Value engineering is the systematic process of attempting to reduce costs without compromising on quality. It is about looking at the selection of materials, equipment and processes to see if a more cost-effective solution exists that will achieve the same project objectives.
Hotel owners and operators look to this process when renovating or building so that they are able to get the most value out of their investment.
Unfortunately, value engineering in the construction industry is too often associated with quality compromise. Some owners skimp in their selection of architects, designers, engineers and general contractors, reducing their costs but throwing quality and the entire construction schedule into question.
Being able to value engineer properly comes from experience. It is essential to work with architects and general contractors who have done this all before. Experienced contractors know how to orchestrate a hospitality project that is very different from standard construction due to the nature of a phased or rolling schedule. A hospitality-specific general contractor will know how to coordinate the construction processes to create a smoothly functioning project and ensure that the schedule is not delayed, that additional revenue is not lost, and that units can be sold sooner. The overall result will be quality work, faster trade turnaround times, and ultimately, a faster construction schedule.
Here are a few value engineering tips:
Build a ‘mock-up room’ before starting the renovations. Doing this will enable your team to fine-tune their processes and value-engineer before the full-scale renovations begin.
Simple changes can make a big difference – like the showerhead. For owners who are extremely cash-strapped, you can buy a rain showerhead, massage showerhead and other models that will give your bathroom a modern spa look and feel as well as improve your guests’ shower experience. This can be done in under 10 minutes and coupled with other small improvements, could make a big impact.
Choose premade case goods and be flexible with sizing; by suggesting an 84-inch hospitality unit instead of a 96-inch hospitality unit, the cost could be reduced by as much as 25 per cent due to the savings in materials.
When selecting fabrics for upholstered items, such as sofas, chairs or pillows, try to use fabrics that do not have a “repeat” design, such as patterns or stripes. This will require additional yardage and result in higher costs.
Local or national?
Another important tip, which also happens to be a common misconception, is about hiring a local general contractor as opposed to a national one. Some people will tell you that a local contractor would be the best option since they are located near the project and would probably be the least expensive. Clearly, their proximity to the project means that local crews could go home every night and that they would not have to stay at the site — meaning that there would be no housing costs. However, in most instances, roving crews work longer hours to finish the project so they can eventually get home. Doing some quick calculations on the cost of lodging, travelling crews versus the number of days they can cut from the schedule (and the revenue potential for that time) can periodically be valuable. You’ll likely see that the lodging cost is a wash or better.
Remember that national hospitality-specific crews are accustomed to the operational needs and requirements of hotel operations. As well, a national contractor may have access to a wider variety of suppliers and manufacturers.
One cannot overemphasize the importance of working with experienced crews – local or national. By following these value engineering tips, you will help make the overall process run smoothly and be able to fully maximize your renovation budget.
Amir Anders is president of Jemlor Construction Inc., a general contracting firm specializing in the construction and renovation of commercial, industrial and hotel projects across Canada. You can reach him at firstname.lastname@example.org