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London hotel performance 1991-95 (all hotels)
YearOccupancyAverage achieved rate/room £Operating profit, (1982 base) £
199166.4837800
199270.5817200
199375757000
199481.2828500
199582.2909600
Source: Panell Kerr Associates
Development standards for four- and five-star city-centre hotels
Development areasÌý
Five-star city centre70-85 m2 gfa/guest room
Four-star city centre55-70 m2 gfa/guest room
Indicative space standardsÌý
Suites48-90 m2/guest room
Double bedrooms:Ìý
-large35-50 m2/guest room
-average 30-35 m2/guest room
Allowance for partitions6-8% of bedroom area
Restaurant1.6-2.0 m2/seat
Bar1.5 m2/seat
Kitchen/food preparation and storage 0.8-1.0 m2/seat
Banquet1.2-1.4 m2/seat
Catering for banquet0.12-0.25 m2/seat
Function/meeting rooms1.5-1.6m2/person
Conference facilities0.6-2.0 m2/person
Staff restaurant/kitchen1.2 m2/seat
Service rooms30-50 m2/bedroom floor
Ancillary space allownceÌý
General storage and housekeeping350-400 m2
Front hall/entrance/lounge250-400 m2
Adminstration150-225 m2
CirculationÌý
--public and back of house areas 25%
-bedroom floor35-45%
plant rooms and ducts6-8%
Car parking0.3 spaces/guest room
Ìý21-27 m2/car space
Allowances for additional facilites Ìý
Retail units10-100 m2
Swimming pool and changing250-500 m2+
Health spa30-100m2+
Gymnasium50-100 m2+
Source: Davis Langdon & Everest and Lawson F, Hotels & Resorts, Butterworth, 1995
Luxury hotel development costs (£000s)
Development costsÌýÌý
Demolition250Ìý
Construction costs13,300Ìý
(based on £1255/m2 gross floor area)ÌýÌý
External works50Ìý
Furniture fitting and equipment3,570Ìý
Total Construction costs17,170Ìý
Professional fees @ 12%2,060Ìý
Finance costs @ 12% pa2,44621,676
(50% of construction programme)ÌýÌý
Site/existing building purchaseÌýÌý
Existing building10,309Ìý
Acquisition costs @ 5%520Ìý
Finance costs @ 12%Ìý13,579
Developer's profit @ 12% Ìý3,607
Total development costÌý38,862
ÌýSay39,000
Luxury hotel development costs (£000s)
Development costsÌýÌý
Demolition250Ìý
Construction costs13,300Ìý
(based on £1255/m2 gross floor area)ÌýÌý
External works50Ìý
Furniture fitting and equipment3,570Ìý
Total Construction costs17,170Ìý
Professional fees @ 12%2,060Ìý
Finance costs @ 12% pa2,44621,676
(50% of construction programme)ÌýÌý
Site/existing building purchaseÌýÌý
Existing building10,309Ìý
Acquisition costs @ 5%520Ìý
Finance costs @ 12%Ìý13,579
Developer's profit @ 12% Ìý3,607
Total development costÌý38,862
ÌýSay39,000
Luxury hotel assessment appraisal
Appraisal year12345678910
Number of beds (a)106106106106106106106106106106
Occupancy (b)55%65%70%75%75%75%75%75%75%75%
IncomeÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý
Achieved room rate (£) (c) 202222243253263274285296308320
Total revenue (£000s) (d) 6,8278,98910,97512,37512,86413,40213,94014,47815,06515,652
Total expenses (£000s) (e) 5,5786,9917,2438,1678,4918,8459,2009,5559,94310,331
Net income (£000s) (f=d-e) 1,2491,9983,7324,2084,3734,5574,7404,9235,1225,321
Finance costs (£000s) (g) 2,9102,9102,9102,9102,9102,9102,9102,9102,9102,910
Net income to equity (£000s) (h=f-g)-1,661-9128221,2981,4631,6471,8302,0132,21251,946**
Discount factor @ 16% (j) 0.86210.74320.64070.55230.47610.41040.35380.3050.2630.2267
Discounted cash flow (£000s) (k=h x j)-1,432-67852771769767664761458211,776
Net present value (l = total of all 10 yearly values of k)ÌýÌýÌýÌýÌýÌýÌýÌýÌý14,126
DebtÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý
Total annual debt 2,9102,9102,9102,9102,9102,9102,9102,9102,91021,562†
Discount factor @ 9.5% (n) 0.91320.8340.76170.69560.63520.58010.52980.48380.44180.4035
Discounted cash flow (£000s) (p=m x n)2,6572,4272,7172,0241,8481,6881,5421,4081,2868,700
Net present value (£000s) (q=total of all 10 yearly values of p)ÌýÌýÌýÌýÌýÌýÌýÌýÌý25,797
Total net present value (£000s) (l=q)ÌýÌýÌýÌýÌýÌýÌýÌýÌý39,923
*Total revenue is derived from room revenue (365 days x a x b x c), plus revenue from food, beverages and other sources. Non-room revenue can be derived from estimates or factored as a proportion of total room revenue.
**Includes residual value of future earnings less outstanding mortgage balance and disposal costs. Residual value of net earnings @ 8% = £68,187,000
†Includes outstanding balance of loan capital at end of year 10 = £18,652,000
Cost breakdown
ÌýElement cost (£)Cost/m2 gifa (£)% of total cost
Substructure497 80046.993.74
1.5m diameter rotary bored piles, 15m deep; pile capsÌý44 @£5,450
Ground bearing slab; 200 mm hardcore bed; damp-proof membrane; high-yield bar reinforcement Ìý1560 m2 @£50.00
Basement retaining wall; reinforced concrete 300 mm thick; waterproofing; protectionÌý300 m2 @£180
Allowance for repairs; waterproofing and strengthening to retained basement walls Ìý11 000 m2 @£36,000
Reinforced concrete suspended troughed slab at ground-floor level, isolated and attached reinforced concrete columnsÌý1500 m2 @£60.00
Frame787 30074.325.92
Structural steel framing including portal frames at roof levelÌý590 t @£970
Allowance for additional framing and trimming to openingsÌý50 t @£1,180
Rigid board fire protection to beams and columnsÌý7600 m2 @£15.00
Reinforced concrete casing to columns at ground levelÌý170 m @£100
Glass reinforced gypsum decorative column casingsÌý100 m2 @£250
Upper floors359 40033.922.7
Precast prestressed concrete floor slabs including structural toppingÌý7200 m2 @£45.00
Insitu concrete suspended slab; 150 mm thick; 7.5 kN/m2 floor loading; to plant roomsÌý280 m2 @£55.00
Galvanised steel mezzanine platforms to plant roomsÌýallow£20,000
Roof222 40020.991.67
Slate roofing on battens and felt insulatoin and profile steel decking to portal roof framingÌý2250 m2 @£85.00
Lightweight standing seam roofing, decking, insulation, colour-coated finish; to plant rooms and services areasÌý230 m2 @£50.00
Single-ply PVC membrane, insulation and ballast to exposed plant areasÌý100 m2 @£40.00
Lead roofing, code5; decking, insulation; to dormer windowsÌý60 m2 @£100
Gutters, hoppers, soakers, flashings; code 4 leadÌý160 m2 @£60
Stairs188 10017.751.41
Reinforced concrete staircase; natural stone finishes; high-quality hardwood handrails and decorative balustrades; plastered and decorated soffitÌýsix flights @£17,500
Staff/escape staircases; reinforced concrete, granolithic finishes; mild steel handrails and balustrades; painted soffitsÌý17 flights @£4,300
Access stairs in plant roomsÌýallow£10,000
External walls1 087 000102.68.17
Temporary propping, repairs and cleaning to retained stone/masonry facade; cutting pockets for connections to new structureÌý1 360 m2 @£310
Extra for repairs to stonework features, cornices, string courses etcÌý230 m @£260
Portland stone plain ashlar cladding on precast concrete units with deocrative detials based upon retained facade, including window reveals, sills, string coursesÌý1 020 m2 @£460
Extra for capping, parapet and corniceÌý75 m @£1 200
Party-wall construction; composite blockwork cavity wall with insulationÌý370 m2 @£40.00
Lightweight cladding, insulation and blockwork backing wall to roof level plant rooms Ìý170 m2 @£80.00
Louvres to plant rooms and intakesÌý60 m2 @£300
Windows and external doors611 80057.754.6
Purpose-made bronze anodised aluminium and hardwood-framed double-glazed windows; opening lights in small panes to match appearance of original windows in retained facade; temporary support and modifications to existing openings Ìý590 m2 @£600
Purpose-made bronze anodised aluminium and hardwood-framed double-glazed windows; opening lights; to new-build external wall and dormersÌý375 m2 @£450
Rotating entrance doorsÌý3 @£20,000
Main entrance doorsÌý4 sets @£4,000
Staff entrance, fire escape and roof access doorsÌý12 @£750
Loading bay roller shutterÌýallow£4 000
Internal walls and partitions526 30049.683.96
Dense concrete blockwork; 190 mm thick to corridor and separating walls of guest roomsÌý7 200 m2 @£30.00
Lightweight aconcrete blockwork; 100 mm thick to bathrooms, staff areas and all public areasÌý11 200 m2 @£19.00
WC cubicles to public areasÌý20 @£800
WC cubicles to staff areasÌý10 @£300
Full-height laminate ducts with access panels to WCs and washroomsÌý50 m @£130
Hardwood veneered folding partitions to meeting rooms and banquet areasÌý150 m2 @£480
Internal doors451 70042.643.4
Doors to guest rooms; hardwood frame; fire-rated; high-quality veneer finish and ironmongeryÌý106 @£900
Doors to guest rooms; hardwood frame; non-fire-rated; high-quality veneer finish and ironmongeryÌý232 @£700
Door to corridor and public areas; hardwood frames; fire-rated; part-glazed; high-quality veneer finish and ironmoneryÌý94 @£1,000
Doors to staff areas; hardwood frames; fire-rated; vision panels; laminate finish; stainless steel ironmongeryÌý112 @£600
Access hatches to service risersÌý106 @£150
Access doors to rise cupboards; softwood frame; fire-rated; ply-faced for paintingÌý56 @£300
Wall finishes847 40079.996.37
Plaster and decorative vinyl wall coverings to guest rooms, guest corridors and public areasÌý13 600 m2 @£13.50
Plaster and emulsion paint to staff areas and back of houseÌý3 700 m2 @£9.00
Dry lining, thermal board in M/F firrings and decorative vinyl wall linings to external walls of guest rooms, guest corridors and public areasÌý2 500 m2 @£32.00
Dry lining, thermal board on M/F firrings and emulsion paint to external walls of back of house areasÌý660 m2 @£25.00
Marble wall cladding to guest bathrooms and pubic areas; sand cement backingÌý1 860 m2 @£150
Ceramic tiling to guest bathrooms and public areas; sand cement backingÌý940 m2 @£50.00
Ceramic tiling to staff areas and kitchens; sand cement backingÌý2 620 m2 @£35.00
Hardwood veneered MDF panelling with mouldings; softwood subframeÌý920 m2 @£100
Direct decoration to blockwork in plant and storage areas; emulsion paintÌý2 150 m2 @£2.00
Allowance for dado and picture rails to guest rooms and guest corridorsÌý4 000 m @£5.00
Floor finishes247 90023.41.86
Costs of carpets are included in the furniture, fittings and equipment budgets.Ìý1500 m2 @£30
Total area of carpet is 6435 m2Ìý4250 m2 @£40
Marble floor tiles to guest bathrooms and toilets; sand cement bedÌý510 m2 @£180.00
Wood block; resilient timber flooring to gymnasia and to banquet area as dance floorÌý180 m2 @£50.00
Non-slip ceramic tiles to pools and changing areas; waterproof render bedÌý240 m2 @£75.00
Heavy-duty, slip-resistant vinyl flooring to back of house and kitchen areas; sand cement screedÌý1160 m2 @£23.00
Stained hardwood skirtings to guest areasÌý4000 m @£15.00
Painted softwood skirtings to back of house areasÌý370 m @£7.00
Marble skirtings 150 mm high to guest bathrooms and public areas; sand cement backingÌý550 m @£35.00
Coved ceramic tile skirgings to public and back of house areasÌý675 m @£15.00
Vinyl skirtings to back of house and kitchen areasÌý1500 @£7.00
Ceiling finishes412 50038.943.1
Plasterboard suspended ceilings on M/F system; skim-coat and emulsion paint finishÌý6560 m2 @£21.50
Allowance for access panelsÌýallow£25,000
Allowance for downstands, coffers and other featuresÌýallow£100,000
Fibrous plaster cornicesÌý4500 m @£23.00
Concealed grid suspended ceiling with acoustic mineral-fibre tiles to guest toilets, health spa and office areasÌý710 m2 @£25.00
Exposed grid suspended ceiling with acoustic mineral fibre tiles to back of house areasÌý1260 m2 @£20.00
Fittings2 233 00099.248.09
Fittings are included as a part of furniture, fittings and equipmentÌý3820 @£100
Sanitary appliances283 70026.782.13
Sanitary appliances to guest bathrooms; white vitreous china; recessed vanity washbasin; back to wall WC suite and bidet; heavy-gauge steel enamelled bath; white ceramic shower tray; glazed shower screen; shower installation; heated towel railÌý96 @£2,400
Sanitary appliances to guest suites; white vitreous china; two recessed vanity washbasins; pedestal WC suite and bidet; heavy steel enamelled bath; white ceramic shower tray; glazed shower screen; shower installation; heated towel railÌý10 @£2,700
Washbasins, WC suites and urinals to WCs in public areasÌýallow£12,000
Washbasins, WC suites, urinals and showers to staff areasÌýallow£10,000
Fireclay cleaners' sinksÌý7 @£250
Allowance for disabled fittings and grab railsÌý5 guest rooms @£500
Services equipment169 00015.951.27
ºÚ¶´ÉçÇø management systemÌý10 600 m2 @£15.00
Refuse compactor Ìýallow£10,000
Disposal installations100 0009.440.75
Cast iron rainwater disposal system, PVCu and cast iron sanitary drainage and vent to guest rooms and service areasÌýallow£100,000
Water installations280 00026.432.11
Copper rising main installation to all guest rooms and service areas, boosted cold water supply; hot water supply with calorifiers to each guest floorÌýallow£280,000
Space, heating and air treatment2 113 200199.4715.89
Gas installationÌýallow£20,000
Air-handling plant, chillers and pump distribution ductwork: fan-coil; gilles and diffusers to individual guest rooms and public areas; zoning control to meeting rooms; banquet areas; room control to guest room fan-coil unitsÌý8300 m2 @£160
Low-temperature hot water central heating installation including sectional boilers, pump, controls to guest rooms, public areas and back of house areas; perimeter heating to public areasÌý10 600 m2 @£60.00
Toilet extract to guest bathrooms; guest and staff WC and changing areasÌýallow£20,000
Smoke extract and supply ventilation to basement areas including dedicated supply to health spa and fire rating of extract ductsÌý1560 m2 @£70.00
Electrical installations920 00086.846.92
Low voltage/high-voltage installation; lighting, emergency lighting and small power to guest floors and public areas, excluding decorative lighting which is included as FF&EÌý8300 m2 @£85.00
Lighting, emergency lighting and small power installation to staff and back of house areas, completeÌý2300 m2 @£65.00
Standby generator, fuel storage and fluesÌýallow£65,000
Lift installations304 00028.72.29
Two 12-person passenger lifts serving six levelsÌýÌýÌý
Two 10-person goods lifts serving seven levels, one with fire-fighting capability ÌýÌýÌý
Four dumb-waiter hoists servicing two levelsÌýÌýÌý
One dock levellerÌýÌýÌý
Protective installations127 60012.040.96
Hose reels and dry risersÌýallow£35,000
Sprinkler rising main and single-level sprinkler heads to guest corridors, public and staff arenas, system linked to fire- and smoke-detection systemsÌý5900 m2 @£14.00
Lightning protectionÌýallow£10,000
Communications installations196 60018.561.48
Fire, smoke-detection and alarm systemÌý10 600 m2 @£8.50
Public address, television aerial and clocksÌý10 600 m2 @£2.50
Closed-circuit television and security installationÌýallow£15,000
Telecommunications, data and television wiring including tray, ladder lack and controls. Phones, televisions and other fittings included as FF&EÌý500 points @£130
Special installations120 00011.330.9
Swimming pool and filtration plant unit complete, including air bathÌýÌýÌý
Builder's work in connection with services230 00021.711.73
Associated buildiers' work, holes, sleeves, chases etcÌýsdfwallow 5%
Subtotal11 083 701046.2283.33
Preliminaries and contingencies2 217 000209.2716367
Construction manager's fee, staff service gangs, site estabishment and trade contractors' preliminaries - allow 15%Ìýfdadfadfa
Design reserve and contingency allowances - allow 5%Ìýfasdafadsfa
Total for hotel shell13 300 7001 255.49 100
ÌýÌýÌýÌý
Furniture, fittings and equipmentÌýÌýÌý
Guest room 106 @ £16 000 per personÌýÌýÌý
Guest room FF&E cost breakdownÌýÌýÌý
Carpets @ £1500ÌýÌýÌý
Curtains, drapes and blinds @ £2000ÌýÌýÌý
Sofas and armchairs @ £2500ÌýÌýÌý
Throw cushions @ £400ÌýÌýÌý
Writing desk and chair @ £750ÌýÌýÌý
Coffee table @ £500ÌýÌýÌý
Bed and headboard @ £1200 ÌýÌýÌý
Bedside tables @ £500ÌýÌýÌý
Dressing table and chair @ £800ÌýÌýÌý
Wardrobe / armoire @ £1200 ÌýÌýÌý
Sideboard @ £1000ÌýÌýÌý
Mirrors @ £250ÌýÌýÌý
Artwork @ £500ÌýÌýÌý
Umbrella stand @ £100ÌýÌýÌý
Bathroom stool and fittings @ £350ÌýÌýÌý
Bed cover and valance @ £750 ÌýÌýÌý
Standard and table lamps @ £400ÌýÌýÌý
Ceiling light and wall lights @ £400ÌýÌýÌý
Television, video and audio equipment @ £600ÌýÌýÌý
Sundries @ £300ÌýÌýÌý
SuitesÌýÌýÌý
Extra over costs of additional FF&E to suites 10 @ £10 000ÌýÌýÌý
Public and front-of-house areas 2780 m2 @ £350ÌýÌýÌý
Back-of-house areas 1710 m2 @ £100 ÌýÌýÌý
Kitchen equipment allow £250 000ÌýÌýÌý
Furniture, fittings and equipment382 80036.13n/a
Procurement fee only for FF&E works excluded from construction manager's agreementallow 7%asfasafdads
Design reserve and contingency allowancesallow 5%fafdafdsf
Total for hotel furtniture, fittings and equipment3 572 800337.24n/a
ÌýNet extra (savings)ÌýÌý
Ìý£/³¾2 gfaÌýÌý
Alternative element specificationsÌýÌýÌý
SusbstructureÌýÌýÌý
New-build basement retaining wall to entire building perimeter, 360 m2 @ £18003-AprÌýÌý
Secant piled retaining wall structure in lieu of insitu cast retaining walls to entire building permieter, 660 m2 @ £215-23506-JulÌýÌý
FrameÌýÌýÌý
Reinforced insitu concrete frame and troughed slabs, 8925 m2 @ £68-90(11-40)ÌýÌý
Load transfer structure to create column-free space to banquet areas, £85,00010ÌýÌý
Upper floorsÌýÌýÌý
150 mm thick lightweight insitu concrete on galvanised steel decking; screed, 7200 m2 @ £43-45(2)-0ÌýÌý
RoofÌýÌýÌý
Aluminium standing seam roofing with colour-coated finish' insulated composite steel decking, 2250 m2 @ £75-80(3-4)ÌýÌý
Mill finish copper standing seam roofing; insulated composite steel decking, 2250 n2 @ £83-88(1-2)ÌýÌý
External wallsÌýÌýÌý
Portland stone cladding in lieu of retained facade elevation 1360 m2 @ £54029ÌýÌý
Mechanically fixed Portland stone cladding 75 mm thick in lieu of precast units; blockwork backing wall; insulation; new-build construction only, 1020 m2 @ £380-400(7-9)ÌýÌý
Granite-faced precast concrete cladding units in lieu of Portland stone plain ashlar; new-build construction only, 1020 m2 @ £500-600May-16ÌýÌý
Internal partitionsÌýÌýÌý
Metal stud shaft wall system to lift shafts, 1240 m2 @ £30-ÌýÌý
Space heating and air treatmentÌýÌýÌý
Variable-air-volume system in lieu of four-pipe fan-coil system, 8300 m2 @ £180-19520-30ÌýÌý
Luxury hotel assessment appraisal
ÌýÌýÌýShell & ServicesFF&ETotal
Beirut, LebanonFive-starUS&/m214203001720
ÌýÌý£/³¾29301951125
Kuala Lumpur, MalaysiaFive-starM$/m221004802580
ÌýÌý£/³¾2540125665
Manila, PhillipinesFive-starPeso/m230 000650036 500
ÌýÌý£/³¾2750160910
ÌýFour-starPeso/m228 000650034 500
ÌýÌý£/³¾2700160860
Perth, Western AustraliaFive-starA$/m221101652275
ÌýÌý£/³¾21050801130
ÌýFour-starA$/m218651552020
ÌýÌý£/³¾2930751005
SingaporeFive-starS$/m21950-2250450-6502400-2900
ÌýÌý£/³¾2900-1050210-3001110-1350
ÌýFour-starS$/m21700-1900350-4502050-2350
ÌýÌý£/³¾2790-880160-210950-1090
Regional variations
All costs in the model are abased on a central London location. costs should be adjusted by the following factors for schemes in other regions
Outer London0.94
East Anglia0.83
East Midlands0.82
Northern0.83
Northern Ireland0.72
North-West0.86
Scotland0.88
South-East0.88
South-West0.83
Wales0.83
Yorkshire & Humberside0.82