HOTEL COST ESTIMATING GUIDE

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TABLE OF CONTENTSHOTEL COST ESTIMATING GUIDE 2016Introduction by Jay Schultz . 6Guide to the Cost Guide .8About the Cost Guide .10Cost Estimating Summary Sheets .12Cost Estimating Tables by Hotel Tier .15Economy .15Extended Stay .21Midscale .33Upscale .45Upper Upscale .61Luxury .77Design Trends .93CapEx: All The Stats You Need .94The Panama Canal Expansion .95Designing to a Schedule .96Freight and Warehouse Pricing .98Glossary of Terms .101Contact Information .1175JN A and HVS DESIGN HOTEL COST ESTIMATING GUIDE 20165

INTRODUCTIONby Jay SchultzSVP of ICD Hospitality GroupForecasters predict another successful year for thehotel industry in 2016.With the current lodging cycle seemingly hitting ornearing its peak in recent years, forecasts for 2016hotel performance stress more of the same as whatwas seen last year, with many chain segmentsexperiencing record numbers. Many believe aninevitable, cyclical decline is on the horizon but, at themoment, the industry is poised for another positiveyear.“.the industry is poisedfor another positiveyear.”As was seen in multiple market segments in 2015,record-high occupancy levels are granting hoteliersthe ability to continue to aggressively raise ADR,thereby fueling much of the industry’s overall growth inRevPAR. That trend will continue this year, until slowlyencroaching new supply eventually starts to softensome of the current demand in key markets.“I think as we continue moving into 2016, we canexpect another year like the one we had in 2015. Ifyou look at where we are in the cycle now, comparedto where we were in the last one, in the last cyclewe experienced RevPAR growth in the industry forfive consecutive years,” said Bobby Bowers, SVP ofoperations at STR, Inc. “Moving into 2017, we as acompany expect another year of growth. After that,it’s kind of hard to say. But, from where I sit, we canexpect at least another two years of growth.”The crucial factor to keeping the good times rollinghas been the slow return of new construction since thedownturn. Although some chain scales and geographicmarkets are experiencing dramatically higher levelsthan elsewhere, new supply industrywide remains wellbelow national long-term averages.“The demand growth, by any measure you want to6JN A and HVS DESIGN HOTEL COST ESTIMATING GUIDE 2016take, has been extraordinary,” said Mark Woodworth,president of PKF Hospitality Research, a CBRECompany. “But, yet, that demand growth has notresulted in the level of new construction that we’danticipated given previous cycles, such that now we’reoperating at levels that we’ve never seen before.This continued, comparatively slow increase in newconstruction activity, is what’s going to enable us tostay at this high level for an atypically long period oftime. There haven’t been that many surprises abouthow the industry has performed.”PKF is expecting a modest increase in 2016 industrywide occupancy of 0.6% to 66.0%. ADR, meanwhileis predicted to grow 5.5% in 2016 to 126.93, fueling6.1% RevPAR growth to 83.81. STR’s growth forecastis fairly similar, predicting year-end 2016 upscaleoccupancy growth at 0.8%, ADR growth of 4.8% anda RevPAR increase of 5.7%. Nearly all segments areexpected to post positive growth in occupancy, ADRand RevPAR, save for upscale, which may see a slightdip in occupancy due to the burgeoning active pipelinefor the segment.According to Jamie Lane, senior economist at PKFHospitality Research/CBRE, “We think we’re going tostay at record occupancy levels, except for upscale.That is the only segment where we show a declinein occupancy in 2016, principally due to the supplyincrease there. That segment saw the most supply in2015, an increase of 4%, and it’s going to see the mostsupply, increasing up to 5.4%, in 2016.”For now, much of that new supply is hyper-localizedin key urban markets like New York City; Austin, TX;Houston, TX; Nashville, TN; and Miami, FL, and to asmaller degree in secondary markets where businessis particularly good. The general consensus, however,is that lending and underwriting has been far moreprudent in this current cycle, thus the new supply isemerging in a relatively more justifiable manner thanprior to the recession.“What we’ve seen in the underwriting this time aroundis really healthy, so we think asset prices make sense,”said Zane Varvel, VP at Warmbrodt Hotel Investors. “Ithink with the new supply, the question becomes: Is thedemand going to keep up with the new supply? I think6

INTRODUCTIONby Jay SchultzSVP of ICD Hospitality Groupthe supply has been kept in check enough in the pastthat it is all coming online at this point, but we havea healthy economy and travel is becoming more of aleisure activity; so, relative to other areas of real estate,I still see that hotels are a less risky asset class.”There are, of course, outside factors that may have animpact on the industry in 2016. Hoteliers are growingincreasingly concerned about the strengthening U.S.dollar, which has the double-impact of deterring inboundforeign travel and stimulating outbound internationaltravel. Similar to the supply situation, this crimp ininternational demand is playing itself out differentlydepending on the market and chain segment.The decline in the oil markets is another outside factorcoming to bear, greatly affecting locations like Houstonwhich rely so heavily on demand from this source. But,even as some cities are adversely affected, the netresult of lower gas prices has increased travel, whichappears to have offset much of the overall decline.“The low oil environment has clearly hurt some markets,starting with Houston, and places in the central U.S.that are energy-producing corridors of the country. Ithas definitely hurt their business,” said Woodworth.“But, that low oil has put more dollars in consumers’pockets, so more people have traveled and stayed inhotels; therefore, demand for hotel rooms has benefitedfrom that, and that’s helped the overall numbers.7About the AuthorAs Senior Vice President of the ICDHospitality Group, Schultz is responsiblefor the overall guidance and growth of theprint and digital editions of Hotel Businessand Hotel Business DESIGN along withadditional products including the HotelBusiness Executive Roundtable Seriesand Green Book, Annual Almanac &Market Guide. A 24-year hospitality-publishing veteran he hasheld senior management posts in editorial, sales, operationsand administration. He has served in an executive capacity withExecutive Business Media, Westbury, NY and Nielsen BusinessMedia, New York, NY. Schultz has been a moderator and speakerat the Americas Lodging Investment Summit (ALIS), LodgingConference, JMBMs Meet the Money, the Hunter Conference, theNYU International Hospitality Industry Investment Conference,HD Expo, HD Boutique, HD Summit as well as many corporatemeetings and events.Schultz holds a bachelor’s degree in Communication from theState University of New York at Albany. He serves as an advisorto the Mayor of Patchogue, NY on tourism and travel relatedissues, and is the founding chairman of Lions Club InternationalDiabetes Wellness Center at Brookhaven Memorial MedicalCenter, East Patchogue, NY.JN A and HVS DESIGN HOTEL COST ESTIMATING GUIDE 20167

GUIDE TO THE COST GUIDEby Warren G. FeldmanCEO of JN A Principal of HVS DesignThe 2016 Hotel Cost Estimating Guide is the eighth edition of this comprehensive planning tool. JN A and HVSDesign developed the Guide to examine construction and FF&E costs for renovations in each hotel tier. TheGuide is intended to be just that - a guide to help provide approximate costs for your softgoods or full renovationwith flexibility to customize your preliminary budget to fit your scope. As with any generic budgeting tool, the finalcosts for a specific project should be developed on a case specific basis. Below are some tips to aid in directingyou to get the most out of this helpful tool.OverallThe Guide is divided into six hotel tiers. Each tier has an assumed hotel size and configuration from which thecost data is derived. The assumptions are a way for you to compare against your property to help determinewhich tier and hotel size it fits.Once you have selected a hotel tier, you should determine if you want a quick budget number or want to developa more detailed version of the budget. For quick numbers use the summary pages (Pages 12 and 13). If youwant a detailed budget, then use the detailed numbers within the tier you have selected.The next step is to apply the scope of your renovation to the forecasted numbers, having determined which tieryour hotel falls under and determined your scope of work for the renovation. Let’s assume you have a six-story,200-room hotel that needs a softgoods guestroom renovation, but you are planning to keep the artwork, lighting,and soft seating. Due to the type of hotel, you know that your project falls under the Upper Upscale tier.Softgoods RenovationFor a quick preliminary budget using the summary page only, you would use the guestroom softgoods renovationprice for an Upper Upscale hotel in the cost range of between 7,271 and 9,498. Now, skip ahead to theadjustments section.For a more detailed budget you would to the Guestroom Softgoods Renovation for the Upper Upscale (page 62)category, you should highlight each item that you are replacing including demo and FF&E installation. Each itemhas a cost range (low to high) and an average cost. Utilizing the average cost number will provide you with thegeneral idea of the cost. Add up the select items needed for your renovation and multiply by the number of keys.This number will provide you with an approximate idea of how much it will cost to do a basic softgoods renovationincluding construction and FF&E.Guestroom Softgoods RenovationAssume guestroom area of approximately 15' x 24', plus 8' x 8' bathroom and 7' x 8' entry / closet area 472 SF. Ceilings 9'-0" AFF, painted drywall.DemolitionFF&E InstallationArtwork, Mirrors and Accessories (Installed Package)Full-height Framed Dressing MirrorBed Skirt or Box Spring CoverDecorative PillowCarpet and PadDesk LampFloor LampEnd Table LampNightstand or Bracket Lamp (2)Welcome Light (in Existing Location)Desk Chair (incl Fabric)Lounge Chair (incl Fabric)Ottoman (incl Fabric)Sleeper Sofa (incl. Fabric; assumes K rooms only)Paint Textured or Drywall CeilingPaint Trim (Base and Crown)Paint Entry Doors, Closet Doors, Frames, and GrillesVinyl Wallcovering (LY 54")Window Treatments (Sheer, Blackout, Hardware Installed)Guestroom Softgoods Renovation Cost Per Key8 220.25 328.60 417.53 177.53 150.00 90.00 825.00 130.00 270.00 250.00 315.00 180.00 270.00 450.00 220.00 420.00 297.34 212.10 238.50 1,238.93 570.00 otototoJN A and HVS DESIGN HOTEL COST ESTIMATING GUIDE 2016 382.13 397.50 536.72 251.25 180.00 120.00 980.00 160.00 330.00 310.00 375.00 230.00 330.00 550.00 270.00 510.00 408.35 367.64 381.60 1,727.47 700.00AVERAGE 312.78 362.08 475.51 213.97 165.00 105.00 906.47 146.67 300.00 280.00 345.00 201.43 300.00 500.00 246.67 465.00 379.01 281.99 301.82 1,481.18 633.33 9,497.66 8,402.928

GUIDE TO THE COST GUIDEby Warren G. FeldmanCEO of JN A Principal of HVS DesignAdditional Renovation / Full RenovationThe Cost Guide provides an additional level of renovation c

For a quick preliminary budget using the summary page only, you would use the guestroom softgoods renovation price for an Upper Upscale hotel in the cost range of between 7,271 and 9,498. Now .File Size: 2MBPage Count: 117