Hotel Building Q&A: Part 1 — Skilled Labor and Value Engineering

What is your general role in the development of a hotel?

NK: As a hotel construction builder, my role is to manage the construction of the site from start to finish — all the way from removing topsoil to receiving the final occupancy permits. I’m involved with hiring people with the right kind of experience for the site excavation, concrete foundation, structural work, interior and exterior finishes, and general site work. I also help coordinate the installation of furniture (which we refer to as FF&E: furniture, fixtures, and equipment), and hotel opening. There are a lot of moving pieces, and I always have to think at least 3 months ahead of everyone else to do each job effectively.

One of our readers asks: Is the availability of skilled labor challenging?

NK: In construction, it always seems like when there is a lot of labor available there are no projects, and when there is no labor available there is a surplus of projects.

What are some of the characteristics that you look for in hiring?

NK: The two big things are experience and commitment. Our team sits with every prospective person we hire and examines their previous projects. You have to make sure they have the capacity to handle the project you want to hire them for, of course. How many workers do their teams have available?

What is reasonably priced? How do you determine what is reasonable?

NK: “Reasonably priced” is always a moving target. The cost of buying “x” 10 years ago is different than how much the cost is today. I wish there was a written published method, but the reality is determining what is reasonable has a lot to do with 1) experience, experience, experience, and 2) hard work, hard work, hard work. There is no magic answer. You can look at the past projects you have done as a data point. Of course, every site is different so you have to be able to think on your feet and adapt quickly.

What is value engineering?

NK: Value engineering is a method and process of thinking about how to make the construction as cost-effective as possible without sacrificing quality. Our team has to consider the cost of materials, labor, but also construction schedule.

Is that because of climate, supply, etc?

NK: Supply and demand. Masonry charges around $3–4 dollars a block in previous projects I’ve done in Texas. In the upper midwest Chicagoland area, I’ve seen that price go up to $70 per block.



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John Lim

John Lim

Business Associate with, a hotel crowdfunding platform. Blogs about hotels, real estate investing, and the hospitality industry!