FF&E Strategies – Are you in control?

Project delays resulting in the postponed opening of a conference centers can have many adverse consequences. In order to ease the financial pressure of the typical start up, the sales and marketing team will begin to book association and group business 12 to 18 months prior to opening. The importance of establishing an opening date and completing the conference center on schedule is critical to avoid the cost of relocating group bookings and the associated negative publicity. The same can be said for the various publications and directories catering to the businesses or meeting planners.  If group 
business cannot be layered in and publications and promotional material do not accurately reflect a properties opening, the actual opening is likely to produce poor financial results.

Critical path planning and adherence to development schedules are imperative to a project’s financial success. Managing the development schedule and assuring compliance requires that all interaction between the owner/developer, the operator and the design and construction team be managed.

Management of the development schedule requires an intimate understanding of the owner’s decision-making processes, the creation of interim milestone dates with the necessary tracking process, and the necessary expertise to provide real time solutions to remedy construction delays.

To ensure that a property opens on time, many construction contracts will include performance clauses such as bonus incentives for early completion or liquidated damages as a penalty for late completion. Other steps that can be implemented to ensure timely openings include staged occupancy of critical components of the property. Typically kitchens, training facilities, computer rooms, and laundry and operating supply areas are brought online three to four months before opening, while conference rooms, front office and reception are turned over four to six weeks ahead of 
opening.

The strict management of the development schedule, including establishing and tracking critical milestones, managing an “Action Item List” throughout design and construction and identifying and tracking long-lead items will result in a smooth ending of a long and demanding develop

Posted on behalf of Peter Stockmann, pjstockmann@me.com

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About N. Pompan

President, PHG, Inc.
This entry was posted in Operations. Bookmark the permalink.

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