New Hotel Projects – Role of the owner’s representative (GA 2018)

GA, 2018

 

The owner representative represents the owner/board of directors and drives the

project on behalf of the owner/board.

The DEVELOPMENT OF A PROJECT can be sub-divided into the following stages;

  1. Objective of the project
  2. Inception (registration-legalize-article of association-joint venture agreement)
  3. Feasibility Study (based on available GFA)
  4. Source of Funds; Equity, Loans and bank interests
  5. Responsibilities & Delegation of Authority
  6. Shareholders Structure and payment of capital; amount and timing
  7. City/Authorities Approvals
  8. Project Management, project schedule and risk management
  9. Area Programme-facilities, Concept Architect and Conceptual Design
  10.  Budget Development
  11.  Cash-Flow Projections and Controls
  12.  Operator appointment and Input
  13.  Selection-Engagement of Main Contractor and of Consultants
  14.  Schematic Design
  15.  Design Development
  16.  Tendering and Award
  17.  Construction, Interior Design, Equipment
  18.  Handover and Commissioning
  19.  Corrections-punch lists
  20.  Asset Register and Closing of Books

 

Now, it is important that for each of those 20 stages, you will have to develop the scope-process-controls, and also develop a book (hard copy and soft copy) containing all important information and contacts referred as the “PROJECT MASTER BOOK” one section for each of the 20 stages.

 

Develop the summary of project cost format

Develop the financial projections format

Identify and appoint the account manager to handle the project cost.

Develop the area programme format

 

The JOB DESCRIPTION OF THE OWNER’S REPRESENTATIVE has to address the following:

  • Attend all Shareholders-Board meetings
  • The position takes directions only from the Shareholders-Board
  • The position is accountable to the Shareholders-Board
  • Responsible to complete the project on time and on budget and at brand standards
  • Meets owner’s objective
  • Meets the approved project schedule-budget
  • Achieve good value for money
  • Achieve quality end-product
  • Compliance with ordinance/regulations
  • Coordinate with all consultants and give proper instructions
  • Coordinate all works related with TS and with the Operator and give instructions
  • Give directions as per owners-shareholders’ request
  • Ensure that there is a clear Organization Chart and clear role within the “site team”
  • Monitor the work progress and schedule compliance
  • Establish systems to prevent losses of goods
  • Approve expenses/signing of cheques based on the delegation of authority
  • Prepare a monthly progress report for the major shareholders
  • Manage the tender (consultant) process
  • Appointment of Professional Consultants
  • Maintain proper project’s records and documentations
  • Ensure work efficiency, good communication with all involved in the project
  • Ensure that all consultants are proper licensed and covered by insurance
  • Review and participate on the selection of M&E’s, FF&E’s and OS&E’s (product-brand and costs based on Efficiency & Reliability) before the order is placed and ensure proper delivery time, inventory and maintenance agreements as it applies
  • Ensure that the asset register is put in place before the closure of the Project’s books
  • With the operator, ensure that all Divisions operating systems are developed and implemented and the property is properly marketed and positioned
  • Site projects/trips

 

P = Propose, R = Review-Recommend, A = Approval.       Items to list;

  • Shareholders approvals (there may by 5-6 items like banking-funds-loans etc.)
  • Board of Directors approvals (there could be 9-10 items)
  • Appointment-dismissal of management staff
  • Compensation (parameters)
  • Purchase orders
  • Who will do the purchasing of goods and related costs and responsibilities
  • Cheque signatures (check-and-balance system) specify approval amounts
  • Payment time and process

 

CONSULTANTS, a simplified list;

  • Land Surveyor including soil test and site formation
  • Lead Architect
  • Project Architect (local)
  • Structural/Civic/Geotechnical Engineer
  • Project manager
  • Main Contractor
  • Nominated Sub-Contractors
  • Quantity Surveyor (cost of Engineering)
  • Building services (MEP) Consultant-Designer
  • Foundation work
  • Sewage Treatment Plant
  • Water treatment Plant
  • Plumbing & Drainage
  • Lift & Escalator (Supplier?)
  • Interior Designer
  • Interior Fitting out
  • Curtain Wall Consultant including Aluminum windows and Skylight (if any)
  • Traffic Consultant
  • Acoustic Consultant
  • Environment Consultant
  • Kitchen & Laundry Consultant (supplier?)
  • Lighting & Audio-Visual Consultant
  • Landscape Consultant (including irrigation system)
  • Graphic & Signage Consultant
  • Artwork Consultant
  • Security & Fire Consultant including CCTV and Carpark Control
  • Swimming Pool-Waterways design and Filtration System
  • Gas System (if any)
  • IT Backbone, Cabling and PABX System incl. in-room technology & software
  • Audio-Video Conferencing System
  • Pest control
  • Purchasing Agent for FF&E’s and OS&E’s
  • Tax-Legal Advisor
  • Uniform Designer
  • Restaurant ID-Designer
  • SPA Designer
  • Others…..

 

PROJECT DOCUMENTATION

  • Government and/or Municipality approved drawings and documents
  • List/address of consultants, manufacturers, suppliers, contractors, agents
  • All contracts contractual correspondence
  • Project Flow Chart
  • Purchase Orders
  • Minutes of Meetings
  • Project manager’s Instructions
  • Variation Orders
  • Technical Reports for specific issues
  • Inspection Reports
  • Weekly-Monthly report by the Project Manager and by third parties
  • Site Project manager Diary
  • Site Progress-Photographs, Video-Records
  • Material Samples, Mock-up, Models, ID-display boards
  • Approved Drawings, Programmes, Quotations
  • Payment Certificates, Invoices
  • Completion Certificates
  • Handover Certificates
  • Discharge Certificates
  • Personnel file of site staff including salary and expenses payment records
  • Selected Progress Photographs
  • Warranties and guaranties on plant, equipment and materials
  • Records from the Account manager-office
  • As Built Drawings from filing and retaining (very important)
  • Others….

 

TENDER PROCESS (Guidelines)

  • Number of tenders to be obtained
  • Criteria for selecting Tenders
  • Tender invitation
  • Tender Opening & Analysis
  • Late Tenders
  • Tender Negotiation, approval and award
  • Waiver of Tender procedures
  • Conflict of Interest

 

BRIEFING TO CONSULTANTS

Always remember that “Proper Briefing/reflecting the owner direction is extremely important for the success of the project”.

 

SIGNING OF CONTRACTS AND CUSTODY

To be developed

 

CONTRACT ADMINISTRATION AND AUTHORIZATIONS LIMITS

To be developed.

 

VARIATION ORDERS

To be developed.

 

OPERATING LICENCES

Define what is needed and who is doing what on obtaining all licenses on time and prevent delays. Need for licenses varies from Country to Country.

 

INSURANCES

Same as the licenses, define the type of insurances needed during the project development and insurances needed to operate the hotel.

 

PRE-OPENING BUDGET

Format is available and must be used. With the Shareholders and the operator you have to define the amount needed for the Pre-Opening activities. Also define the amortization of those expenses if it is done during the first year of operation or within 5 years. This will directly impact the performance during the first few years of operation.

 

WORKING CAPITAL

Sufficient funds to operate the hotel for the first 4-5 months. As guideline, do allocate USD 500,000 for each project and review it once the operator is in place.

 

GM ON BOARD

You must push all concerned to have the Hotel General Manager on Board 12 months before the Opening, this is very important for the project and for you. Unfortunately many owners fails on this at the expenses of the project.

OTHERS (also in conjunction with Project Manager and the Operator if available). Address the followings;

  • Schedule and critical path management.
  • Project office and Project team.
  • Pre-Opening office and training space for the operator.
  • Define the Capitalization policy.
  • Depreciation and amortization policy for M&E’s, FF&E’s and OS&E’s.
  • Handling-Accountability of OS&E’s, direct issue or storage?
  • Warranties for equipment installed.
  • Service agreements for large equipment installed.

 

OPERATIONS

  • Involve the various divisions of the operator as much as possible during the last 10-12 months prior to the opening.
  • Ensure that the operating Financial Budget is put in place and approved before the opening.
  • Ensure that all employees are properly trained before the hotel is opened.
  • Ensure that the employees facilities are in good order, this is very important.
  • Set soft opening date with the operator and Shareholders.
  • Ensure that all executives are hired on time and in compliance with standard benefits and have Pre-Opening offices available.
  • Develop the list of operator report to the owners and related approvals-delegation of authority.
  • Others.
  • Positioning of hotels in the market.
  • F&B concepts.