Not long ago, a hotel planning a major renovation sent out requests for bids to three general contractors. While two contractors arrived at approximately the same price, the third came in a stunning 30 percent lower.
Not surprisingly, the hotel's owner choose the lower priced bid. However, only days into the job, he became aware that the contractor he selected did not understand the full scope of the work or the budget, nor did he have enough skilled workforce to handle the job or maintain the timeline. As the job progressed, change orders became routine as did costly delays, frustration and shoddy construction. Several months behind schedule, the hotel owner found himself paying more than either of the two qualified contractors had originally bid.
Unfortunately, this is an all-too-common scenario in the hotel industry. While the old truism remains that "Quality May Cost A Little More," the fact is poor quality costs significantly more in dollars and reputation for the hotel and in guest satisfaction.
What can hotel owners and construction managers do to avoid these pitfalls? Here are a few tips:
Qualify all bidders. Never risk your hotel project to an inexperienced contractor. New contractors or even experienced ones that are trying to expand their businesses into hotels often submit unrealistically low bids. Hotel renovation projects present unique challenges not seen when renovating other commercial properties, such as off-hour working times to accommodate hotel guests. Contractors must be able to handle unexpected surprises efficiently and effectively, plus be able to work with the hotel staff, while maintaining a clean, organized and safe environment.
Require a written, detailed renovation timeline with a back-up plan. The timeline should account for the entire scope of work and show how the contractor will minimize impact on guests and business operations. For example, how and when will the contractor remove furniture from rooms before the project begins? How will they re-organize and "construction clean" the rooms before they are turned back to housekeeping?
Request the contractor renovate a standard room before deciding to move forward with the entire project. This provides you with a real-world view into their work process and the time frame necessary. Expect that this "single room" will incrementally cost a little more than if several rooms where being renovated.
What is their ordering and receiving process? Make sure it is precise and that proper materials are readily available prior to starting the job. Also, check that an ongoing flow of materials during the job can be accomplished. Failure to do so will bring the renovation to a dead stop, leaving unfinished rooms out-of-service and resulting in lost revenue and unsatisfied guests.
How are completed rooms reviewed and accepted? A clear and agreed-upon process should be presented with the bid.
How often does the contractor meet with you? The more actively involved you and your staff are with your contractor, the more efficiently issues can be resolved and hotel rooms be put back into profitable service.
In the hotel renovation market, the contractor who offers the best value may not be the one offering the lowest price (initially), but the benefits stack up immediately once the project starts moving forward. The "best value" contractor is the one who submits a complete and thorough bid, who has not cut any corners, and who understands the full scope and project timeline. Good contractors provide value in not only their quality of work and ability to meet deadlines, but also in the good relationships and peace-of-mind they provide hotel owners, staff and ultimately, paying guests.