‘Combo’ hotels offer myriad cost-savings advantages

WORLDWIDE Hotel developers are increasingly turning to hybrid hotel projects, also known as “combo” hotels, that are co-located as a way to improve bottom line performance.

Take the Homewood Suites by Hilton and Hampton Inn by Hilton at Toronto Airport Corporate Centre in Etobicoke, Ontario, opened last year. The hotels, which comprise 252 guestrooms, were able to reduce total floor space by about 5%, which means the land required for the two properties was less, which also lowered the cost. Total construction was about 5% to 10% cheaper than it would have been if the properties were not co-located, property owners estimate.

The hotels pay less in total utilities every month through efficiencies in sewer, power, water and telecommunications. There are also considerable cost-savings related to volume purchases for services and supplies.

Best of all for consumers, having to “walk” patrons who have been overbooked is a much more painful task. As a bonus, since the properties are co-owned, the overbooked reservation is kept “in-house,” so to speak, albeit not literally.

Here are a few examples of itemized cost savings at the co-located Hampton and Homewood in Etobicoke…

  • Constructing one pool instead of two saves the cost of one pool and associated mechanical and electrical equipment. Savings: C$175,000
  • By only constructing one pool and fitness facility, the building area is reduced by approximately 5,000 sq. ft. At a building cost of about C$100 per square foot, that equates to about C$500,000.
  • Combo buildings utilize common mechanical and electrical rooms and systems.  The hotel estimates that it saves about C$360,000 per year on this expense.
  • Combo buildings require less land. Whereas two individual limited-service properties of 125 guestrooms each would require about four acres total, the co-located properties were built on 3.5 acres. The estimated cost-savings here is about C$200,000 in land and landscaping expenses up front.