Building a hotel from scratch or reconstructing an old building

10 July 2020

5 minutes

Opening a hotel is not only a way to expand your investment portfolio with a prestigious business, but also a real opportunity to influence the region in which this hotel is located. However, every entrepreneur, before starting the construction of a private hotel, is faced with a choice of two options: to build a hotel from scratch or to make a reconstruction of an existing building. So how to build a hotel correctly? In this article, we will look at the facts and practical examples in this topic.

BUILDING FROM SCRATCH

Advantages of building a hotel from scratch:

Quality. Designing and building a hotel from scratch significantly increases the reliability of its design and internal systems.
The absence of other people's mistakes. During the construction of the hotel, you will not need to face the correction of other people's mistakes that were made during the construction stage, as during the reconstruction.
Design costs are lower. This approach provides less cost for the preliminary development of the concept, since it is created from scratch, and does not involve changing the existing structure.
Compliance with standards. When building a new building, it is more realistic to create it correctly, in accordance with all applicable building codes and regulations, than when reconstructing it

Cons of building from scratch:

More time to design. The development of the concept can last longer as the building must go through the entire process of designing and validating from scratch.
The creation period is longer. The total construction period of the hotel may be longer than during the reconstruction of the object.
Longer payback periods. For objects built from scratch, the payback period is on average 11-15 years.
Compliance with the local regulations. A hotel must comply with local zoning and construction regulations.

More detailed information on: https://ribashotelsgroup.ua/en/hotel-engineering/

A practical example from the experience of Ribas Hotels Group

According to Artur Lupashko, CEO of Ribas Hotels Group, the reconstruction of an already built facility may incur unplanned costs, as unforeseen circumstances may arise during the repair process. “So, we reconstructed one of our city mini-hotels on the basis of an existing building, which was previously used for warehouses and dry cleaning. We had to cut down the surface layer of the walls, as they were very thick and took up space. We also expanded the staircases, added bathrooms, and other things” he shared.

The construction of a new hotel and the reconstruction of an existing building for a hotel undoubtedly have their pros and cons. Regardless of which option you choose, it is important to remember the main economic rule that the market dictates – the amount of effort invested in exploring and discovering the possibility of expanding your hotel portfolio determines how successful you are.

Starting a hotel is a responsible process that requires knowledge of the hotel business. For the successful organization of construction and the development of the architectural concept and business plan of the project, you should contact professionals.