The Hospitality Industry is Eyeing Modular Construction with ROI in Mind

Marriott made big news last year when the company announced it was adopting modular construction to drive growth in North America. Despite the popularity of modular construction in Europe, where labor costs are higher and alternative construction methods are highly sought after to reduce costs, hospitality brands in North America have been slow to turn to prefab construction.

But Marriott saw what a lot of other brands are battling: skilled labor shortages driving traditional construction costs up, and unreliable or longer construction schedules thanks to external factors like weather delays. Rather than accept the rising costs and slower returns, the brand sought an alternative solution.

Modular construction is great for hospitality projects. Here’s why:

Fast-track your project and speed up your ROI

Modular construction can speed up build time by up to six months for an average 4-5 story, 100 key hotel. This is because the guestroom units can be produced off-site at the same time the foundation work and site prep is taking place.

Schedule delays and expensive labor costs undercut your return on investment. Modular construction can shorten the construction schedule, sometimes dramatically (by several months). Shorter construction times mean quicker occupancy, and quicker occupancy means you see a return faster.

Don’t skimp on quality

Modular construction hasn’t shaken the stigma of “lesser quality,” but the idea that hotels built using modular construction are of a lesser quality than traditional construction is ridiculous, and far from the truth. In fact, because of the factory like environments and precision of production for prefab materials, your modular project may actually be a higher quality. You don’t have to skimp on finishes or materials either – modular construction offers the same selection of materials as traditional construction. Oh, and with modular construction, there’s an extra layer between rooms (space between modules, and walls for each module) so your hotel will be quieter – something we can all appreciate.

Slash your budget

Accelerated schedules are just one way to keep your budget in check. Factory labor is consistent, and not susceptible to the same cost spikes that skilled labor trades are for traditional construction methods. The prefabrication process is also precise and controlled, so there’s much less material waste. That means the costs of skilled labor and excess materials aren’t passed on to you with modular construction methods.

Thinking about expanding your hospitality portfolio? Kuvella can help keep your costs down and make sure you get your ROI faster.