Rethinking the Race
Rethinking the Race, the Festival of Hospitality’s first panel debate for 2025, brought together a cross-section of seasoned industry leaders to discuss how - when the pressure’s high to rally towards hotel project completion - shared responsibilities, risks and rewards are essential for delivering results that are on schedule, within budget and fit for purpose. In a frank and spirited discussion with input from across the development spectrum, our experts offered advice and challenged each other and the audience in equal measure.
Moderator Stuart Adolph, Principal and Founder of Spirited Projects and former head of Sydell Group’s London office, guided the exploration of crucial issues affecting each professional’s field of expertise. Speakers comprised: David Beale, Senior Director, Cumming Group; Mark Bruce, Director of Hotels, EPR Architects; Dan Herron, CEO, BECK London; Francis Ho, Partner, Charles Russell Speechlys; Thomasina Tobin, Director, Turner & Townsend; and Steve Walford, VP Capex, Cedar Capital.
The panellists shared their forthright suggestions for improving each stage of the project development lifecycle, from initial site assessment to acquisition, legal contracts, architecture, interiors, procurement, risk management, construction and operational handover.
Feasibility and Acquisition
When determining if assets are viable hotel projects, developers not only need to consider site locations, preferred operators and the kinds of guests to be attracted, they also need to assess what interventions are required to bring these buildings to life. Although every job’s specific circumstances are different, there are similar potential challenges that require due diligence and feasibility studies. Building condition surveys can be revealing. Is asbestos and hazardous waste removal required? What’s lurking behind walls if this can be checked out, and what does an inspection of the cladding divulge? From a legal perspective, title searches to understand issues around building easements, rights of access, rights to light and restrictive covenants might end up influencing the ways properties are developed—and even the likelihood of getting planning permission after buildings are acquired.
Proper due diligence at the front end saves money and time in the long run, plus it lets job sites spring into action as soon as financing is in place. Historic buildings may have been previously considered for renovation, so developers might find ways to access others’ educated guesswork and sketched-out plans. The best solution though is to assemble a team of experienced technical consultants who, as early in the process as possible, can assess the building’s MEP (mechanical, electrical and plumbing) and structural engineering conditions, options for usage, potential rebranding and ESG (environmental, social and governance) factors that affect the project’s feasibility. It’s vital that consultants are given clear briefs for the advice they’re asked to provide and are paid relevant to their depth of knowledge. These reports help developers decide how much contingency and risk they’re willing to bear, as well as what level of design quality they can afford. It’s about balancing risk and reward to avoid refurbishments becoming costly ‘money pits’ due to unforeseen complications.
Macroeconomic factors also come into play since projects can last several years. When possible, developers should anticipate regulatory delays and price volatility. One solution is to have early procurement strategies for specified materials such as timber and stone, purchasing these in advance to lock in fixed pricing and mitigate inflation risks. Supply chain problems and labour shortages also affect projects’ critical paths.
“When considering what opportunities there are for an asset - to improve, rebrand, add floors or convert meeting spaces to guest rooms - everything we do at this stage underpins our clients’ ability to underwrite an investment.”
David Beale, Cumming Group
Takeaway:
Technical due diligence and feasibility studies provide developers with valuable insights into whether properties are worthwhile acquisitions. Surveys from MEP, structural and environmental consultants help them make more informed decisions about the degrees of intervention and investment required so they have more accurate business plans and can better anticipate future macroeconomic factors. It’s important that developers set out defined scopes for these assessments and pay fees corresponding to levels of expertise, as its unfair for consultants to be held accountable for cursory impressions provided as favours to industry colleagues.
Concept Design and Evolution
Involving MEP consultants from the very beginning of a project is vital, since those costs can take up a significant portion of the budget—sometimes over a third—before any real design work begins. Getting the MEP strategy in place early helps establish cost and energy-efficiency baselines that enable more realistic allowances for the rest of the project.
Commissioning expertise from architects, engineers and project managers early in the process helps developers spot untapped revenue potential. From an architectural perspective, one of the most exciting parts of concept design is ‘optioneering’. When clients seek guidance about real estate opportunities, the design approach depends on the brief. If it’s a set plan—for example, a five-star hotel in a heritage property—the direction is clear. But in many cases, the project is still in flux. Should it be a three-star or four-star hotel? How many rooms? How can designers advocate for the best front-of-house to back-of-house ratio? Maximising room count is always a priority in hotel design but it’s also about making sure revenue-generating spaces are optimised.
Strategic planning also extends to construction and spatial use. While increasing the size of basements in existing buildings can generate revenue for hotels, digging down can be expensive, so careful cost-benefit analysis is essential. This also applies to rooftops and deciding whether a bar, a penthouse or something else altogether would be the best fit.
It’s important to establish a clear initial design direction with the client yet also anticipate forthcoming changes once the preferred operator comes on board with brand standards and Property Improvement Plans (PIPs). The consultant’s role can also be to negotiate non-essential PIP suggestions on behalf of the client to ensure the project remains financially and structurally feasible.
“The enemy of every job is change, but on a scheme taking three or four years, fashions change, ownership personalities want input, and operators bring in General Managers and other team members. Our job is to find the balance.”
Steve Walford, Cedar Capital
Takeaway:
A team of experienced hotel developers and designers optimising the ratio between revenue-generating front-of-house spaces and revenue-supporting back-of-house spaces can help developers achieve greater return on investment while accounting for MEP requirements and balancing design aspirations with profitability. Engaging with an operator as early as possible ensures their requirements are met, especially in a highly competitive market where multiple operators assess different assets and ultimately compete for business from developers and designers.
Design Information Quality
As a project moves from concept stage through to RIBA Work Stages 3 and 4, details must be synchronised and precise, with Building Information Modelling playing a key role in ensuring coordinated design and implementation timelines. Consultants who aren’t as closely involved in day-to-day progress must be kept in the loop.
Allowing more time for detailed planning in Work Stage 3 helps avoid risk and costly delays while ensuring better long-term outcomes. When clients understand how allowing enough time for proper design coordination benefits them in the long run, they can make informed scheduling decisions. In hospitality projects where each building is unique, the brief must be fixed by Work Stage 3 and critical decisions must have been made to avoid a rushed transition into procurement that causes issues down the line.
Tender requests are often relationship-driven by industry professionals who understand each other’s expertise. When experienced teams handle a project from start to finish, the result is a strong pricing document by Work Stage 4. However, with the rise of design and build (D&B) contracts, the need for robust Employer’s Requirements (ER) details is greater than ever. Everyone must be on the same page from the beginning.
Contractors bring valuable insights into logistics, buildability and cost-saving alternatives, so involving them early through a pre-contract services agreement (PCSA), and then giving them the design coordinator role, helps streamline the construction process. Time and money are saved because creative ideas are translated more quickly and realistically into elements that can actually be built.
“I’m going to get this printed on a t-shirt: ‘We need to fall back in love with Stage 3’.”
Mark Bruce, EPR Architects
“When we look at every drawing for our Stage 4 pricing documents, information gaps can be a red flag. What's really important is having clear conversations and a strong design team so everyone knows exactly what they're doing and when information is going to arrive.”
Thomasina Tobin, Turner & Townsend
Takeaway:
Ultimately, success lies in balancing time, cost, and quality. By informing clients about the value of coordinating services earlier in the project lifecycle, consultants can help them save significant time and money down the road, reduce their vulnerability to risks and achieve smoother, more efficient project delivery.
Procurement/Contract Structure
Determining the most appropriate approach for procurement varies according to the type of project and the building’s complexity. For new-builds with strict brand standards, the D&B route may be more relevant, while traditional procurement methods are better for refurbishment projects including listed and highly specialised buildings. Contractors may be unwilling to take on certain risks, so it’s important to find a balance between risk transfer and collaboration.
New Engineering Contracts (NEC) are underutilised in the hospitality construction industry but they can offer a more balanced approach between client and contractor compared to Joint Contracts Tribunal (JCT) agreements because they include risk registers as standard and have pain/gain share mechanisms as an option that can be selected. Best practices from NEC structures include early risk identification and structured problem-solving meetings. The hospitality industry could learn from the public sector’s use of NEC contracts that employ target-cost contracting where clients assume more pricing risks in exchange for lower overall costs. Key elements of a well-structured contract include clear deliverables, early warning mechanisms and a focus on trust-building through structured collaboration.
“Many suppliers now invest much more in research and development on things like energy and sustainability, and that's where we need to invest time and money as well. Our understanding of that will then inform procurement decisions going forward.”
David Beale, Cumming Group
Takeaway:
Contract structures should be designed to foster collaboration rather than adversarial relationships. As suppliers continue to research and develop sustainable innovations, engaging with them in a project’s early stages helps with the implementation of circular energy management systems.
Risk Management
Risk is best transferred to the organisation best placed to deal with that risk, rather than simply transferring it down the supply chain to contractors and subcontractors who then must incorporate it into their pricing even though it may never happen. This often leads to increased costs and inefficiencies.
Trust is a critical component of risk management. Organisational tools such as design responsibility matrices (DRMs) and RACI (Responsible, Accountable, Consulted and Informed) charts, which set out what each consultant needs to do in relation to each service, can help teams anticipate potential issues, create contingency strategies and clarify who is responsible for each task so that all contractors can effectively manage their risk exposure.
Clients and funders prioritise cost certainty, but for projects lasting three or four years, anticipating the potential impacts of inflation poses a challenging risk. Robust early specifications are required to enable forward funding, yet securing investment often depends on finalised construction contracts and procurement strategies.
“Funders are often reluctant to commit money to something that's speculative and want cost certainty in terms of pricing debt. You can't really achieve that until later in the process but there are ways around it. You can get bridging loans. You can take on a little debt from your regular bank to fund some early work if needed, although the [interest] rate might be higher.”
Francis Ho, Charles Russell Speechlys
Takeaway:
Phased funding may be an option for developers to invest in early-stage risk analysis, while clearly defined DRMs can help project teams anticipate and manage potential challenges through the project life-cycle. Openness to shared risks and rewards, alongside contracts supporting this, encourages cooperative problem-solving and more realistically priced tenders with less padding for contingencies.
Construction Process
Communication and cooperation between contractors, designers, the client and the operator must begin as soon as possible in the construction process. Unclear responsibilities often lead to longer timelines, blame games and pushed-back openings. Site problems should be shared responsibilities and resolved as a collective team to prevent delays caused by indecision and the reluctance to spend money. While risks can’t be entirely eliminated, early collaboration through tools like PCSAs can clarify roles. Without solid planning, no one involved in the project will come out looking good.
“One of the most important things is trust. If you can collaborate and be open together, then you can take things forward, you can get a solution. That's why you talk to experienced people right from the start.”
Dan Herron, BECK London
Takeaway:
Better cooperation and meticulous planning are vital for minimising delays, managing risks and successfully delivering a project. Clarifying responsibilities through PCSAs provides structure to help resolve issues and keep projects on track.
Operational Impact/Handover
Handover typically begins about 12 months before completion as the General Manager and other hotel employees become involved. Health and safety concerns are vital once the operations workforce enters a live construction site.
Communication about timelines between construction management and operation teams is highly important, particularly since F&B (food and beverage) recruitment decisions must be made months before the planned opening. By prioritising areas crucial for staff training such as the kitchen and restaurant, structured handovers of sectional completions can minimise disruption.
The handover process depends on the deal structure; for example, lease agreements often dictate access arrangements, which means the hotel opening date can't change even if construction is running behind schedule. Keeping on top of deadlines for regulatory compliance is crucial, since licensing, building control and planning-condition signoffs must be completed before opening.
Industry conversations need to shift from risk to profitability to help ensure all parties—contractors, designers and investors—remain financially stable. Payment risk is a significant issue affecting the entire supply chain, from investors to onsite workers.
“The worst thing that can happen on a construction project is a contractor getting into difficulty because the risk they’ve taken on ends up costing much more money than they ever could absorb. There's a culture that if you're in financial distress, you don't talk about it so it doesn't get out in the industry. But if you actually have honest conversations, it hopefully benefits everyone to re-divvy up those risks to make it work in a fairer way.”
Thomasina Tobin, Turner & Townsend
Takeaway:
Synchronising construction schedules with timeframes for operational handovers is crucial for planning staff recruitment and meeting regulatory signoff deadlines. Shifting conversations to shared profitability by sharing risk can give the industry greater financial stability.
Conclusion
The panel’s consensus was that the earlier project consultants can be brought on board, the better, as upfront investment in cross-discipline expertise saves time and money in the long-run and leads to a far better result.
The industry needs to move towards contracts that have defined responsibility matrices and are based on shared risks and shared rewards to encourage greater transparency, increased efficiency in problem-solving, and more equitable, sustainable and profitable business models.
“The construction industry isn’t as far behind as we may think. Technology is moving it forward but we can’t forget we’re an industry that relies on people. You can plug in an AI model but to get something built, we still depend on the people and the resources in the field.”
Stuart Adolph, Spirited Projects
To summarise the takeaways: reasoned judgement, trust and experience can significantly de-risk a project - but they can also lead to complacency. As one of the last questioners charged: how do we maintain high levels of skill and experience on projects while listening to, and making space for, new ideas and new voices?
View the highlights video from the Devil’s Advocate: Rethinking the Race event.