HTM SERIES COMMON MISTAKES IN HOTEL PLANNING, DEVELOPMENT AND OPERATION HOTEL DESIGN August 2014 By Kai Schröter, General Director © HTM Management Consultancy Common Mistakes in Hotel Planning, Development and Operation HTM is pleased to introduce a new series of Common Mistakes in Hotel Planning, Development and Operation. This series has been prepared in support of owners, developers, architects, designers and project managers of hotels. The following presents the most common mistakes in Hotel Design. It outlines frequent errors and omissions occurring during the design process, which can have long lasting negative impacts on the property’s management, operation and return on investment. Please subscribe to our regular updates at [email protected]. Common Mistakes in Hotel Planning, Development and Operation Hotel developments are different – they are very diverse and quite complicated when compared to any other type of real estate investment and property development. They involve complex and overlapping end- to-end processes, multiple stakeholders, considerable strategic planning and decision making, extensive technical know how and specialist experience in project management, operational equipment, technical services, pre-openings, management and operation of hotels. Hotel developments are risky – they are more time-consuming and costly. By floor space, an average hotel can cost 3 times as much and take 3 times as long to build. 6,500 different items go into a hotel – about 20 into an office block. An average 5 star hotel requires 27 different consultants and around 10‐15% of the budget, the pre‐opening over 10%. Few owners have experience with hotels, few architects specialize in hotel design and few project management firms know how to manage hotel development processes. Common Mistakes in Hotel Planning, Development and Operation Hotel developments require specific know how – they frequently attract financially potent owners with a background in various sectors – real estate, banking, law, tourism and others, and with a great deal of vanity, but little experience in hotel development. This often leads to wrong decision making in conceptualization, branding, design, construction, management, operation…and the failure of the hotel. Common Mistakes in Hotel Planning, Development and Operation Hotel Planning Common Mistakes in Hotel Market Studies Common Mistakes in Hotel Finance Studies Common Mistakes in Hotel Property Evaluation Common Mistakes in Hotel Property Site Selection Common Mistakes in Hotel Investment Planning and Financing Common Mistakes in Hotel Investment and Business Licensing Common Mistakes in Hotel Conceptualization Common Mistakes in Hotel Planning, Development and Operation Common Mistakes in Hotel Branding Common Mistakes in Hotel Architect Search and Selection Common Mistakes in Hospitality Consultant Search and Selection Common Mistakes in Hotel Master Planning Common Mistakes in Hotel Business and Operation Models Common Mistakes in Hotel Operator Search and Selection Common Mistakes in Hotel Management Agreement Negotiation Common Mistakes in Hotel Technical Services Contract Negotiation Common Mistakes in Hotel Project Planning Common Mistakes in Hotel Capital Expenditures Budgeting Common Mistakes in Hotel Furniture, Fixtures and Equipment Reserves Common Mistakes in Hotel Planning, Development and Operation Hotel Design Common Mistakes in Hotel Design Common Mistakes in Hotel Access Design Common Mistakes in Hotel Exterior Design Common Mistakes in Hotel Interior Design Common Mistakes in Hotel Operation and Work Flow Design Common Mistakes in Hotel Public Area and Front-of-House Design Common Mistakes in Hotel Back-of-House and Staff Areas Design Common Mistakes in Hotel Guest Room Design Common Mistakes in Hotel Engineering and Technical Design Common Mistakes in Hotel Food and Beverage Conceptualization Common Mistakes in Hotel Food and Beverage Outlet Branding Common Mistakes in Hotel Food and Beverage Outlet Design Common Mistakes in Hotel Kitchen and Laundry Design Common Mistakes in Hotel Landscape Design Common Mistakes in Hotel Planning, Development and Operation Hotel Development Common Mistakes in Hotel Project Manager Selection Common Mistakes in Hotel Contractor Negotiations and Selection Common Mistakes in Hotel Project Coordination and Implementation Common Mistakes in Hotel Bill of Quantities Common Mistakes in Hotel Quantity and Quality Surveillance Common Mistakes in Hotel Construction and Site Supervision Common Mistakes in Hotel Site Safety and Security Common Mistakes in Hotel Mechanical and Electrical Engineering Common Mistakes in Hotel Utility Conservation and Environmental Protection Common Mistakes in Hotel Planning, Development and Operation Common Mistakes in Hotel Technical Services Coordination Common Mistakes in Hotel Pre-Opening Common Mistakes in Hotel Standard Operating Equipment Budgeting Common Mistakes in Hotel Brand Development Common Mistakes in Hotel Marketing, Sales and Public Relations Common Mistakes in Hotel Human Resources Planning Common Mistakes in Hotel Recruitment, Selection and Training Common Mistakes in Hotel Testing, Commissioning and Handover Common Mistakes in Hotel Planning, Development and Operation Hotel Operation Common Mistakes in Hotel Soft-Openings Common Mistakes in Hotel General Management Common Mistakes in Hotel Strategic Positioning and Pricing Policies Common Mistakes in Hotel Brand Development Common Mistakes in Hotel Marketing and Sales Common Mistakes in Hotel Strategic Communication and Public Relations Common Mistakes in Hotel Promotion and Advertising Common Mistakes in Hotel Sales and Marketing Common Mistakes in Hotel Digital Marketing and Online Sales Common Mistakes in Hotel Distribution Management Common Mistakes in Hotel Customer Relationship Management Common Mistakes in Hotel Revenue and Yield Management Common Mistakes in Hotel Planning, Development and Operation Common Mistakes in Hotel Human Resources Planning Common Mistakes in Hotel Human Resources Management Common Mistakes in Hotel Recruitment and Selection Common Mistakes in Hotel Training and Staff Development Common Mistakes in Hotel Rooms Division Management Common Mistakes in Hotel Food and Beverage Management Common Mistakes in Hotel Operations Common Mistakes in Hotel Customer Service and Guest Relations Common Mistakes in Hotel Finance and Accounting Common Mistakes in Hotel Procurement and Purchasing Common Mistakes in Hotel Revenue and Expense Forecasting Common Mistakes in Hotel Operational Budgeting Common Mistakes in Hotel Profit and Loss Analysis Common Mistakes in Hotel Planning, Development and Operation Critical Areas with Typical Design Errors Hotel Access and Entrance Hotel Exterior and Signage Lobby and Public Areas Front Office and Reception Porter and Luggage Room Elevators, Corridors and Pantries Guest Rooms and Bathrooms Connecting Rooms Disabled Guest Rooms Restaurants and Bars Room Service Meeting Rooms and Banqueting Areas Spa, Gym and Swimming Pool Common Mistakes in Hotel Planning, Development and Operation Receiving and Purchasing Areas Cooling and Storage Facilities Kitchens and Laundry Management Offices and Staff Areas Staff Entrance and Locker Rooms Staff Restaurants and Canteens Guest and Staff Nursery Closed-Circuit Television System Private Automated Branch Exchange System Heating, Ventilation and Air-Conditioning System Water Supply, Treatment and Discharge System Fire Safety and Sprinkler System Main Frame Server and Computer System Property Management System Point-of-Sales System Common Mistakes in Hotel Planning, Development and Operation The following pages present Top 10 Areas only a few of the myriad of with Most Design Errors in Hotels considerations which shall be made in professional 1 Guest Rooms hotel design. Most of them 2 Back-of-House seem like common sense, 3 Guest Bathrooms but one would not believe 4 Fabric and Finishes how frequent they are disregarded. 5 Food and Beverage Facilities 6 Elevators 7 Function Rooms 8 Lobby 9 Entrance 10 Kitchen Source: http://www.wgdarchitects.com/survey/results/results.html Common Mistakes in Guest Room Design We can’t expect architects to know the nuances of operating hotels. So why do we expect them to know how to best design a hotel room in all facets and details? Seems like ‘common sense’, but still happens all too often. Room Design | Some Examples of What Could Go Wrong Too Many Rooms Types and Categories A common misperception is that having many types of rooms increases the choice for guests, thereby widening the target market. The reality is, having many different types of rooms creates confusion and pricing issues, affects marketing and sales, and limits the ability to accommodate large groups. At the same time, it increases room cleaning, fit-out and maintenance costs, eating up owner’s profits. Unsuitable Ratio between Room Types and Categories The ratio between the number of different room types and categories – e.g. single, double, twin or triple room, standard, superior or deluxe room, junior, family or executive suite, connecting rooms, disabled rooms, smoker- and non-smoking rooms…depends on many factors, which the developer or architect do not necessarily know. This can lead to the difficult situation, where the owner is forced to choose between low occupancy or decrease of room rates. A ‘Make or Break’ scenario. Room Design | Some Examples of What Could Go Wrong Same Room Types and Categories with Different Configurations The layout,