Except for hotel consultants, hotel operators or brand providers and the design team, specialised expertise is also available to support contract negotiations, the additional sourcing of investment and debt, hotel safety and security, as well as complementing the project team with specialist project management, MEP, cost and supply chain consulting. The commissioning of such consultants will depend on resources already within the organisation and the overall approach to the development.
Contract Lawyers
Except in the case of multiple branded hotel owners, there is undoubtedly a knowledge gap between an owner and an operator when it comes to management and franchise agreements, with a first-time owner that void is enormous. The operator’s lawyers compose the standard proposals and contracts, the operator’s development teams have a highly sophisticated understanding of the provisions and consequences of the terms of the agreement, and they are backed up by highly specialised in-house/external lawyers, dealmakers, tax and finance experts. Contracts are multifaceted and while presented as ‘fair’ with interests ‘aligned’, given the needs of the operator to protect all its stakeholders, even the best meaning HMA or HFA will contain positions an operator would ‘prefer’ and would not willingly want to concede.
An experienced hotel consultant can often give useful guidance on commercial terms, but their credentials and liability for legal advice will likely be limited. Therefore it is highly advised that before any commitment on the commercial & legal terms, i.e. preferably before a binding head of terms, an owner should retain an experienced hotel lawyer’s to help level the playing field. Given the complexity of agreements, particularly HMA’s, the contract uniqueness and transaction rarity of such service agreements especially in emerging markets, and the contrasts of international agreement and local application, the choice of experienced hotel contract lawyers is often severely limited in some regions and such expertise held by only a few lawyers. Add the advantages gained by engaging a lawyer with direct experience with the operator and options may be just one or two. So long as lawyers do not have a track record for derailing agreements, an operators development team will often welcome an owners engagement of an experienced lawyer. While the lawyer brings value to the owner at the expense of the operator, potentially rolling back the operators advantage, the lawyer should help expedite the process and reduce the later risks that may arise as a cause of misunderstanding.
- Scope of the contract lawyer
- Contract lawyer contacts
- See also: h
otel contracts
Investment Advisors
- Scope of the investment advisors
- Investment advisor contacts
Safety & Security Advisors
Hotels are a target for terrorists and criminals, are especially vulnerable to safety issues arising from fire or natural disasters, and are also exposed to potentially fatal hazards such as food poisoning and legionnaire’s disease. Safety and security are a function of hotel design in the same way that guest facilities or service systems are, and therefore require consideration from the outset of a project. Given the high profile of hotels, terrorist attacks are increasingly a concern, and while several widely publicised incidents have occurred recently in emerging markets, hotels in established markets are as much under threat. Hotel operators provide detailed guidelines for safety and security, have crisis management systems and are increasingly working together with dedicated protection and security organisations. Such advisors often have high-level connections with official national and international security structures or can provide independent assessment and certification to hotel properties. Advisors can provide guidance on a range of issues such as managing risk, security planning, threat levels, access control, evacuation planning, attack preparation & response (including hostile reconnaissance, search planning, weapons & firearms, suicide bombing, chemical, vehicle
Project Managers
A project manager aims to ensure the implementation of the project requirements on-time and on-budget, achieved by the application of risk management with appropriate tools, knowledge and skills. These risks are particularly pertinent to hotels where capital investment is intensive, and delays have significant cost implications. The project manager functions most effectively when directly representing the client for the day-to-day management of the project, issuing directives, facilitating communication (including with the client), controlling scope, and reviewing progress. Characteristically they do not contribute directly to project activities such as construction, design or procurement, and need to remain objective to the consulting team.
Due to resources and liability issues, hotel operators will not usually provide project managers. A developer’s in-house project manager with proficiency in hotels or similar developments is the most common approach, however, when such experience is not available, recruiting a qualified individual for the duration of the project, or commissioning a commercial project manager are options. Except for regions where hotel development is prolific, few international project management companies have a dedicated hospitality team but may bring in expert personnel for the project, or provide specialist support and tools to project managers proficient in related CRE.
- Scope of the project manager
- Project manager contacts
Cost Consultants / Quantity Surveyors
Accurately identifying project cost is a critical side of the feasibility equation for all commercial projects, not least hotels where benchmarking is limited, and there is the added complexity of multiple facilities and the requirement for entire fit-out that necessitates individual and detailed approach to all projects. Cost planning evolves through the life of the project, from the initial cost appraisal (feasibility, pre-design), cost plans (project brief, detailed design), pre- and post-tender estimates, through to contractor pricing. Cost consultants are typically quantity surveyors, and in emerging markets usually a function of global professional real estate services companies.
International cost consulting companies should have access to hotel construction benchmarking data, preferable also local hotel or other CRE data, and familiarity with the various sectors of hotel products. The cost consultant may be involved in assessing project options, defining the project budget, reviewing designs (concept, detailed, interior) against the project budget and quality standards, risk management and value engineering activities, the preparation of cost plans, estimates, cash flow projections, BOQ, tender documentation and final tender/contractor evaluations.
- Scope of the cost consultants
- Cost consultant contacts
MEP Consultants
The coordination and detailing of MEP systems during the design, installation and commissioning phase of a hotel is a complex and challenging task. Design is the responsibility of the contractor or specialist MEP consultants in coordination with the project team. MEP covers functions including HVAC, plumbing, sewerage/drainage, gas piping, lighting, lifts, power supply & distribution, low voltage services, fire and security systems, audio visual, IT and building management systems. While the hotel operator may give guidance and technical parameters, adaptation to the project and local compliance are also necessities, and early engagement of the consultant facilitates the appropriate integration of MEP services. In hotels, technical space can be constricted and congested, as optimum planning requires specific floor to floor height levels, particular horizontal and vertical distribution routes and due to the nature of the business has a high threshold for life safety and hygiene. The repercussions in terms of project delays, retrofit costs or need for irregular solutions due to miscalculations or oversights in the design of essential MEP services will be more and more significant as the project progresses.
Supply Chain Consultants
Efficient supply chain management is a critical component of delivering a hotel project, it is often a function carried in combination with the owner’s procurement team, the hotel management/operator, interior design and technical consultants, but alternatively, a supply chain consultant may undertake the role. Large hotel operators consider supply chain management a value proposition within the technical, preopening and operational phases and would not usually recommend a third-party supply chain consultant. Such specialists consultants would typically operate in markets with concentrated supply growth and a proliferation of independent hotels or regional chains such as Asia and the Middle East. The role during development focuses on FF&E and OS&E identification and procurement and consulting services cover project planning and budgeting, item/design specification and review, sourcing, tendering, supplier negotiation, critical scheduling, procurement and logistics coordination, customs clearance, warehousing, payment management, and installation management.