So you think you can build or renovate your hotel casino with your in-house construction and purchasing departments? Think again.
I have been building hotel and casino projects as an owner’s project manager and purchasing agent for over 40 years. As CEO of PMI for 20 years, we have provided over $2 billion dollars of FF&E procurement services to hotels, casinos and tribal casino properties. I have seen every type of project management and project type one can imagine for casino hotel renovations, additions and new construction.
I can tell you there is a right way to do it and a way to make your life miserable during construction or renovation of projects that need to be completed on time and on budget.
You can hire the best designers, best architects, best contractors, and best FF&E procurement agents in the world for your project, but if you do not manage them properly, you will end up with disappointment. When I say disappointment, I mean projects that are way over budget, way past schedule and an end product that is substandard because the contractors and FF&E vendors were not given enough time to build a quality product.
Every project large or small needs a dedicated development owner’s representative that has a successful casino/hotel track record. These folks are not contractors from the past or pedigreed from a university with a BS in construction management. The true owner’s representative is someone with years of experience working either for a large gaming/hotel company design and construction department or running hotel/casino projects directly for the owner.
The worst projects we have been involved with are those where the owner of the property has put an on-property person in charge. Typically, that would mean an in-house engineer, purchasing agent, construction manager or other executive. The same goes for corporate asset managers, financial executives and operations staff. The problem arises because typically those people, who may be excellent at their jobs, do not have development experience and/or are not 100 percent dedicated to the role of project manager.
The next worst project manager is one that has no experience in gaming, tribal projects or hotels. Each of these projects is very different than other types of development and construction. They are vastly more complex, and the downside of not opening or turning rooms back on time is exponentially larger than other types of assets. Without experience in this field, it is very hard for that project manager to see what needs to be done to have a successful project.
An experienced project manager will manage the expectations of the ownership, tribal council, operators and gaming executives as to the product that will be delivered, when it will be delivered and the cost of that product, before starting the project. They will also understand the needs of hotel management and casino management and integrate those needs into the design process.
Once the feasibility is complete, one of the main tasks of a good development project manager is to set the budgets for the design team and make sure they stick to designing to that budget. The next major task is to manage the delivery of documentation from the design team to the construction and purchasing teams in a timely manner.
At the same time, schedules for each phase of work need to be created and refined. Too many times we have seen projects where an inexperienced project manager or owner simply lets the professionals design without a budget or definitive direction. There is usually a big surprise when it gets costed out way over budget. If a redesign is required, you cannot make up the time in construction or purchasing.
The best project managers we work with are usually independent, and may even be a project management firm. They usually are small and only handle a couple of projects at a time. When working for a large casino/hotel development departments or large project management firms, many times there are too many politics and procedures that get in the way of efficiency at the project level. Casino hotel projects typically move too fast to have a bureaucracy managing the process.
In today’s hospitality market, the pace of new construction and renovation is fast and furious compared to our recent economic downturn. Many casino/hotel project managers left our business, so there are fewer project managers to choose from. Consequently we see asset managers, financial people and operations executives trying to fill the role of project manager. It simply does not work well, because most of them do not have the experience to manage these fast-paced, high-dollar projects.
So where do you find these project management experts? The best way to find them is to talk to your contractors, design firms and procurement professionals. They know who is experienced and who they can make money with by not having to do things twice. Call your competitors that just completed a project and ask how it went. When you interview the project managers, call their references. Ask them who was on their construction and design team, and call them too!
Finally, many owners feel that the cost of an owner’s representative or firm is too high. I would say the cost of not having a good owner’s representative is much more than the fees they charge. An owner should look at the fees like an insurance policy to make sure the project is on time and within budget.
