It was a good year for construction companies. They were able to get new hotel projects started or awarded, and the prices of most building materials have leveled out. Hotel Business caught up with Justin R. Beebe, president, Integrated Construction; Neal Patel, president, Letap Construction; and Mike Zerr, president, Zerr Enterprises, to find out how their companies did in 2023 and get their insights on what to expect in 2024.
—Adam Perkowsky
Has 2023 lived up to your expectations? Why or why not?
Beebe: 2023 has exceeded our expectations. It has been a record year for Integrated Construction in terms of projects under construction and total company revenue. We brought on new clients, and worked with new brands and, subsequently, new key personnel.
Patel: Yes, 2023 lived up to our expectations and exceeded them. We were able to complete three projects and pick up a few new ones.
Zerr: 2023 has surpassed every one of our 28 years in the hospitality renovation business by leaps and bounds. Most of our 2023 projects were select-service and extended-stay brand properties, unlike the pre-pandemic projects which were mostly full-service and luxury properties. The year has been stellar and substantially broken all of our previous year’s records.
Neal Patel Letap Construction
The price of building materials and the supply chain have been challenges for construction companies. Have they improved?
Beebe: The availability of certain building components, such as windows, concrete and trusses, have improved, as have lead times. Other items, including switch gear and elevators, continue to be a sourcing challenge. Early procurement and constant communication are key elements you must maintain to have a fighting chance at getting your products on time.
Patel: We are starting to see material and labor prices stabilize, and some even decrease. I think costs will continue to decrease throughout the next year.
Zerr: The increased cost of materials is real, but not hugely impactful, as our clients generally understand this fact. The best news is that the unpredictability that we have seen in the last few years regarding freight and delivery of overseas materials actually seems to have worked itself out.
What have been your most rewarding projects this year?
Bebee: My most rewarding project this year is not any particular building we have built but rather seeing the excitement from our superintendents when they email us a certificate of occupancy. I enjoy the conversation with our project managers when they tell me about how they solved a challenge on the project. My favorite phone calls are from clients telling me how much they appreciate their project team. We built and turned over great projects this year, but my reward comes from the measurables you can’t see by just driving by the project.
Patel: This year, our Hampton Inn and Suites in Speedway IN, has been our most rewarding project. We were able to open just before the Indianapolis 500 race weekend and capture that business.
Zerr: It’s always rewarding and fun for our project managers to be able to work in all parts of the country, and 2023 was no different. We started our year out with a project in Kirkland, WA, at a Marriott Courtyard property. We’ve had quite a few projects in the Phoenix area and Salt Lake City, where we had successful completions of a Residence Inn, a Courtyard, a Hyatt House and a Fairfield Inn. Chicago always provides us with a project or two each year, and we’re ending our year with jobs up and down the East Coast from Rochester and Syracuse, NY, to Virginia Beach. We fully renovated our first Aloft Hotel this year and look forward to starting our first Element Hotel in the first quarter of 2024. Our most rewarding factor was not necessarily a particular project, but the fact that we are lucky enough to be able to have clients that are seasoned professionals in the industry, which not only makes projects successful for all involved but also makes them just plain fun.
Mike Zerr Zerr Enterprises
What is your forecast for 2024? Do you expect that there be more projects on the horizon?
Beebe: We are very bullish for 2024. Although there continues to be challenges with financing, site selections and rising costs, we see a lot of traction on new developments. A few projects that were stalled in 2023 are showing positive signs of moving forward in 2024. Developers want to develop, and lenders want to lend. We just need to see our economy go in a direction to let everyone get back to a more normal means of business.
Patel: We are projecting our busiest year yet for 2024, with more than $200 million in construction planned. We are projecting experienced developers/sponsors to continue building in 2024.
Zerr: A few months ago, I would have said that 2024 was going to be a bit slower, but in the last few weeks, we have contracted to start a number of projects in the first quarter and are starting to bid on projects beyond that. With any luck, we will all be pleasantly surprised at how 2024 shapes out.
