Hilton is jumping feet first into the hot new modular construction trends in hotels with the reveal of a new Home2 Suites by Hilton in San Francisco. Invited guests and the media were invited to the site in August to witness a staging ceremony and watch pre-fabricated elements of the hotel placed by crane.
The move follows a recent initiative by competitor Marriott to use modular construction to accelerate growth. Hilton’s new property represents the Bay Area’s first modular hotel, which demonstrates how the method allows for faster construction time without sacrificing quality, which is an important strategy for investors.
“Staying at the forefront of building trends has translated to faster construction and ramp-up times, making Home2Suites one of Hilton’s fastest-growing brands,” Adrian Kurre, global head of Home2 Suites by Hilton, said in a statement. “The unmatched efficiency of modular building allows us to provide a consistent, high-quality product constructed in as little as half the time of a traditional build, allowing owners to see an even faster return on investment.”
San Francisco is an interesting region for Hilton to test the boundaries and benefits of modular construction. One major benefit of the strategy is limiting the amount of local labor needed in an expensive market like San Francisco. The city and the adjacent Silicon Valley region have the highest average rents in the country, with a two-bedroom apartment currently running $3,500 or more in the Valley and more than $4,000 in the city itself. The crushing market for living space is severely limiting the amount of skilled labor available in a locale where construction is booming.
“Construction costs and labor are proportionately higher in these markets,” Kurre told Lodging Magazine. “It’s especially high in high-barrier-to-entry markets. If we can get this open earlier than a normal construction process, it will definitely increase the return on the investment.”
The property is also incorporating several sustainability measures above the common standards of the eco-friendly Home2 Suites brand. Solar panels will produce nearly half of the hotel’s energy, while a bio-retention panel will filter water run-off. The hotel will also boost sustainability efforts recycling soaps and shampoos.
The new San Francisco hotel was developed by Southern Hospitality Services and constructed by Akshar Development. The hotel is expected to offer all-suite accommodations with fully equipped kitchens and modular furniture as well as brand-specific perks like Spin2 Cycle (a combined complimentary laundry and fitness facility), a Home2 MKT for grab-and-go items, and the Inspired Table, a complimentary daily breakfast.
Home2 Suites by Hilton has more than 235 hotels in its portfolio and more than 415 in the pipeline, many of which could be augmented by the modular construction trend.
“If the process of producing modular construction and the return on the investment is a positive story, then it is a hard trend,” Kurre said. ” This is something we’ll see more of as long as it has that return on owner investment.”
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