While the economy has taken its toll on development, especially in the hospitality world, many are overlooking the silver lining—no matter how difficult it may be to find. Certainly the ability to obtain financing is a factor, but beyond that many projects have been put on hold or cancelled as a reaction to current conditions.  Here are a few reasons why that project should be taken off the shelf and put back on the table:

Be the first out of the gate when this is all over. Hospitality is cyclical, as we all know too well, and while this may still feel like the beginning of a down cycle, it isn't going to last forever.  Project planning takes time.  Even a medium-sized project can take six to eight months to design and upwards to a year for entitlements.  Those who are able to start now will be the first out of the gates when the time is right and will be in the best position to reap the benefits of an early start.

Construction and ff&e costs are down. A year ago contractors were turning work away.  We had difficulty even raising contractor interest for large, high-profile projects.  They were just plain too busy and often overcommitted.  Those tables have now turned. Contractors are now calling us looking for work, anything to fill their backlog for 2009, anything to hold on to their people.  We've heard from more than one contractor and sub that their bids are now 15 to 18 percent lower than earlier this year.  Profit margins had grown to unprecedented levels, just due to supply and demand.  That's all changed now.

Ff&e has a bright side, too.  More reputable vendors have expanded their off-shore manufacturing operations, bringing costs down and product quality up compared to just a few years ago.  While lead times have not improved greatly, and may not, quality and consistency of product are certainly increasing.

The best talent is available now. Not only are the best contractors now available, but the best design teams are, too.  Many design firms have already had to reduce their staffing levels, but this has left leaner firms filled with their best people.  This is a great opportunity to get stellar service out of top firms that even recently were turning work away.

Renovate now to improve market share. Guests are likely to be more sensitive to value than ever.  Properties that are in like-new condition will hold an edge over tired ones.  Coming out of the cycle, properties on the leading edge of renovation will be the first in line to capitalize on new demand.

Here’s what to consider if you go ahead with a project now:

Work with an experienced and well-established design team. The last recession was hard on design firms.  Many didn’t make it or were crippled by loss of their best talent.  Work with someone you have confidence in.  Ask them who will be assigned to your project and will they be on it from start to finish.

Take bids. Bid your project competitively to at least three or four general contractors.  If you choose the negotiated contract route, be sure to compare overhead and profit lines as well as what is and what is not included under general conditions.  These two combined make up a large part of your project cost.  If you opt for a negotiated contract, be sure to have a GMP (guaranteed maximum price) with a clearly defined scope of work to minimize potential change orders.

Clearly communicate your budget to the team. An experienced design team can help you maximize the value of any given budget.  Involve them in preparation of the scope of work and clearly communicate your budget expectations.  Use bid alternates to help price parts of your scope that you might not think you can afford now or to act as tie-breakers in the final evaluation of bids.

Consult your architect if you are considering a property or land acquisition. An experienced hospitality architect can be invaluable during the due diligence phase of any acquisition.  In considering a land sale, the architect can quickly evaluate the number of guestrooms, parking, building height, even massing alternatives, and customize that information for any brand that you might be considering.  With regard to an existing building acquisition, the architect can help prepare scope and budgets for an upgrade or repositioning of the property.

Convert non-revenue generating space into profitable space. Look for hidden revenue opportunities in your property.  We recently converted a top floor of suites to a full-service day spa.  The loss of the presidential suite was hardly an impact on gross revenue, but the addition of the spa was notable.  Consider this:  You can sell a guestroom only once a day, but a well-run spa can sell a treatment room every hour.

Other sleeping giants:  gift shops turned in to coffee bars, underperforming restaurant space into retail or meeting room space.

This is a time of great opportunity for those who have the resources to make it happen.  Those who can will reap immediate benefits and will be best-positioned for a recovery when it inevitably does come.

Jeffrey S. Degen, AIA, is president and principal architect of Degen & Degen architecture and interior design in Seattle.  Prior to that, he held positions with Marriott International, Westin Hotels and Resorts and Lufthansa Hotels.

Web resource: Degen & Degen