Hotel & Motel Management - December 27, 2007 - (Page 30) » JEF F HIGLE Y, EDI TORI A L DIRECTOR Builders still face high-cost situations onstruction companies that build hotels have been in a quandary for the last couple of years—they like seeing all the business being generated by the aggressive growth plans hotel brands are taking, but cringe at the thought of another increase in the price of raw materials. That playing field is tilting in favor of construction companies in 2008 because the price of materials has stabilized. Meanwhile, the hotel construction pipeline around the world is at record levels with no signs of a slowdown. In the United States, there were 5,011 hotel projects comprising 654,503 guestrooms in the pipeline at the end of the third quarter, according to Lodging Econometrics, a New Hampshire-based company that tracks C construction trends in the lodging industry. That marks the fifth consecutive quarter of record-breaking pipeline activity. In addition, that number is 31 percent more than the peak pipeline in 1999— the recognized crest of the last economic upturn. That means there is plenty of work to go around for all construction companies, but have the spiraling costs in material that were created in the wake of Hurricane Katrina in 2005 leveled? Steve Bachman, senior v.p. for Hardin Construction in Atlanta, said to Hotel & Motel Management in July that the company found that concrete prices had risen 47 percent over the past two and a half years. Copper costs were up 30 percent, reinforc- ing materials prices jumped 93 percent, insulation costs were up by 50 percent and roofing materials rose 71 percent. Copper was at such a premium that extra security needed to be considered to protect the material from being stolen from construction sites. Labor costs for construction companies and subcontractors have been eased by the downturn in residential construction, but remain one of the biggest issues for hotel projects. “Everyone has the same challenge. It [boils down to] how do you forecast what you need, when you need it,” Robert Janni, v.p. and East Coast division manager for Westwood Contractors, told H&MM in July. jhigley@questex.com Shakman Hospitality is committed to providing seamless solutions for your hotel renovations so that you and your guests always sleep well. Shakman Hospitality, LLC Contact- Rocky Goldman or Mark Isabelle, Shakman Hospitality 2595 NW Boca Raton Blvd., Suite 100, Boca Raton, Florida 33431 Tel: (561)750-8288 Fax: (561)750-8511 www.sccfl.com From room renovations to public space and restaurants, Shakman’s expertise touches all facets of a hotel renovation. www.hotelbusiness.com/readerservice http://www.sccfl.com http://www.sccfl.com http://www.sccfl.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.