Top 4 Hotel Renovation Challenges in 2022:
1. Shortage of Skilled Construction Workers
In a recent article in Housing Wire, author G. Kromrei points out that many industries are bouncing back from 2020, offering tempting wages and career changes that look enticing to skilled workers as well as minimum wage employees. The lure is working and construction workers have switched professions at a surprising rate. Even as early as the last pop of the last housing bubble, some construction workers lost their jobs and turned to new careers before quarantine even hit. Many experts see a re-balancing happening in the not-too-distant future, but until then, there are ways to plan around this and other challenges.
2. Shortage of Lumber
The large demand for housing combined with recent wildfires and worker shortages due to the pandemic are the biggest reasons behind the current lumber shortage. The price of wood has skyrocketed as project backlogs grow. According to Forbes, the cash price per thousand board feet of lumber was at an incredible 288% increase year-over-year. The good news is that production of lumber products is up as well as companies rush to fill the need. For your project, it may be that your renovation can be completed with soft goods and the repurposing of under-used areas instead of expansion and tear-down.
3. Supply Chain Issues
Shortages of specific items have come and gone over time, but the pandemic has disrupted the global supply chains due to, once again, shortage of workers, materials, and time. As purchasing picks up, some businesses have reported turnaround so rapid that it’s been nearly impossible for them to stay on schedule. According to the U.S. Census Bureau, manufacturing and construction are the two highest industries suffering from supply chain disruptions. However, just as with the lumber shortage, the race is on to entice new truck drivers and get cargo shipping of all types running at full speed again. However, there’s no need to wait for that, a skilful re-arranging of priorities can also solve shipping issues.
Abrupt price increases are the apex of the challenges that surround hotel renovation. The rising need for workers comes with the rising need to compensate these workers. If you’ve been lamenting that projects seem to be more expensive by the day as timelines stretch, you’re certainly not alone. Securing financing is a great way to go, but is also feeling the crush. However, this phenomenon is also discouraging the casual investor. Hotel owners who want to expand or those serious few new to the game now have an rare opportunity.