Chris Osaka, CEO of Tomu Inc., chats with host Robin Trimingham about the myriad benefits of modular hotel construction and why embracing a sustainable approach not only aligns with global low-impact environmental goals, but also considers the life cycle of the building.
Highlights from Today’s Episode
This episode was supported through the generosity of the following sponsors:
Front of the House (fohworldwide.com)
Since our start in 2002, FOH has transformed an industry accustomed to the ordinary, by offering stylishly unexpected and uniquely trend-forward collections for hospitality and food service. fohworldwide.com
Chris Osaka: [00:00:00] Certainly as things become more cost effective in terms of operating costs, there will be a financial lever that incentivizes the developer or the owners to embrace more of these things, and those technologies are getting there. Many have been around for a while, but more are just getting more and more cost effective. So I think the confluence of those two things, and it’s not going to take long, will really be that pivot point for the industry to fully embrace and go that direction.
Robin Trimingham: [00:00:32] Welcome to the Innovative Hotelier podcast by HOTELS magazine, with weekly, thought provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the Innovative Hotelier, brought to you by hotels magazine. I’m your host, Robin Trimingham. There’s no doubt that sustainable development is an opportunity for the hospitality industry to make a positive impact globally. But construction budget limitations have challenged the amount that many developers are willing to spend on sustainable hospitality industry construction materials and practices that exceed current building code requirements. Modular construction is one approach to sustainable hotel development, in that buildings are manufactured in sections off site before being transported and assembled at their final destination, and the cost saving and green benefits of modular construction include shorter development timelines and less construction waste, but it has yet to be extensively adopted. My guest today, Chris Osaka, CEO of Tamu Inc, is here today to discuss why embracing a sustainable and accessible approach to hospitality design and construction offers tangible benefits in terms of cost saving, guest satisfaction, market differentiation, and long term viability. Join me now for my conversation with Chris. F.O.H is a global food service and hospitality company that manufactures smart commercial grade solutions. Headquartered in Miami, the company designs and manufactures all their restaurant and hotel products. They have showrooms and distribution centers located throughout the globe, and their products are always in stock and ready to ship from any of their distribution centers worldwide. Welcome, Chris. It’s great to get a chance to talk to you today.
Chris Osaka: [00:02:45] Great to meet you. Great. Thanks for having me.
Robin Trimingham: [00:02:47] Well I have to tell you, I am very much what I’m going to call a tiny house fan. And I realize that what you’re doing is on a much bigger scale than just one at a time. But I was really intrigued to read about some of the things that you are involved in. So I thought maybe we’d start today by asking, what first attracted you to sustainable design and in particular, modular design? And why are you working to introduce this to the hotel and vacation industry?
Chris Osaka: [00:03:27] I think what really started this was obviously with the pandemic, a lot of things were changing. It accelerated a lot of trends that were already happening. But coming from a hotel company previously and being a hotel guest at many properties, we’ve all seen the stickers that says like, hey, we’re trying to save water, please reuse your towels. I think overarchingly, that’s great. It’s a start, but it’s a drop in the bucket and that the industry as a whole can do a lot more. That’s not a cop out to improve its sustainability. And so part of that is how do we build and operate more efficient types of types of structures. So that’s how we wanted to attack it using modular building. And then with what we build, it’s really trying to address a lot of the new types of properties that travelers are looking for.
Robin Trimingham: [00:04:15] Yeah, it’s very interesting. The huge range of different places that you can stay if you’re looking at resorts or traditional hotels, Airbnb, all of that. Why do you think, though, that the hotel and vacation rental industry really needs to rethink their entire approach to environmental responsibility? And where would you like to see them think?
Chris Osaka: [00:04:47] There’s two sides of this. For us, sustainability is part environmental. It’s part kind of social. The first part of it being our view is that hospitality or staying in a hotel can be an inherently wasteful kind of experience. That’s where you take 20 minute showers because somebody else is paying the water bill. That’s where you crank your AC because somebody else is paying the electrical bill. So part of this is knowing that that’s how a guest will tend to use a hotel room. How do we make the rooms as efficient as possible, much like driving a brand new electric car rather than a 40 year old car? A lot of the hotels that are out there are older buildings, and many of them have been converted and improved, but certainly there’s a lot of efficiencies to be had by adding completely new construction into the lodging supply. And that’s just not making it more sustainable to operate over time. And that certainly helps lower utility costs. But also in the building process itself, modular building is just a lot less wasteful of a way to build things than than site construction.
Robin Trimingham: [00:05:50] You made me think of a question already. I’d love to get your opinion on. In all of this. I realize we’re here to talk about modular design and rethinking the construction process. Do you think we also need to retrain the guests? Because you’re absolutely right. Who doesn’t go to the luxury resort and take the the 20 minute shower or the hour and a half bubble bath? Don’t know who that might be.
Chris Osaka: [00:06:19] Yeah, I think the guests will learn or they’ll adapt. They’ll be they’ll become more conscious of these things. But coming from a kind of a deeply rooted marketing background, trying to change somebody’s inherent behavior is the hardest thing to do. So our thought is they will come along, they will adapt on their own. But there are things that we can do in the background to at least mitigate some of the impacts of those behaviors. And that’s it’s not just making everything low flow, but there are new technologies coming out. That means the overall utility requirements, like electrical, just become lower. Even if you have the lights on all the time, the lighting is more efficiency. That’s a really simplistic example, but those are the things that we can start doing in the background that doesn’t even require somebody to change their behavior necessarily.
Robin Trimingham: [00:07:07] Okay. So let’s talk about this for a minute. How does modular design and construction. Prioritize environmental sustainability and minimize the carbon footprint of the gas. And I guess the physical plant of the hotel itself.
Chris Osaka: [00:07:25] That starts with the construction phase when you are building something that is a custom build site built. There’s just no way to avoid, no matter how much planning and design you put into it, what happens when you start building. And I think we’ve all gone through a construction site where you see the giant dumpsters outside, and somebody’s ripping a piece of plywood and using a quarter of it and the rest of it. Now it’s an odd shape, so the rest of it goes in the bin like it’s.
Robin Trimingham: [00:07:51] Yeah.
Chris Osaka: [00:07:52] And concrete is a highly carbon impactful material. All those things add up. So with modular everything is so precisely pre-planned and not just pre-planned, but because it’s such a repeatable design, we’re doing it over and over again and getting more and more efficient in how we manufacture it. So things in terms of like our material yield gets a lot greater. We get much more precise with cuts, much less loose ends that kind of get thrown away. And so even the stuff that we do have to use, obviously we want to use more sustainable materials going into it. But what we throw out, we can also mitigate as well.
Robin Trimingham: [00:08:30] Great segway into my next question for you. I actually had a guest last year who was working on a project in Africa where they were for real, using 3D printing for modular construction, and this was for small schools, I believe. So talk to me about the types of materials that can be used in the construction and interior design process that are promoting energy efficiency and reducing waste in the waste that you’re talking about.
Chris Osaka: [00:09:06] Yeah, across the industry, I think there’s a lot of really cool things that are happening. Multiple types of prefabrication. Prefabrication. 3d printing is another one, but also just the materials that are getting used are improving. It could be things like solar panels or just getting more efficient. Insulation is getting more efficient so you have less heat loss. And so our view is that it’s all great for the industry. We want to impact things as quickly as possible. And for us it’s iterative. So we don’t necessarily need to recreate the wheel. We can build things in modular construction and in newer ways, but we don’t. Again, we don’t have to rethink how we frame walls necessarily. We just might use different types of materials that strengthen them or insulate them in a way that maybe we didn’t even have that five years ago or five years ago. We might have had it, but it might have been cost prohibitive. And so how we buy the materials and use those materials and to what degree? It’s a constantly evolving landscape right now. And in the next five years, it’ll be even more out there that we can embed into our designs.
Robin Trimingham: [00:10:09] Talk to me a little bit about water conservation. The regular listeners are going to know this, but I don’t think I told you I’m actually home based in Bermuda. And what that means is that every single last one of us drinks rainwater that falls from the sky, and we have a way of collecting it off the roof, and we store it in a water tank under the building, so we don’t actually have piped water. How is water conservation being integrated into your designs, and what technologies or techniques are you guys using?
Chris Osaka: [00:10:45] It is a full system approach. There are things that were the easy things that have been around for a while, like low flow shower valves, things like that. Those have their pros and cons. It certainly uses less water, but it’s not always like the best experience when you get a dribble of rain on you. But that is part of it in terms of just using less water. Overall, the way our system is built, we also have it looks like a flat roof, but there’s actually a pitch to it with a parapet wall where it can either drain off into off a scupper and into wherever it needs to go, or it can be captured and reused. So we have that. And then also in terms of once it is either piped in or recaptured, the types of water tanks on demand, water tanks that just become more energy efficient, you’re not necessarily ever solving one thing in a silo. You’re not necessarily doing just water. You think about how can we use less water, but use less electricity to heat the water that we have? And then what are we doing with either the runoff water in or the runoff water, the gray water that goes out?
Robin Trimingham: [00:11:49] Yeah, it’s really fascinating, the kinds of things that they can do. We don’t have it here. But I’ve also seen systems where they’re heating the bathroom floor with water running underneath the floorboards, if you will guess, it’s probably tile, but you know what I’m saying. How then does sustainable design and construction contribute to reducing what I’m going to call negative impact on the environment?
Chris Osaka: [00:12:17] Yeah, I think that’s where the operational costs really come in. It is one thing to build and to there’s that full ecosystem of the construction materials industry and the impact that has. But once you’re actually built and trying to mitigate the usage of a lot of these utilities, whether it be electric, water or otherwise, the more efficient that we can make these structures in terms of having greater insulation, so that, hey, when you do have to use the air conditioning or you do have to use the heating, that it’s just not escaping, especially with hospitality, where ideally you’re not in a closed box with a single window, you’re going to have lots of windows, especially in places like Bermuda, where you’re going to want to enjoy the view. Having all of those different openings and windows like that is a recipe for heat loss. Unless you you have the right windows, with the right insulation and the right types of heating systems that that heat those things efficiently and all of those things, especially when you multiply it by multiple units in a hotel. It’s one thing when you have a single home and you’re being more efficient, but when you have a 50 or 100 room hotel, that’s all a cumulative effect that you’re trying to reduce the amount of utilities that you’re drawing off the local community.
Robin Trimingham: [00:13:25] You’ve been talking about the trickle down effect and the overlapping impact of all these different enhancements and systems. I was wondering what you think about landscaping because the traditional hotel project, they will scrape the entire site bare, whether there was forest there or whatever the case may be. And then miraculously, a month before opening, these full sized palm trees appear out of nowhere. Is that a good approach to sustainability? What do you think?
Chris Osaka: [00:14:00] Yeah, it’s like you knock down everything and then you put your building up and then you replant everything. And a lot of times they’re not even. Sometimes they’re not even native to the environment. They’re bringing in different species just because it looks nice or that they draw more water. Part of our system is we want to avoid knocking down as much of the natural landscape that’s already there. So that’s why modular is a really nice approach, because you can do all that construction work that takes space, right? Like you’re not just building the building, you have to have places for people to set the raw materials and for cranes and bulldozers and all those things. We can do that all offsite, so that it’s really just the foundation work of the specific unit that needs to happen on site. And then our modules come in pieces. So it’s not the full thing, which means that you’re knocking down less trees to get access to where you’re actually needing to get to. And so being able to do that off site keep the natural landscape as natural as possible. I think that just kind of creates an overall lessening of the impact.
Robin Trimingham: [00:15:05] Established in 2002, is a woman owned global food service and hospitality company that manufactures smart, savvy commercial grade products including plate wear, drinkware, flatware, hotel amenities and more. Driven by innovation, F.O.H is dedicated to delivering that wow experience that restaurants and hotels crave, all while maintaining a competitive price. All products are fully customizable, and many are also created using sustainable, eco friendly materials such as straws and plates made from biodegradable paper and wood, and PBR free Drinkware. F.O.H has two established brands. Front of the House, focused on tabletop and buffet solutions, and room 360, which offers hotel products. Check out their collections today at FOHWorldwide.com. Got me curious as to how you install one of your modular units, because we’ve all seen different YouTube videos and sometimes it unfolds out of a box, if you will, and sometimes it’s more of a solid thing and we install things inside. What’s your approach?
Chris Osaka: [00:16:27] Our approach is to do about 95% of the work in our facility. We have our own designs, like the one behind me that’s pre done that that we offer to both hospitality clients and individuals. But we also do custom work too, so we can use our same modular system for a client that wants to have a different aesthetic. But we do all of that in our warehouse and we get it about 95% complete, to the point where each unit is really only two pieces, and we can get a guest room out on one truck once. The once all of the on site utilities and foundation are complete, it’s just a matter of trucking it out there, crane it it on to the foundation and marrying the two pieces up. That takes about a day. And then we weatherproof it and then put in the trim strips so that you don’t even know it wasn’t built there. So the whole process takes about 2 to 3 days for the room to get set.
Robin Trimingham: [00:17:18] That’s actually quite fascinating. So it leads me to wonder, then talk to me about who’s really interested in incorporating modular design into a hotel business. Obviously, if you’ve got a building that’s been up for 20 years, 100 years, then you would be starting from scratch to go in this direction. But what’s it like with people who are looking to jump into the hotel industry?
Chris Osaka: [00:17:48] Part of it is you don’t know what you don’t know. For us, that’s the big hurdle is to overcome the educational challenge on what what is out there for people that are trying to create new developments, what do they have at their disposal to build with? I don’t think anybody necessarily goes into it thinking, hey, I’m going to build this modular. It’s more of, hey, I have a certain problem that I’m trying to solve. Either I’m trying to speed this up, I need to find a way to do this more cost effectively, because a lot of new hotels, especially resorts, they’re in more remote places where it’s just more expensive to build out there. So they’re always trying to solve this challenge. And then inevitably, they stumble across modular or prefab as a means of doing that. Part of this is driven by just trend. We’ve seen the landscape hotel, the wellness retreats that I think have been popular in Europe for a while. Those are starting to to come across the pond, and we’re seeing more and more of those pop up in the US, where people are wanting to have a space of their own, and modular prefab options are a great fit for that. But you also to your point, you have people that are buying existing structures. Maybe it’s something historic that’s becoming the centerpiece of their concept, whether they’re doing a spa, a restaurant or otherwise, and then they’re using units just to add on and create more guest rooms because the existing structure didn’t have it.
Robin Trimingham: [00:19:04] That’s interesting. So I read that when you were into sustainability and modular design, you’re not just considering the starting point, the installation of the new building, but you’re thinking about the entire life cycle of the building up into including the point that you might someday be removing this building. Now, that is a completely foreign thing from your traditional hotel building, which is hopefully built to last and is going to be the same building there for a really long time. So talk to me about all of this with module.
Chris Osaka: [00:19:44] I guess the first thing to say is our buildings are no less permanent than anything else. These things are built to the same types of code that are required, both residential and commercial. They have to be picked up and moved. So by their very nature, they have to be very structurally sound. And once they get put on that foundation, they become a a permanent structure. I think with modular, we’re trying to get away from the use of things that are hard to change, things like concrete, you pour walls, and we’ve been in some cool hotels that are made fully of concrete. But the moment that you aren’t going to use it for that purpose and you have to start doing demolition, you almost have no choice but just to either tear it down or essentially chisel away at it until you’re dumping things into a bin and building something completely new for us. We don’t just think of how do we dispose of it, but throughout its lifetime, how can it be improved so it doesn’t need to be disposed of? Especially with the hospitality industry, where hotels operate on regular life cycles of how they need to be updated, rather than having to tear this down and start from scratch. When somebody wants a newer aesthetic, it’s a matter of just, let’s take off the wall panels and put on an updated wall panel on the exterior, removing some of the interior fixtures or flooring, and updating those to where the structure can really last a long time, because we built it in a way where it’s easy to update and adapt for its use before the moment where it actually, hey, this property is going to be completely changed. We no longer have a use for it. Then we want to make sure everything that’s in that building is as low impact to the environment as possible, when it actually needs to be decommissioned.
Robin Trimingham: [00:21:23] That’s actually very interesting. One of the other things that seems to come up a lot when you are looking at modular design is accessibility. And this is another thing that a lot of hoteliers have been struggling with because up until quite recently, rightly or wrongly, calling yourself accessible meant, oh, we’re going to put a plywood ramp out the front door of the hotel and maybe another one into the ballroom, and therefore we are accessible. Well, that’s one person’s opinion on what accessibility really means. How is modular design more suited to making a space that works for everyone, regardless of their circumstances?
Chris Osaka: [00:22:08] I don’t know if I can speak for everyone. I can speak for how we design our units, and Ada is part of that. There’s always going to be compromises when it comes to what needs to be done for Ada, versus maybe what a normal guest would prefer. And maybe the easiest example is if you’ve ever stayed in a room that has an Ada accessible bathroom, there are just rules where there needs to be certain entry requirements, with requirements where it’s like, hey, you have to have a shower curtain because it needs to be easy to roll in with our system. The way that we’ve built it is Ada is a known quantity. So all of the door widths are Ada widths, and our shower spaces are configurable so that if most of the rooms you want to have a soaking tub and shower enclosures, we can do that. But it makes it very easy for us to modify the certain number of rooms needed for a property to make sure that it is accessible, so that there are showers in those spaces, or kitchen spaces where the countertops are lower for those units. Because every piece within our modular system is also modular, so we can mix and match those pieces to achieve that goal.
Robin Trimingham: [00:23:16] When you’re talking to a hotel audience, as we are today, they are very concerned with ROI and profitability, and all of their modeling comes down to these things. So help us out here. Is there any data to substantiate the idea that using sustainable modular construction design would provide a hotel with some sort of a competitive advantage?
Chris Osaka: [00:23:50] Oh, yeah. I mean, you can talk about just the even basic metrics of hotel development, like cost per key on a cost per key basis. We are already competitive. That is number one. And then just being able to add value in terms of how quickly we can deliver these things. The normal hotel development project is 2 or 3 years. If doing offsite modular construction can save 2,030% of that time and gets that person open and operating sooner, there’s a cost that can be recouped even quicker there, but it’s also in a lot of these hidden. It’s not even hidden, just costs associated with building any new structure. And that could be the design, the engineering, all of those upfront planning that goes into not just building it, but designing it. Our system is already been designed and engineered, so that’s a cost that doesn’t have to be incurred every single project. Certainly if we’re custom designing some of the interior components, there’s a little bit of that. But the actual structural engineering has already been completed and stamped. So there’s all these different places where we are able to shave off costs that add to that cumulative savings. The other side of it is just the end result. It’s one thing to have maybe an economy scale hotel where you have 100 rooms, but your ADR is maybe 70 or $80 per night. The types of things that we are building, the data that’s out there, the rates that we’re seeing, it’s a much more premium product. So you might be able to hit the same gross revenue numbers off of having a 20 or 30 room property that requires less people to operate. It’s less. It’s fewer beds to turn and clean every night, and it’s just a more premium experience for the guests. So on a not just on a per key basis on what it costs to build, but on a per room basis on ADR and whatnot, you see it on both ends.
Robin Trimingham: [00:25:46] I’m very interested in what you were saying about this being more of a luxury product, but for a faster timeline and at least a competitive, if not a lesser price. Talk to me. Is there any data out there? Because I know a lot of this is relatively new regarding the type of guest, the demographic characteristics of the sort of person who would prefer to stay in a modular, sustainable designed resort of some sort.
Chris Osaka: [00:26:20] I think there’s a few kind of places that you can. Look, there are maybe just like the easy things are just in spending habits of ten, 15 years ago, we were a society of we spent 70% on goods and 30% on experiences in the time since and now post-pandemic, that’s flipped. We’re about 70% on experience. A lot of that going to travel now with remote work, people have had more flexibility, but a lot of people are still anchored to a city, so they’re looking for a place that’s driving distance. And we’ve seen a lot of information around drive markets that people are looking for, something that they can get to in a weekend. And so that’s where we’ve seen a lot of interest in developing properties. Are things within maybe a 2 or 3 hour drive of a major metropolitan area. And then we’ve seen length of stays get a little bit longer. So there are maybe glamping experiences that were great if you were staying two nights Friday night and Saturday night. But hey, if you can work remote and take a few calls, video calls Monday or Friday, now that might be a 3 or 4 night stay. What was acceptable for a two night stay? Maybe now you want a little bit more room. It’s less of a trailer or kind of glamping experience. It’s more of, hey, I need some more amenities in a full size room. So I guess the answer to that question is you’re always looking at proxies. It’s not necessarily people are saying, hey, I want a modular type of hotel. It’s I want an experience that’s close to where I live, but still out in nature and just by where they’re going. People have found us to use as a building kind of resource to go to those areas and create new developments.
Robin Trimingham: [00:27:53] I think you’re absolutely right, because a lot of the statistics that you’re referencing, I recognize and being particularly applicable to Gen Z, and also, I guess to the millennial parents, that of Gen Z, how they think about travel and how often they travel, how much they spend on experience. It’s radically different from what I’m going to say, my parents generation, or perhaps even my own generation. So it’s almost like we’re on the cusp of a really big change in what’s going to be the desired kind of accommodation, if you will.
Chris Osaka: [00:28:33] Another proxy is even just short term rentals. I think it was like five years ago, like 1 in 8 people have stayed in a short term rental or used a platform to do that. And now it’s like 1 in 5. So that trend line of people that are willing to just try what I would say non-traditional lodging options keeps growing every year as millennials get older, and having disposable income as Gen Z is entering that stage as well.
Robin Trimingham: [00:28:58] Yeah, I think you’re right about that because there particularly if we’re talking about a short stay like an Airbnb, I think a lot of people really enjoy trying a different kind of lifestyle experience just to test it out, if you will. And it also somehow seems to come with what I’m going to call more of the comforts of home. A lot of the time they’ll have like a better kitchen or bigger flat screen or something like that. We’ve got a couple of minutes left here. Obviously, you’re on the forefront, cutting edge of where I think a lot of design in the hotel hospitality space is going to head, at least for certain categories of travel. What do you think it’s going to take for sustainable hospitality design and construction to gain mainstream acceptance in the hotel and hospitality industry?
Chris Osaka: [00:30:00] I think that part really comes down to the guests. We’ve been seeing it every year grow, but guests are becoming more and more vocal. They’re becoming more and more educated about sustainability, whether it’s climate change, pollution or otherwise, all the different impacts that maybe they see as something that they have to deal with in their future. And because of that, they are becoming more vocal about every brand or service or product that they’re engaging with, having some sort of mission around helping solve that. So the more that guests vocalize that and demand that the places that they spend their money have that mission, I think that’s going to drive or at least accelerate a lot of this change. Certainly as things become more cost effective in terms of operating costs, there will be a financial lever that incentivizes the developer or the owners to embrace more of these things, and those technologies are getting there. Many have been around for a while, but more are just getting more and more cost effective. So I think the confluence of those two things, and it’s not going to take long, will really be that pivot point for the industry to fully embrace and go that direction.
Robin Trimingham: [00:31:04] Chris, I want to thank you so much for your time today. You’ve certainly given our listeners quite a bit to think about. You’ve been watching The Innovative Hotelier join us again soon for more up to the minute insights and information specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hotelier podcast by hotels magazine. Join us again soon for more conversations with hospitality industry thought leaders. Best.