Consider these tips to control costs on your new hotel project.
If you are embarking on a ground-up hotel construction project, then it’s important to stay on top of all the complications and moving parts. One important aspect of managing such building projects is optimizing construction costs. Here are some of the money management tips that you should consider for your hotel building project.
Know the Hard Costs of Your Project
In construction, hard costs refer to the cost of building materials, equipment, and labor. Most of your budget will be taken up by hard costs, so it’s important that you have concrete estimations of these costs before attempting to allocate the rest of your building budget.
Manage Soft Costs
Soft costs refer to expenses that are not immediately related to the building process but are still critical to project development and operations. Soft costs include the following:
- Construction permit fees
- Legal fees
- Survey costs
- Engineering fees
- Architectural design costs
- Construction project insurance premiums
- Local and state taxes
Because many soft costs have to do with the administrative side of construction, failing to pay these expenses can lead to costly delays, fines, and other penalties. To ensure that you do not run into these issues, you must remain on top of these costs.
Consider Operational Costs
Operational costs are those related to running the hotel once construction is complete, and the property is open for business. Operational costs include the following:
- Utilities (water, electricity, and gas)
- Guest room supplies
- Employee wages and training costs
While operational costs are not directly related to construction, it’s important to consider these costs before building begins. This is because you may want to lower your operational costs by requesting energy-efficient systems or certain building materials during the actual construction phase. Knowing your end goal will dictate what happens during the building process, so make sure you are thinking ahead.
These are some of the suggestions that you should consider when it comes to managing your hotel construction costs. Do you need help with your hotel construction project? If so, then contact Nikki Fox at Parkwest General Contractors at Nikki@ParkwestGC.com. Our dedicated team is eager to assist you with all your building upgrade needs today.