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The Future of Hotel Construction: Where Is it Heading?

Concept of construction and design. 3d render of blueprints andWith a market share of around 10%, the United States is the second largest construction market worldwide and continues to grow. Many manufacturing and industrial sectors are experiencing rapid growth, which is to be expected — but what’s unexpected, experts say, is the consistent construction of new hotels and hospitality structures in spite of “costly resources and limited labor.”

“With so many projects being executed at once and only a limited pool of resources and labor to tap into, costs continue to climb,” writes Elliott Mest on Hotel Management. “Such challenges may have driven some developers to turn to alternative means of construction in order to save on costs, but what hoteliers are really after is a faster path to market.”

But there are a number of new construction innovations that can lessen the financial burden of new hotel construction, even with multiple projects. Modular construction, for example, is being embraced as a sustainable and affordable alternative to traditional construction. In fact, nearly 40% of contractors surveyed said that prefab and modular construction are growing parts of their companies as well as part of their future strategic construction initiatives. Permanent Modular Construction “PMC” is 60% to 90% completed in a factory-controlled environment, and transported and assembled at the final building site. In the context of the hospitality industry, hotel rooms are purchased in bulk from a warehouse and shipped to the site to be finished.

Of course, modular construction in the hospitality doesn’t come without its potential for drawbacks and holdups. Most of the time, costs are underestimated, which can slow projects significantly or even bring them entirely to a halt. While this can be potentially prevented by working with an experienced modular manufacturer, it’s even more important to overestimate the budget and leave room for overspill.

“Typically, underwriters will approve invoices for a contractor after their work is installed in the field,” said Michel Gibeault, VP of business development at High Construction. “A modular developer wants to be paid by the number of boxes they produce because they can’t afford to make all of your hotel’s 120 rooms all at once.”

But here’s what developers are absolutely sure of: even though deals may be becoming more of a challenge to sign, the bottom line is that they’re still happening. This means that investments in the hospitality industry as a whole are still strong. While the National Association of Realtors the average home sold by an agent in 2017 brought in $249,000, hotel, motel, and other hospitality construction projects and sales typically range into the millions.

Another hospitality trend still going strong is the dual-build hotel construction trend, i.e., building a hotel that serves two distinct purposes.

“While some hotel companies are loosening up on brand requirements with regard to materials in order to remain flexible on costs, dual-build hotels are becoming more common as a way to retain value while providing two distinct products,” writes Mest.

This solution is particularly ideal for projects that aren’t a good fit for modular construction. And regardless of the way new hotels and motels are built, they all need to take the same precautions when it comes to fires and other human safety risks. In fact, hotel and motel fires result in $76 million in property loss every year.

Needless to say, there’s no limit to what the future of the hospitality industry is capable of. For now, it’s sticking to modernized spins on classic, tried-and-true construction methods.