The U.S. hospitality industry is radically evolving, being shaped and driven by the dynamic environment in the country. Hotel owners are continually improving their business strategies to be more competitive.
Hospitality intelligence research & solution provider, STR, established in their June 2019 report that approx. 202,000 new hotel rooms will be added by the start of 2020. STR also reports that another 225,000 rooms are in the final planning phase, while another 229,000 will be added to the early planning phase by the end of 2019.
The great aspect of the US hospitality industry is that there is a good mix of both sole ownership and brand owned hotels. While these hotel owners may have considerable experience with hotel openings, there are however certain roadblocks that arise in every launch process. These delays can have both financial and reputational implications.
The Five Stages of Hotel New Build Development
Al Robert, Project Management Lead at Advanced Hospitality Technologies Inc. discusses that there are five essential stages of every hotel new build:
1) The Concept Stage – this is the primary stage when hotel owners select the site and the concept of their hotel. The project management team discusses and formulates basic strategies to meet completion targets.
2) Site Appraisals and Financial Feasibility Phase – the second stage is a comprehensive viability study of the hotel new build. This is also when hotel owners or the project manager consult with the relevant authorities for approvals or changes.
3) Hotel Design Phase – at this stage project managers submit the architectural design, floor planning and technology mapping for building authorities to obtain approvals for the hotel.
4) Construction Phase – the hotel is now approved and ready to build. This is the time to purchase technology & equipment, inspect buildings, and check other facilities before commissioning the new hotel construction. Once the checks are complete the hotel goes into the construction phase.
5) Pre-opening Phase – this final stage is when control of the new hotel is taken from the building contractors. It is now time for the final preparation for the hotel opening. The hotel management usually works on brand positioning, recruitment and SOPs & operational standards necessary for the hotel to operate.
A PwC research identifies that almost 60% of hotel new build projects experience errors in the pre-opening stage. These are largely attributed to the following factors:
1) Missed deadlines & delays
2) Changes in scope & design
3) Deficient resources
Hotel Owners Pre-Launch Checklist
Depending on the context of the discussion this checklist can be endless. Since we are discussing technology management and general contracting of technology, we will stick with only four relevant factors.
Outsourcing Hotel Technology Management is the Way Forward for Hospitality Businesses in 2020
Pre-opening budgets are an essential element of a hotel launch since it estimates the expenses of running the new hotel, like staff recruitment, supplies, maintenance, and other contingency plans. The issue usually arises when the hotel management over-budgets or under-budgets these expenditures.
Hotel management companies will usually provide hotel owners with all available expense data from similar builds. Hotel owners must also provide technology management providers with all activities & operations to assure transparency of budgets. This is usually achieved by requesting each department to develop its own budgets.
Advanced Hospitality Technologies Inc. offers a proficient team of project managers, engineers, finance managers, and business managers to help your new hotel build to achieve a swift launch process.
Managing the pre-opening phase
There can be a massive confusion in case there isn’t proper oversight & management at the pre-opening phase. The urgency of tasks, operations through technology, malfunctioning systems, authorization to use technology etc. are all very critical for hotel managers.
A general hotel pre-launch checklist usually addresses the following:
- Establish staff tasks & responsibilities
- Monitor deadlines, progress & delays
- Closely track the pre-opening budget, expense reports, and finances
- Schedule regular team meetings to ensure expenses are kept in line, construction is on scheduled timelines, and staff communication is flawless.
The important thing to remember when managing the pre-launch process is that the more information a hotel owner has, the better the decision making. A wide range of technology related, supplier related, and process related issues arise at pre-launch.
Most hotel owners choose to contract a “general contractor of technology” or a professional “hotel technology manager” to handle this stage of the hotel launch. These professionals are gifted with real-time knowledge & experience on hotel new build pre-launch stages, allowing you to have complete peace of mind while your hotel completes the pre-opening stage conveniently.
Marketing, Sales & Distribution Plans
Every new hotel needs creative marketing campaigns, sales strategies, and distribution services to carry its brand name to the world.
Distribution channels like AirBnB, Booking.com, TripAdvisor etc. are excellent ways to attract and inform travelers about your new hotel. These distribution services require going into contract, therefore it’s a great idea to have your hotel technology managers and marketing teams develop multiple partnerships. Do remember that this is a long process (up to 3 months), so ensure this is part of the construction phase.
Establishing marketing & sales strategies is more relevant when you are during the pre-launch phases. This is when you literally lay the foundation of your hotel ‘business’, since this is where your brand with be positioned and discover its identity.
Market segmentation should be considered well before, preferably, during the hotel design phase. This is the basis of your hotel’s design including the technology integrations, its lobby, rooms, security and everything else.
HotelNewsNow debate in their article, that this is the stage where hotel management can execute their first few marketing promotions like soft openings, discounts, free trials, etc. Owners should consider improving ADR (Avg. Daily Rate) while increasing occupancy.
This is the most crucial aspect for a new hotel build’s budget since it will be the largest expense on the Profit & Loss statement.
Hiring staff should technically start at the hotel design phase. This is usually where you need managers and staff members to maintain records and oversight of the construction process. Other staff are on boarded as the hotel new build is completed.
Hotel owners are also required to ensure that hired staff are adequately trained and equipped with necessary brand standards and hospitality best practices. This training and development is also an on-going process to ensure staff are equipped with the necessary skills to operate technology, process payments, deliver outstanding service, and keep guests delighted.
Hotel management must answer several important questions when developing a staffing plan for hotel new builds. These can include:
- What are our required staffing plan for the hotel?
- Can we attract the talent we need to be successful with our salaries, wages & benefits?
- What are our negotiating points for management contracts, hiring policies and other human resource expenses?
- Are there unique issues that can affect staff hiring decisions?
- Are staff on-boarding times long or short in this location?
- Do we have adequate recruitment and training facilities available?
I hope your found our checklist useful for your new hotel build.
At Advanced Hospitality Technologie Inc. we are always there to help you develop winning strategies for your new hotel builds. Our exclusive team of hospitality managers, technology managers, project managers, engineers, and support teams keep your hotel new build projects on schedule.
Get in touch with our proficient team today, until next time … see you again soon.
Advanced Hospitality Technologies is a leader in Hospitality Technologies. We have an award winning benchmark for providing affordable, reliable and most advanced hospitality Technology Solutions.