Fortune cookie logic for dealing with challenging hotel projects - by Gus Sarff

January 19, 2018 - Front Section
Gus Sarff
GS Associates Inc.

“Adversity is the state in which (persons) most easily becomes acquainted with (themselves), being especially free of admirers then.” - John Wooden

Anyone involved in construction of hotels has stories of challenging projects. The more years in this business the easier to spot the symptoms of projects on the wrong path and do what can be done to avoid pitfalls. The ability to understand what we can control and what we cannot, employ early intervention to realign project agendas is an interconnected relationship involving many other parties. Without syncopation between owner and the project team it becomes very difficult to avoid problems, even if one can see them coming far in advance.

One such ill-fated project had three different owners, three general contractors, five interior designers, two operators, an architect, a project management firm (but two different project managers), and us, the procurement company. Where possible, owners should mend their issues with the design team and only replace when necessary, as history is invaluable. Consistency and continuity is a luxury; extra vigilance is required in their absence.

A typical time of involvement of a procurement consultant for a new build hotel is two to three years. The first “meeting” with the owner in June of 2000 never happened as after two hours of waiting it was apparent that ownership was simply failing to appear. Be wary of clients who don’t take their own projects seriously. The next meeting opened with espousing our approach to FF&E consulting, but devolved to a prematurely granular discussion about the owner insisting on buying bathroom fixtures from Turkey to save money. We left the meeting with a feeling that this project was in the danger zone before we were out of the blocks. Trust your instincts.

We performed pre-project services of budgeting, programming and miscellaneous procurement services until 9/11/2001 when the project was suspended. The project management company, advocating for the client, “asked” for us not to accept any payment or expenses for the work we had performed. We were contacted two years later when the project was bid to seven procurement companies. We were ultimately awarded full FF&E and OS&E scope. It’s difficult to turn down a five-star property that’s also in your backyard, but if it’s determined worth the risk to accept a project that has warning signs, go in with eyes open. In business, just as in the rest of life, do not count on people suddenly changing a pattern they’ve already established. 

After the first model room, one year from the targeted opening date, the fourth interior designer was fired. The fifth designer was engaged four months later, a new schedule and milestones for specification delivery were established to meet the projected opening date. None of the milestones were kept and the specifications were submitted piecemeal. As orders were placed, revisions to the specifications arrived months later with no revision dates or any organization to the specification and drawing documents (the labeled furniture layout plans were on their sixteenth revision). Act early with the project team and owner to meet quality milestones for documentation and deliverables.

This was all before the owner and operator addressed OS&E specifications (operating supplies and equipment). An approved final list of OS&E was submitted to our team and we processed and priced. Subsequently the ownership directed us to disregard the list and delete and await a new revised list. What followed was a period of piecemeal specification submissions and continued “emergency” purchases directed by anyone on the pre-opening staff. We had several meetings to establish control procedures for ordering and budget control. Five months from the revised opening date we were informed that the operator had been fired and we were directed to not only hold on to he OS&E, but to begin the process of canceling and returning any delivered materials. The opening was revised, a new operator was engaged with the notification that there would be changes to the already purchased FF&E and an entire new OS&E specification list. Chaos begets chaos.

The project had been going on for the better part of a decade. The project teams who remained were fatigued. Communications from the new owners often decayed into blame and hind-sight evaluations, despite the obvious explanations of continual changes, stops, firings and restarts. When things go wrong there is a tendency to focus on a past that cannot be changed, taking time and energy away from what can be done in the present to mitigate issues. Don’t let what you cannot do interfere with what you can do.

The 2008 financial meltdown occurred before the hotel opened and our project participation was a low priority. Eventually it opened in the winter of 2009. We stayed on with the project with the promise by the new ownership to be dealt with fairly. In the end that didn’t happen. With projects like these, there are concerns for employee motivation and industry reputation. No one wants a “bad” project or the association of their services with an unsuccessful project. One shouldn’t overly concern themselves with appreciation or reputation and instead focus on doing the right thing for the owner and the project. 

Tough projects can offer a few  good things. One tends to learn more on projects that are challenging than on the smooth projects. The key is always to learn and reassess, to always get better at what you do. They also make you appreciate the other projects and project teams. It’s the journey.

Gus Sarff, is president and owner of GS Associates, Inc., a procurement consulting firm providing FF&E and OS&E services locally, nationally and globally for luxury, convention, resort, limited service hotels, fractional ownership properties, restaurants, and function facilities.

For over 25 years, GS Associates, Inc. has continued to develop procurement technology and creative sourcing to maintain its leadership in the industry. GSA’s services are transparent, expert, and will make a positive impact on any project.

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