CREATORS believes that a professionally managed pre-opening process with extraordinary attention will almost always lead to a smooth opening and this helps to ensure a successful hotel operation for years to come. I read the other day “Root Causes of New Hotel Opening Delays” which is an excellent article which discusses perfectly the root cause analysis methodology which is utilized to determine the basic underlying reasons that cause hotel opening delay problems.

This really made me think about those, exactly the same, issues that we are facing with first-time owners on our current projects in the booming markets of Indonesia and Myanmar.

It is a touchy subject so little talked about in our industry like it is a pest and something that we should be quiet about as not to scare off the first-time hotel and resort owners, but yet at the same time sort of acknowledging that this serious problem really exists! Really education to the owners is a must and must be at all times managed by operators, project managers and property managers alike. In the end, we all suffer because of these lengthy and costly delays.

Why We Have Hotel Opening Delays

Is it really surprising to see that after the owners sign their hotel and franchise management agreements, that there is often very little education and support from operators, apart from the architectural and engineering teams during the design and construction phases to the owners of the proper processes of their property development? Most often they just recommend them to get a project consultant or manager to sort these problems out. How wrong this is, is it not in everyone’s interest to get the hotel or resort open and operational as quickly as possible?

CREATORS absolutely are not saying that all operators are alike, there are some very good ones there, but then again why is it that we are not resolving those root causes in hotel opening delays as a team. There are of course experienced owners as well but more often than not they also face the same issues as not, or not want, to understand the root causes of hotel opening delays. Add to this the substantial losses of income, a 200-key luxury resort at $200/night @ 50% occupancy can lose up to US$600-750,000 per month, big numbers indeed, not to mention the other inherent issues, such as an impact on financial resources, impact on brand etc.

In my 30+ years of managing projects and working with many owners, it seems that we still have not learned these lessons well! Of course, owners are often at fault as well, but is that because of lack of understanding in new hotel opening processes, or are we just assuming that they all should know the development process?

Root Causes of Hotel Opening Delays

Here are some of the intermediate root causes which are unfortunately are pretty standard these days and not much talked about:-

1. Operators not being able to manage efficiently the fast and large growing markets in the Asia Pacific, which shows the rate of slow openings

2. Issues of proper development planning by experienced hotel project consultants and managers

3. Underutilization of proper project management execution and procedures and lack of project execution plan and programming

4. Poor pre-feasibility and budget planning

5. Owners not clearly understanding the hotel or resort development process

6. Slow submission of licensing and permitting requirements

7. Inadequate pre-qualification and selection processes for suitable designers and consultants

8. Not adhering to hotel branding standards and procedures

9. Unrealistic Opening Dates

10. Poor tendering, lack of value engineering  and proper procurement processes

11. Poor and slow quantity surveying processing, including valuation of contractors, progress claims, adding to hidden delays and cost overruns

There is of course much more, so what is the way forward and solution.  We first need to start with operators to re-think the way they do business in these fast-growing markets and understand better the utilization of project management methods and systems. Secondly, we need to the same with the owners, get them to clearly understand the importance of proper management by internationally experienced consultants.

So What Are We To Do Next?

In summary, hotel and resort properties are complex real-estate developments that need to be carefully planned and managed from the start to be successful for all the parties involved, including operators and owners. There is still a long way to go for all parties to understand these issues and to proceed to complete hotels and resorts in a timely and well-planned manner.

The first question, do you agree with the causes of hotel opening delays, and what do you think we should do about it? Why not share your thoughts and discuss it with me or in the comments below!

To your success! Bert Bykes @Contact

MORE INSIGHTS…