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Massive Construction Pipeline Sends Labor Costs Soaring For Hotel Development


Construction labor shortages and a huge development pipeline are sending labor costs in the hotel sector soaring.

Hotel developers said skilled workers are demanding more money as the post-recession building boom continues, and some owners are being forced to pay wages up to 30% higher, Hotel News Now reports. Experts said hiring the right talent to lead the project from its onset can help alleviate growing cost burdens, saying engineers who cost less up front could ultimately make a development much more expensive by over-engineering.

Computer design technology and changing brand standards have also been identified as cost-saving measures. For example, Horwath HTL managing director Paul Breslin said Millennials are less concerned with large rooms, which gives brands that target them the opportunity to save when it comes to room size. He also said hotel developers should make sure they are not building unnecessary storage space and should determine ways to make common space revenue-producing.