While the pace of hospitality projects continues to tick up amid an ongoing hotel recovery, design and purchasing executives acknowledged there are still plenty of challenges to contend with, particularly when it comes to logistics and pricing.
The executives weighed in during a panel discussion entitled “Second Half Spike? Purchasing & Design Execs Gear Up For Potential Increase In Projects,” which took place last week at BITAC Purchasing and Design East in Key Biscayne, FL.
In discussing the pace of projects, the executives unilaterally said they hadn’t experienced much of a drop-off—even during the pandemic and downturn—and were starting to see things pick up incrementally.
Karen Fisher, VP, project procurement, Jaguar Hospitality—which was recently acquired by management giant Aimbridge Hospitality—cited some reasons for optimism.
“We’ve been pretty steady all along. We’re starting to see a few more projects come back up that were put on hold earlier and we’ve seen a couple of new construction projects that are starting to come into play again. We’re feeling pretty good about things right now,” she noted.
Emille Aboona, co-founder and managing director, procurement, Q&A Hospitality Services, has also observed a shift in recent months.
“We’re very fortunate that we’ve had some projects that stayed the course last year. Now it’s great, things that were on hold are back and we can’t hire people fast enough. It’s a good problem to have,” he said.
Ann Chipouras, President, Purchasing Dimensions, LLC, emphasized the importance of working in a variety of segments—including three- to five-star hotels, boutique hotels, casinos, senior living and timeshare—as she noted “we’ve been able to hold our own” during the past year.
“We have been fortunate to have a very diverse group of clients over the years that we work with,” she said, later adding, “we’re hoping that more projects are coming.”
Todd Voelker, President, Voelker Gray Design/T.S. Voelker Architects, also stressed that the company has remained active. “In terms of workload we haven’t seen a slowdown. In fact, we didn’t have a single day off during the entire pandemic, which is a good thing. Our workers did work remote, which was a challenge in itself, but overall it’s been pretty steady,” he said.
Voelker pointed out that food & beverage has been a particular focus since the pandemic.
“The emphasis right now for us is mostly food & beverage; we’re doing quite a bit of restaurant work…There’s a lot of emphasis these days on the indoor/outdoor connection between spaces,” he said.
Paula Azevedo, vp, design, Duncan Miller Design, noted her company’s experience has been similar as she looked ahead enthusiastically.
“We’ve been fortunate, we had couple of really good projects sustain us over the last 14 months. The f&b component of what we do has really maintained the bigger part of the focus, even though there were a couple of hotel projects that we were still involved with. We’ve got things gearing up,” she noted.
Nevertheless, some of the challenges associated with logistics and price increases— particularly when it comes to product from overseas—were top of mind for the panelists.
“Lead times are horrendous, but freight cost is just through the roof right now. From May to now I think the freight cost has increased by over 50 percent. Now we’re scrambling to find other options, south of the border, north of the border, domestic. We’re exploring all options to meet deadlines,” said Aboona.
Chipouras specifically cited “container availability” as she pointed out “everything is just horrendous…They’re saying container shortages [will continue] and price of freight is not going to go down any time soon,” she said.
Chipouras added, “We’re doing the same thing trying to really source here as much as we can and talk to manufacturers and find out are they going to ramp up their capabilities to fit the need?…It would be great to see.”
However, there may be some drawbacks to getting product closer to home, according to Fisher.
“I have an owner that wants to be all domestic, but you kind of have to work the design around the domestic [product] too. You can’t quite get the same look here as what you can get overseas, it’s a fine line with what you can get here,” she said.
Meanwhile, raw material prices have continued to soar as well negatively impacting budgets, but many are taking a longer term approach.
“Lumber prices peaked about 6 months ago and they’ve come back down [by roughly a third]. We’re not back to where we were, but it’s headed in the right direction. It’s supply and demand. I’m fairly confident and optimistic that things are going to level out and we’ll find a good new norm that everybody can live with,” said Voelker.
Fisher, meanwhile, maintained logistics are the key issue when it comes to pricing.
“I think you can still get competitive pricing from the market. You have to bid it, but it’s still going to be the logistics part of it that’s going to be the ‘budget buster,’” she said.
Availability of product or supply chain remains a critical concern as well, according to Azevedo, who referenced a recent project where the order for product was placed in November and some still hasn’t arrived in the U.S.
“That doesn’t even compute in the normal world. Those are the challenges that we will continue to face and find different solutions for. As a whole we all have to work together, because it’s going to affect the expectations moving forward on all this work that’s going to gear up and no doubt it’s going to gear up,” she said.