In the current landscape of hotel development, where construction is up 7 percent year over year, developers are facing intensified logistical challenges. The primary goal for hotel owners and developers is to avoid overextension while navigating market uncertainties. Below are three key strategies hoteliers can employ to secure crucial deals in 2025 and beyond:
Strategic Partnerships
Hoteliers should seek partnerships with proven entities capable of performing due diligence and offering advisory services in today's shifting economic climate. A crucial partner for success is to engage a third-party project management firm who can provide value by:
- Leading projects and orchestrating the team scope and their roles.
- Developing the correct group of consultants based on the asset class, condition of the asset, and scope of work required to meet both ownership and brand requirements.
- Providing collaboration on project scope, budget, and schedule development.
- Negotiating work scope with brand partners.
- Testing flexibility in Property Improvement Plans.
- Focusing on revenue-generating opportunities.
- Establish cost thresholds for ownership involvement.
Building the proper team and incorporating them at the beginning stage of development or an acquisition is key to understanding the costs, scope and timing needed to execute ownership objectives.
Clear Communication Protocols
Maintaining effective communication with all parties is crucial for smooth project acquisition execution. As part of the protocol, hotel owners must:
- Establish preferred communication methods such as email, text, phone or video chat.
- Clarify contact points and escalation procedures.
- Confirm the level of reporting hotel partners are comfortable with.
- Establish timing of reporting (i.e. weekly, bi-weekly, monthly).
- Establish required reporting content and level of data provided.
Setting clear communication channels is an important key for autonomy and oversight to allow team members transparency to meet contracted deliverables.
Logistics, processing and execution of capital plan
Hoteliers can overcome the challenge of overseeing multiple aspects of any capital project—or multiple assets simultaneously—by partnering with the right project management firm team. Hoteliers should locate teams capable of:
- Providing one point of contact to lead all stakeholders to meet their overarching objectives.
- Preventing or minimizing challenges as that could impact project delivery time or feasibility.
- Minimizing delays due to unexpected existing conditions that are found during the capital execution.
- Preventing or notifying ownership of potential pending budget impact on approved allocated funds.
- Ensuring ownership remains informed about all aspects of capital projects.
Setting up the correct processes and having proper reporting and oversight are key to meeting all project milestones today, as inevitable challenges will occur that impact all aspects of the development process.
By implementing these strategies, owners can put themselves in a position of strength and navigate the complexities of hotel development and capital expenditures in 2025 and beyond.
Bradley Czechowski is project executive/partner at H-CPM.
This article was originally published in the May edition of Hotel Management magazine. Subscribe here.