be found at www. natural and social [email protected] Margreet Papamichael Neels Heunis A total fitness programme Economics.ralph@aecom. A Fortune 500 company.com.com paul.com .underwood@aecom. water and government.com neels. leisure. energy. AECOM serves clients in more than 130 countries.aecom. AECOM provides a blend of global reach.papamichael@aecom. transportation.About AECOM AECOM is a global provider of professional technical and management support services to a broad range of markets. culture. AECOM is a leader in all of the key markets that it serves.com phil. local knowledge.com Paul Nash Paul Ralph Project Management. Middle East m: +44 (0)7876 396338 t: +971 4 439 1000 [email protected]@aecom. Kevin Underwood Philip Churchman Global Leader.