February 4, 2019

Modular construction seizing moment in the hospitality industry

As reported on BISNOW.com, board-by-board, nail-by-nail, stick-built construction has dominated how hotels have been built in the United States for more than 100 years, but that could become a thing of the past.

As the hotel industry enters the second decade of the 21st century, pre-fabricated or modular construction is picking up steam.

“There’s a movement not just in the hotel industry but across other disciplines that we’re starting to see a trend … you can build your projects faster, produce higher-quality rooms and lower cost in a factory-style development,” Marriott International Chief Development Officer Eric Jacobs told Bisnow at the Americas Lodging Investment Summit at the JW Marriott in downtown Los Angeles this week.

Like all of the other major asset classes, hotel construction is facing a severe skilled labor shortage, higher material costs and other limited resources. Some hotel ground-up developments are taking twice as long to open.

Modular construction is seen as the great equalizer that could increase the volume of units while driving down project costs.

“The time it takes to build a [stick-built construction] three- or four-story wood frame mid-rise hotel used to be about 12 months. Now, we’re at 20 months,” Jacobs said. “Our owners and investors are asking how we can get back to 12 months. One of the ideas is modular construction.”

“It is definitely the future,” R.D. Olson Construction President Bill Wilhelm said of modular construction. “Everyone is trying to get their arms around it. It is a trend that whether it’s tomorrow or the next couple of years, it is out there.”

But is the industry ready for modular construction?

Keep reading on BISNOW.com

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