Top tips for Building Hotels: A Guide for Family Offices

Embarking on a hotel development project presents unique challenges and opportunities, particularly for family offices seeking to expand their investment portfolios. To navigate this complex landscape successfully, it's essential to adopt a strategic approach that considers both immediate and long-term objectives. Below are our top tips to guide family offices through the intricacies of building hotels, ensuring projects are well-planned and executed to maximise value and impact:

• Plan meticulously and start early: Begin the planning process well in advance to navigate the complexities of hotel development. Conduct thorough feasibility studies and site assessments to identify potential challenges and opportunities.
• Engage in proactive due diligence: Consider undertaking pre-construction due diligence to address zoning, environmental, and regulatory issues, ensuring a smoother development process. This proactive approach can safeguard the family office's reputation and investment interests.
• Understand the regulatory requirements: Familiarise yourself with local planning and building regulations, including any heritage conservation mandates, to avoid delays and ensure compliance.
• Allocate sufficient management resources: Recognise that hotel development demands significant management time and attention. Coordinating construction, design, and operational planning can be resource-intensive and may impact existing business operations.
• Focus on operational readiness: While developing the hotel, maintain focus on operational planning to ensure a seamless transition from construction to opening, maximising guest experience and return on investment. Consult an insurance broker to understand what insurance products (such as delay in start-up cover) may be appropriate.
• Assemble a strong advisory team: Engage experienced lawyers, professional team of consultants and an insurance broker early in the process to guide you through legal, design, and strategic considerations. For family offices, leveraging expert advice can add significant value and mitigate risks, ensuring that the project aligns with broader family objectives and values.

For more on building and redeveloping hotels and the current challenges faced by family offices considering this option see ‘Building Hotels: A Guide for Family Offices’.