the essentials in hotel openings - part i
TRANSCRIPT
THE ESSENTIALS in HOTEL OPENINGS
İstanbul-Turkey 2014
Ahmet F. Seymen
This work reflects my experience during the opening of hotels in
Turkey.
My findings only represent the situation and conditions pertaining to the hotels I have opened.
It does not reflect other projects and should not be generalized for the Turkish hotel industry.
Turkish investor profile
Pro’s & Con’s of Investor Companies
Pro’s
High enthusiasm
Young, dynamic & flexible
Lean & not top heavy structure
Quick in decision making & less red rate
Turkish investor profile
Con’s
Business origins from different industries;
(Construction, Textile, Automotive. Most are not hoteliers)
Majority are family owned & operated companies;
(Lack of corporate structure, professional staffing and application of sound business practices)
Not custom to work with professional firms and consultants, which deliver research, feasibility studies, investment reports and concept designs
Pro’s & Con’s of Investor Companies
Turkish investor profile Con’s…
Limited utilizing of funds and incentives offered by government and institutions
Limited Access & knowledge in understanding & applying criteria and specifications of international hotel chains
Hesitation in hiring/working with reputable and professional firms in the industry
(Architects, Interior Designers, Construction Firms, Law & Legal Offices, Financial Institutions, Consultants)....
Turkish investor profile Con’s…
Lack of comprehending the project as a whole
(Net Rate of Return, analysis of business trends and major cost contributors)
Limited knowledge in understanding the disciplines involved in planning and implementation stages of hotel opening
Less willing in hiring of operational staff in the very early stages of the opening
Research Needed for the Project
Socio economical growth Present & future demographical growth
analysis Growth patterns for Industrial, Agricultural,
Commercial and Technological sectors Import & export growth and trends Present and planned industrial investments
for next 10 years
ECONOMICALCountry wide
Location Proximity to Airport Proximity to major roads and arteries City center, Commercial zone, Industrial
zone Proximity to Exhibition & Congress area,
Hospitals, Universities, Metro/Train Stations, Stadiums, Schools, Dorms, Bus Stations, Museums and Recreational facilities etc.
EconomicalGreater Metropolitan Area
Hotels & Lodgings in different categories(Ministry – Municipality Licensed)
Concept, Facility & Products offered Total rooms & bed capacity Yearly occupancies and ADR Construction of on-going Hotel projects Planed Hotel projects 5-10 years
ECONOMICALTourism Infrastructure
Number of tourist arrivals Corporate clients Other business clients e.g..
(Convention, Fair, MICE etc..)
Health & Medical tourists Local clients Other potential clients
ECONOMICALTourism Infrastructure
Market & Competitor AnalysisA. Analysis of the Greater Metropolitan (GM) Area Tourism infrastructure and transportation e.g.. Roads, Highways, Trains, Metro, Fairies etc.. Yearly Income obtained from Tourism & Travel Expansion rate of the GM area for the past 10 years
10 year growth projection for GM areas
B. Location Unaccommodated demand
Latent demandC. Competitor Analysis
Analysis of Primary & Secondary competitors
ECONOMICAL
Analysis of Government Policy & Procedures
Ministry of Tourism
- Hotel Spec’s & Classification - Fire Safety & Building Regulations - Green Hotels & Environmental Regulations
- Building Codes & Regulations
- Handicap Requirements
Type Specification Hotels
Budget / Economy
Room size 12-18m2 net. Personnel per Room 0.1-0.2/roomLimited F&B facility
Etap, İbis, Holliday-Inn Express, Easy Hotels
Midscale Room size 20-24m2 net. Personnel per Room 0.4-0.5/roomLimited F&B facility. Additional facilities (meeting room, fitness.
Mercury, Holliday Inn, Courtyard by Marriott,Hilton Hampton Inn
5 Star &Upscale
Room size 25-30m2 net.& up Personnel per Room 0.6-0.8/roomMultiple F&B facilities. Various facilities with alternative concept and capacities. Ball room, Meeting rooms, Executive Floor, Business Centre & Lounge, Spa & Fitness Center…..
Radisson, Sofitel, Hilton, Intercontinental, Marriott
Type Room Cost*
Budget/Economy 40.000 - 60.000 Euro
Midscale 60.000 - 100.000 Euro
5 Star & Upscale 150.000 - 200.000 Euro & up
FINANCIAL
FINANCIAL
Related Costs Budget Mid Scale 5 star & upscale
Euro % Euro % Euro %
Site & Area Improvements
3.000 5 5.000 5 10.000 5
Construction 27.000 45 45.000 45 90.000 45
Soft Costs 3.000 5 5.000 5 10.000 5
Technical Equipment 15.000 25 25.000 25 50.000 25
Fixture Furniture & Equipment
7.200 12 12.000 12 24.000 12
Operating Supplies & Equipment
3.000 5 5.000 5 10.000 5
Pre-Opening & Working Capital
1.800 3 3.000 3 6.000 3
Total 60.000 100 100.000 100 200.000 100
Critical factors which contribute to enhance the performance and has positive impact on the project
1.Location2.Concept3.Service & product standardization4.Being up to date (physically and technologically)
ECONOMICAL
Guest Preference Eeconomic Mid Scale 5 Star & Up
Central location Close to venue Easy access
Welcoming Problem free check-in/out
Personel service
Clean Room
Clean & efficient bathroom
Breakfast Minimal or selective against charge
Standart buffet breakfast
Selective & extended buffet
breakfastTechnically up to date
Facilities Minimum requirement
4 star requirement 5 star red. & additional
Educated & friendly staff
Product & service standards
Ecological & environment friendly
OPERATIONAL
Analyzing & understanding the specification of multi-national hotel chains
1. Design specifications' (area usage & utilization, guest areas, staff areas, elevators, corridors, storage facilities, offices', kitchens, receiving areas etc...)2. Guest room & bathroom specs3. General Area criteria’s (Restaurants, Bars, Meeting rooms, SPA etc…)4. Electrical & Mechanical specifications5. Fire & safety regulations6. Environment friendly & Green Hotel Specs…
TECHNICAL
Preparation & application of
«PROJCET MANAGEMENT» plan Structured work plan & meetings
between; Owning company, Architect Office, Technical Support Office, Management Company, Contractors & subcontractors as well as suppliers.
Daily field trips to asses the implementation of scheduled works in conjunction with «PROJCET MANAGEMENT» plan
TECHNICAL
Construction Phase & Sequence
a. Site & Land improvements
b. Shell & core construction
c. Mechanical Works (ducts, ventilation, heating, water, plumbing, drainage, shafts & piping…)
d. Electrical Works (High voltage, Bonding, LV, etc.…)
e. Walls & separators (brick, ytong-bims-dry walls etc…)
f.Marble or other wall/surface coverings
g. Ceilings
h. Doors
i. Wall paper
j. Paint job
k. Carpeting, wood floors
l. Fixed & mobile furniture - Décor
m. Lighting (interior-exterior)
n. Exterior & facade jobs - Landscaping
TECHNICAL
TECHNICALSequence Days
-Month
% Days-
Month
% Days-
Month
%
Site & Land improvements, Shell & core construction
122-4
39,0 180-6
39,0 213-7
30,0
Finishing Works 213-7
60,0 300-
10
60,0 424-
14
60,0
Defects & re-touches 30-1
1,0 60-2
1,0 93-3
10,0
Total Days / Months 365-
12
100,0 540-
18
100,0 730-
24
100,0
Initiation of Company (Corporation, LTD, Holding) Building & other legal permits form local
government authorities Electric, Gas & water supply permits Permits from Ministry (investment & operational) Franchising, Management or Leasing agreements
from National /International
LEGAL
5 critical issues which prolong hotel openings Municipality & Government Office permits % 40
Obtaining of necessary funds % 30
Environmental & community related issues %12
Timing of construction & work schedule % 10
Contractor & subcontractor issues % 8
LEGAL
Total of 33 years in the Hospitality Industry
1.st two years working as Receiving Manager and Assistant Purchasing Manager (OGDEN Food Service) Miami, USA
Following 8 years worked as Restaurant Manager & Director(Dobbs Houses & Restaurant Associates of America) Miami - New York, USA
Last 23 years worked as F&B Manager, AGM, GM, Director of Operations, Area GM, Division President. (Omni Hotels, Sofitel, Hilton, Ramada, Corinthia, Dedeman, Byotel-Byomed, CVK Group of Companies
Total of 16 hotel openings
Hacettepe University, School of Business, BS
Florida Int. University, School of Hospitality, MS
AHMET F. SEYMEN