The hospitality construction industry is experiencing a boom. However, developers and project owners face several challenges that can inflate costs and require the expertise of contractors skilled in cost-saving methods. Disruptions in the supply chain and rising material costs continue to impact the commercial construction sector. Evolving trends in hospitality construction and additional building regulations in cities add another layer of complexity.
At Crain Construction, a Nashville-based commercial contractor with decades of experience in hotel and hospitality projects, we help developers optimize budgets with proven, cost-effective construction strategies. We’ve collaborated with numerous developers on successful hospitality projects, including repeat business with many valued partners. Each project presents new opportunities, and we’re dedicated to helping our clients maximize value while navigating changing circumstances. In this article, we share the top cost-saving methods we use to build high-quality hotels while controlling costs.
1. Early Contractor Involvement (ECI) to Maximize Cost Savings
Involving a contractor early in the design process fosters a collaborative environment where constructability, cost estimation, and value engineering opportunities can be explored. This collaborative approach during preconstruction leads to cost-effective solutions that seamlessly integrate with design and performance goals.
Project Example: The Aerston Midtown Nashville project, an 800,000-square-foot mixed-use project, exemplifies the benefits of ECI. From the project’s inception, we continuously implemented creative solutions to minimize construction inconvenience for neighbors and ensure project progress. Early involvement also allowed us to anticipate potential challenges and develop strategies to mitigate them, ultimately saving time and resources.
2. Value Engineering to Cut Hotel Construction Costs Without Sacrificing Quality
Value engineering involves identifying cost-saving opportunities without compromising quality or functionality. This strategy focuses on evaluating material selections and construction methods to deliver the desired design at a lower cost. In addition to traditional value engineering methods, it is also important to consider long-term cost savings and revenue opportunities.
Project Example: Value engineering played a significant role in the success of the Hilton Hotel in Franklin. Following a collaborative design review, our team identified areas where simplifying certain details in the hotel tower could increase efficiency and lower costs. This value engineering process resulted in a cost savings of $300,000 for the owner.
3. Apply Lean Construction Principles to Hospitality Projects for Greater Efficiency
Lean construction principles promote optimized workflows, waste elimination, and enhanced productivity. Techniques like just-in-time delivery, collaborative scheduling, and continuous improvement practices can drive efficiency and reduce project costs.
Project Example: Our recent BNA Hilton project exemplifies the power of lean construction. The hotel’s location at Nashville International Airport presented numerous challenges, including navigating airport traffic and limited laydown and material storage space. However, our team leveraged lean construction principles to turn these challenges into cost-saving opportunities.
4. Leverage Prefabrication to Accelerate Hotel Construction Timelines
Prefabricated components offer a solution for reducing construction time and labor costs while maintaining quality standards. Prefabricated elements like MEP or interior wall systems can be constructed off-site under controlled conditions, minimizing on-site labor and potential delays.
Project Example: The Element Hotel, a design/build MEP project, utilized prefabrication in several innovative ways. The hotel features five floors of prefabricated stick framing on a concrete podium supported by caissons. Anticipating potential price increases, we purchased wood early, saving the client significant funds. Additionally, prefabricated walls shaved a month off the installation schedule.
5. Standardized Design Prototypes for Scalable Cost Reductions
Developing standardized design prototypes for hotel brands or chains can streamline construction and minimize design fees. Repeatable designs can be scaled across procurement, construction, and operations.
Project Example: Our Hilton Alpharetta project perfectly demonstrates the value of standardized design prototypes. The hotel is based on a prototype developed for a similar Hilton project in Franklin, Tennessee. By employing 50% of the same subcontractors for both projects, construction ran smoothly and efficiently, saving time and money despite being built during the early stages of the COVID-19 pandemic.
Hospitality Construction: Smart Strategies for Long-Term Success
Building a hotel—whether it’s a luxurious five-star establishment or a trendy boutique experience—requires a thoughtful approach to design, construction, and budget. Implementing these cost-saving strategies allows Crain to optimize our project budgets without sacrificing quality or aesthetics.
If you’re a hotel developer looking for a commercial contractor that understands the demands of hospitality construction, contact Crain Construction today to start building smarter. Crain Construction is passionate about collaborating with developers to turn their vision into a reality—a reality that delivers exceptional design and lasting value.
