Featuring Mike Pozdol, Design & Construction Consulting, SSP Industry Expert
When a first-time hospitality developer hits a budget wall mid-design, ownership needs more than another round of value engineering. They need an experienced hotel operator who can pressure-test the numbers, catch what an in-house team cannot see, and give ownership the confidence to move forward.
SSP Industry Experts bring decades of hands-on experience across all key hospitality disciplines. On this engagement, that meant a design and construction specialist stepping in to deliver an owner´s-side perspective during a critical budget phase. Here’s what that looked like when the SSP Consultant and his team were engaged on the project.
The Challenge
A well-established commercial real estate company, five decades in business and built almost entirely around office properties, was undertaking its first hospitality project: converting a historic downtown office tower into a 350-key boutique luxury lifestyle hotel.
As the project moved through design, costs came in well above what the deal could support, putting the project at risk of stalling before it ever broke ground. The challenge was compounded by the ownership group self-performing construction through its own general contracting firm, a first for a team with no track record delivering a hotel of this scale.
The Approach
Independent Budget and Design Review
- Engaged for a focused, limited-scope review to pressure-test the budget and design before ownership committed further capital.
- Benchmarked key cost categories against prototypical luxury lifestyle hotel projects to identify hidden risk.
Correcting Underestimated Sscope
- Identified and corrected underestimated line items across telecommunications, systems, operating supplies and equipment (OS&E) and FF&E.
- Replaced early placeholder estimates with figures that reflected real project scope.
Guestroom Program Optimization
- Assessed the hotel layout for circulation, back-of-house efficiency, and brand-standard compliance.
- Reconfigured the guestroom program to improve revenue potential per square foot.
Outside Review of Self-Performed Construction
- Independently reviewed the owners self-performed construction budget, giving the team an outside perspective they did not have in-house.
- Flagged long-lead risks, including structural interventions, floor-to-floor heights, and code compliance, before they became costly surprises later in design.
The Results
| ~25% Reduction in Total Project Cost | 350 Guestroom Keys Reconfigured for Optimal ROI | 8 Weeks Initial Budget and Design Review Engagement |
Within eight weeks, the SSP Consultant and his team helped reduce the total project budget by approximately 25% the difference between a project that made financial sense and one that did not. Ownership walked away with a guestroom program built for stronger revenue per square foot, corrected budgets they could rely on, and an independent read on construction costs they would not otherwise have had visibility into.
The engagement reinforced the value of catching budget risk early. A limited-scope review, delivered before further capital is committed, can protect a landmark asset from the far higher cost of a stalled or unfunded project.
Key Takeaway
When a first-time hospitality developer hits a wall on budget, the right outside expert can make the difference between a stalled deal and a funded one. On this engagement, the SSP Consultant and his team brought the owners side perspective this team did not have in-house, catching risk before it became a costly surprise and giving ownership the confidence to move forward.
What began as a short, limited-scope engagement has since grown into an ongoing partnership. The SSP Consultant and his team continues to support this project through design development and toward construction.
Facing budget pressure, an operational challenge, or a project that isn’t performing the way it should? Talk to us before it becomes a bigger problem. Contact SSP to get started.
