News

Latest Construction News in the Hotel and Lesiure Industry

If the recession causes overall decline to the construction sector, then surely that must hurt the most in the hotel and leisure industry. Some hotels are seeing a substantial downturn as previously cash-rich business customers cut their expenses accounts to the core or, in some cases, withdraw altogether. The many bargains on the web supports this theory; offers are there to be snapped up by customers who are able to be flexible with travel dates or book at the last minute, supporting the fact that times are tough for Basil Fawltys up and down the country.

But although it is tempting to see the recession as a fire breathing dragon there are some surprising statistics to give heart to all those who own, manage or have any interest in the hotel and leisure sector, not to mention the construction companies that are bidding for new build and refurbishment projects.

Olympics Skewing the Picture?

Sceptics will say that only once 2012 projects are stripped out can the true statistics be evaluated. But surely that is like emptying the filling out of the sandwich before counting the calories! At the end of last year construction in the leisure sector was slowing dramatically: new hotel projects were down 43% from January to August 2008 and there was every indication that the trend would continue, yet London bucked the trend, showing growth in most areas of construction, particularly as work started on the Velopark and the Aquatics Centre at the East London Olympics site. The fact is, 2012 is good for the construction industry and although it may mask the most severe effects of the recession, jobs created as the Olympic Park progresses are surely welcome.    

London Booming

The weak dollar has kept many American visitors out of the UK for some time. In May 2008 the US dollar was hovering around 50 pence but over recent months has started to regain ground. Walk around any London tourist hot-spot today and one can hear the familiar US accent back on British soil. In addition visitors from other European countries have risen. Figures from Visit London show that numbers visiting the capital’s tourist and cultural attractions were up 20% in April 2009; that’s around 3.6 million visitors streaming into the city looking for places to eat, drink and stay.  

Outside the Capital

Regions outside London are also benefiting from tourism. Butlins is about to open a brand new 200 bedroom hotel at Bognor Regis: the Ocean Hotel is part of an extensive programme of regeneration in the area, including residential, leisure and retail development as well as civil engineering works. Travelodge has just opened a brand new development at Clacton on Sea in Essex and is undertaking development at nine other sites, which when complete will create 170 new jobs with an investment from the group of over £28 million. The sites are all tourist destinations and form part of the company’s ambitious plans to treble the size of its estate by 2020.

Re-fit and Refurbish

Glenigan, the construction industry data specialist, reports that the rate of decline in new project starts slowed in May and although no true recovery is predicted the figures for the rest of the year are expected to stabilise. Many new projects relate to re-fit or refurbishment as hoteliers and leisure facilities owners make their properties more attractive to the increasing number of UK holiday makers.

A Mixed Bag

The overall picture is complicated. Increased tourism and ‘stay at home’ holidays mean that certain sectors benefit. For example, fast food outlets are showing an increase in trade as people choose takeaways over expensive restaurants or look for economical ways of feeding the kids on a day out; yet health club memberships and business bookings at hotels are in sad decline.

Opportunities for construction companies are at a premium. In a highly competitive arena, responsiveness, quality and value are key but it will take more than words to close any sale. The best way to prove performance to potential customers is through an exemplary track record and use of reference sites. What every business aims to do right now is survive but it will be those that are truly in tune with their customers that can survive and thrive.

 

SAFE contractor accreditation

Phelan Construction is one of the latest group of successful companies to join a scheme designed to help industry improve its safety record.

The Essex based firm recently received accreditation from SAFEcontractor, a programme which recognises very high standards of health and safety practice amongst UK contractors.

Phelan Construction undertakes construction, refurbishment and fit-out projects for commercial clients of varying sizes from a wide range of business sectors including healthcare, leisure and hotels, local government, commercial, industrial and residential. The company often works alongside other contractors but also undertakes entire projects from design to completion, providing a ‘design and build’ service at the outset and skilled project management throughout.

Director, Keiran O’Phelan, said: "We applied for the SAFEcontractor accreditation as we wanted to have a uniform standard across our business to protect our workers as well as to demonstrate to our clients how seriously we take the topic of health and safety. We underwent a stringent vetting process during which assessors examined both our procedures and our track record."

Darran Hughes, Operations Director of SAFEcontractor said: “Major organisations can no longer run the risk of employing contractors who are not able to prove that they have sound health and safety policies. More companies need to understand the importance of adopting good risk management in the way that Phelan Construction has done. The firm’s high standard has set an example, which hopefully will be followed by other companies within the construction industry.”

Companies that meet the high standard required by SAFEcontractor are included on a database, which is accessible to registered users via a website – www.safecontractor.com. Organisations that sign up to the scheme can access the database and vet potential contractors before they even set foot on site. These employers agree that, as users of the scheme, they will engage only those who have received accreditation.

Over 120 major nationwide businesses, from several key sectors, have signed up to use the scheme when selecting contractors for services such as building, cleaning, maintenance, refurbishment, or electrical and mechanical work.

For more information about Phelan Construction why not check out the project portfolio

Put your marketing budget to work

When costs are being cut across the board, marketing is bound to be under fire, in some cases, becoming the first casualty.  This article examines whether such cuts are justified and how budgets can be stretched.

The construction sector has been particularly hard hit as the economy reels from the effects of the credit crunch.  Some positive signs are beginning to show but it is unlikely that the fortunes of construction and related industries will turn around overnight.  For these companies marketing budgets will almost certainly have suffered as overheads are reduced, and for many the price paid for this reduction in spend will be long lasting.  Diminishing the market presence of a business by ceasing promotional activities has such an impact that it is impossible to regain ground over the short term.  Studies show that when a downturn ends companies who have made deep cuts in their marketing lag behind those who have been more sensible about maintaining activity…and what’s worse is that the lag continues for many months, even after the recession is over. 

The problem with cutting spend in this way is all down to perception.  After all, the customer makes up his or her mind based on the information available and that information is usually provided by the construction company itself.  So if you stop putting out key messages into the market place or you diminish those messages by creating confusion, then who can blame the customer for jumping to the wrong conclusion about what you do, where you are, or how you’re doing?

This isn’t to say that marketing costs can’t be cut.  Canny companies are examining where they spend their money and diverting costs into areas where they can see real benefit.  This is all about accountability of those charged with marketing responsibility.  Actions alone are no longer enough; results need to be seen by management as measurable against objectives and as playing a valid role in an increase to the bottom line.  To do this will mean serious legwork on all aspects of managing the customer relationship in addition to finding out how your work is generated and understanding who your competitors and key referrers are. 

If you believe that the only two relevant factors in a contract win are price and quality, stop and think for a moment.  Your customer will want to be reassured about many other aspects of your business before he signs that vital piece of paper.  He will need to know about your employee strength, specialist work areas, reputation, geographical coverage and accreditations before he commits his trust to you.  Any company that has been forced to cut its marketing budget would be well advised to go back to basics and look again at defining their key messages to ensure they are clearly stating this information, as well as understanding how those messages are broadcast and finding ways of putting them out to the target market place in the most cost effective and eye-catching ways.

Successful companies adopt a multi-layered approach to marketing, using a whole tool-box of methods to get their message across.  Think creatively about the marketing collateral you probably already have such as case studies, testimonials, your website, customer reference sites and news stories.  Update your website with articles and case studies, include testimonials in your responses to tenders, put out your ‘good news’ stories as press releases. 

The worst sort of budget cutting is ‘knee-jerk’ where budgets are slashed without consideration of effect.  Analysis of spend, evaluation of activity, and thinking that ‘breaks the mould’ are good business principles that will serve you well in any climate, not just a recession.  In the tough and competitive construction industry businesses ignore marketing spend at their peril.

Phelan Construction is a company that has been forward thinking enough to embark on an extending campaign of marketing, with particular focus on online activities.  The results show that potential customers are gaining a wider understanding about the national coverage and scope of work this company can offer.  Referrals through their website are increasing and business is robust. 

Construction of Social Housing

With a social housing market estimated to be worth more than £1.6 billion in 2009 alone, it is no surprise that many construction companies and contractors want to be in on the action – especially at a time when private residential and commercial building has slowed almost to a standstill.

Housing associations have two priorities relating to their stock: to update existing dwellings and to increase their portfolio share through new build.

The Government reported that in 1997 there were over two million homes that were considered below ‘decent standard’ and claimed that local authorities were not keeping up with required maintenance or demands of tenants. As a conclusion, the Government proposed an initiative that would bring 95% of social housing up to a minimum defined standard by the year 2010. Housing associations are now working to achieve this through tasks such as heating upgrades (or installation of central heating where there was none previously), improvements in kitchen and bathroom facilities and ensuring the home is warm and weatherproof. The latter may involve increasing the amount of insulation to meet targets set by the local authority or housing association to tie in with their own environmental policies.

The landlord is likely to have a team of maintenance workers that will carry out minor repairs but will almost certainly be looking to sub-contract work for major improvements. Depending on the scope of the work this might be outsourced to trades people or given to a full service construction company that can address all the areas of work that the association or the local authority requires.

In addition to repairing and upgrading existing stock, the Government has set a target of 240,000 new homes to be built each year up to 2016 in order that supply meets the three million mark by 2020. At its annual conference in autumn last year the National Housing Federation claimed that this target was in jeopardy due to the effects of the credit crunch and the associated slow down in the construction industry. Some experts have predicted that just 100,000 new homes will be produced this year – way below the Government’s target – and this is, they say, unlikely to rise above 160,000 a year over the longer term, leaving a massive short fall. Social housing providers are expected to meet about one third of the target but as funds and resources decline, this seems unlikely. Already, the National Housing Federation is predicting that more than 200,000 households will be added to waiting lists by the year 2011, some made homeless due to job losses and home repossessions, others simply because of the factors of increasing demand and lack of stock.

In uncertain economic times housing associations are feeling the pinch as much as other business and commercial organisations but there is evidence to show that they are weathering the storm better than the private sector. Funds have been secured through the Government’s three-year investment programme into affordable homes; some housing associations have been able to reduce operating costs through mergers; and others have set up partnerships with the private sector to buy up partially built or ‘ready to sell’ new properties, thus increasing their portfolio at the same time as allowing the construction company to move stock in a slow market.

The outlook for the construction company is one peppered with opportunities but beset with challenges! Every housing association is looking for the best available deal and is likely to push its suppliers hard through competitive tendering. In such a market it will be the leanest and best managed construction companies who are the winners.

Social housing providers will want to see construction firms that can demonstrate a track record in meeting timescales and budgets, with case studies and customer references to back up their claims. They will need a minimum infrastructure in place and want to see evidence of policies in areas such as business continuity, employment legislation and staff development, etc. This may seem unduly harsh, especially for the smaller company, but these are all business fundamentals that should be in any business plan and staff employment handbook. Finally, in an unstable economic climate the financial stability of the bidding company will be vital – no housing association can risk a partnership that could end in a financial meltdown and loss leading bids are likely to be seen for what they are. ‘Best possible’ deals do not mean making no profit; they mean working efficiently and effectively to achieve a good result for all the parties involved.

Phelan Construction has been successful in partnering with other private and social housing providers to provide new build stock in Essex.