Hotel & Motel Management - December 10, 2007 - (Page 30)

30 Construction CONSTRUCTION COSTS H&MM December 10, 2007 | HotelMotel.com www.HotelMotel.com/digital_edition Spending up, costs steady in construction IN THE details Construction stays stable The construction market has faced its share of hardships with rising costs over the past few years, but costs seem to be in check, as long as companies practice efﬁciency. Construction spending up Materials increasing slower Labor available By Emily Hanna ASSOCIATE EDITOR IN THE works Turtle Creek Casino & Hotel in Williamsburg, Mich., is scheduled to open in 2008. The 347,000-squarefoot complex, owned by the Grand Traverse Band of Ottawa and Chippewa Indians, will feature 137 guestrooms and 12 suites, a 54,000-square-foot gaming ﬂoor, a ﬁtness center, two restaurants, six bars and a night club. WATERFORD GROUP LLC A s the lodging sector rebounds from the construction slowdown of the early 2000s, construction spending has boomed in 2007. As of August 2007, construction spending in lodging was up 64 percent from 2006, while material costs seem to be increasing at a slower rate and labor remains available in most areas, making for a relatively strong year, according to the Associated General Contractors of America’s October Construction Inﬂation Alert. Construction costs still might be on the rise in some markets, but overall, they are not experiencing a rise as dramatic as the one that inundated the industry from 2004 to 2006, industry experts said. “Some materials continue to go up, such as petroleumbased products,” said Glenn Ahlborg, president and c.o.o. of The Waterford Hotel Group built a Homewood Suites by Hilton in Ithaca, N.Y., last year. The $13-million, 91-suite hotel opened in May. Robert Winchester, president and c.o.o. of Waterford Hotel Group, said new-builds are a feasible option this year. “When you’re deciding, ‘do I buy something or do I build something,’ when you’re able to build something and it’s at or near what you can buy it at, you probably want to build it because new is good,” he said. Procaccianti Group. This is noted by the fact that as of August 2007, the producer price index since December 2003 of crude petroleum (domestic production) was up 137.9 percent, and the PPI for plastic resins and materials was up 38.1 percent, according to data from the Bureau of Labor Statistics. Other materials, such as steel, copper and brass mill shapes, saw large increases, according to AGC’s inﬂation alert. John Stone, president of J.P. Stone Construction, said he experienced a 15percent increase on his steel bill in 2007. Yet Ahlborg said he’s found prices of some materials, such as gypsum, wood and ce- ment, actually have been slightly on the downswing. Another positive of recent months is the availability of labor. “In most regions of the country right now, labor is readily available and there are ample skilled craftspeople to get the job done,” Ahlborg said. However, in some renovationheavy areas like New York and the Northeast, or in areas with strong union membership, it might become more difﬁcult to get workers, he said. And to get these workers for cheap: “Union labor prices are through the roof and very unexplained,” Stone said. As winter weather arrives, it also brings in additional construction costs for new-build properties. Robert Winchester, president and c.o.o. of Waterford Hotel Group, said certain conditions might affect when you start a project, so as to reduce the temporary heat needed for the building or tenting of speciﬁc areas. Making sure the timing is right is just one aspect of keeping costs down. Efﬁciency in project management is key, including well-thought-out plans, fewer change orders and better specs for the bidding process, Winchester said. Stone emphasized the importance of efﬁciency “along the whole board of construction, from computers to labor.” ehanna@questex.com John Q. Hammons Hotels & Resorts announced that the Embassy Suites—Norman Hotel & Convention Center is under development. Just two miles from the University of Oklahoma, the 10-story, 283-suite hotel, owned by John Q. Hammons, is slated to open in fall 2008. Developers 1111 Tower LLC broke ground on Four Seasons Hotel and Private Residences Denver. The complex will feature 240 luxury guestrooms and 102 private residences, ranging from 1,000 to 6,100 square feet. Additionally, the hotel will feature 16,000 square feet of meeting space. Vision Hospitality Group started construction on a 100-suite hotel in Kennesaw, Ga. The $12-million hotel will be a Homewood Suites by Hilton. The hotel is expected to open in September 2008. InterContinental The Clement Monterey (Calif.) currently is under construction. The 208room property is owned by Cannery Row Hotel Development Venture LP, under a license agreement with a company in the InterContinental Hotels Group. The hotel, to be managed by Paciﬁc Hotel Management LLC, is slated to open in the second quarter of 2008. Compiled by Stacey Higgins, shiggins@questex.com The Seneca Buffalo Creek Casino The Seneca Nation plans to open a $333-million, 9-acre destination resort in downtown Buffalo, N.Y., in 2010. The Seneca Buffalo Creek Casino, designed by SOSH Architects of New York, will include a 22-story hotel, a 90,000-square-foot casino, four restaurants, retail stores, a spa and an indoor/outdoor garden with a stream. The glass hotel tower will feature 208 suites and maximize views of Lake Erie. The 21st story will be a concierge ﬂoor with a living room atmosphere, an elegant spa and areas for entertainment. At the top of the hotel’s exterior will be a giant video screen to display live interior images of the complex. SOSH ARCHITECTS http://www.hotelmotel.com http://www.hotelmotel.com/digital_edition

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - December 10, 2007

Table of Contents News Wildfires test hotels' emergency plans LIIC roundtable: Capital available for hotel projects Departments Perspective Letters to the Editor At Your Risk Family Business Matters Sales Clinic On Finance Satisfaction Trends HotelWorld Update Events Trends & Stats Special Report H&MM's "year in review" tackles the top seven in 2007 Transactions Consumer Insight Travelers rank free breakfast high on must-have items Hot Products IH/M&RS Editors' Choice Award winners Construction Spending up, costs steady in construction Design Window treatments Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - December 10, 2007

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