China redux

Just when it seemed that there was nothing more to import from China, the Financial Times (subscription required) Travelodge, the budget hotel chain owned by Dubai International Capital, is planning to build up to half of its new hotels using ready-made modules imported from China. The paper notes that “The first such hotel, with 120 rooms, is being completed in Uxbridge, west London. A 307-bedroom structure near Heathrow is expected to be completed by the end of 2008. Travelodge aims to add 40 hotels a year until 2020, half of them built using the modular approach. The steel modules – which are slightly larger versions of the standard shipping container – are provided by Verbus Systems, a London-based company that owns the patent to the technology. Each unit typically contains two hotel rooms, complete with bathroom, wiring, wardrobes, carpeting and even a bed if required”.

Modular or pre-fab rooms have been in use in the US for decades and are favored for ease of construction and consists of prefabricated concrete components that range from full size, pre-finished rooms to even entire buildings. However, the design for Travelodge’s modules features 86 individual, pre-made steel modules, stacked up and bolted together. Finishing touches like FF&E will be done on site. The company expects to revolutionize hotel construction by,among other factors, stressing its portability. Presumably, when demand exceeds normal supply the modules can be wheeled in and dismantled as demand tapers off. That could potentially change the dynamics of investment in the hotel industry as the notion of a fixed asset takes on a new meaning. Travelodge expects to save 10% in construction costs amounting to an annual saving of nearly $20 million.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.