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Piecing it together: Hotels turn to modular construction for savings in money and time

 Crews work to connect modules during the crane installation of the Bricktown AC by Marriott in Oklahoma City. Eighty-one modules, all built in Guerdon’s Boise factory, came together to make up the 142-suite hotel. Photo courtesy of Guerdon.

Crews work to connect modules during the crane installation of the Bricktown AC by Marriott in Oklahoma City. Eighty-one modules, all built in Guerdon’s Boise factory, came together to make up the 142-suite hotel. Photo courtesy of Guerdon.

The hotel rooms at a new dual-branded Marriott Hotel near Los Angeles, which is scheduled to open in 2018, will be framed, drywalled, carpeted, and furnished 840 miles away in Boise.

The structure will be a modular hotel, made of blocks that were created over the course of six months on the factory floor of the Boise-based Guerdon Enterprises LLC and then trucked to L.A. to be assembled on the site. It’s a mode of construction that is becoming more common as hotel builders look for ways to save time and money.

Modular construction, where buildings are created in efficient, factory-like conditions and then assembled on site, is not new. Inexpensive modular single-family homes have been a staple for many decades in the U.S. and around the world, and modular construction for commercial buildings such as apartments and hotels has been a standard in Europe and China for years.

sqft-july-14-2017-story-blurbModular construction, sometimes using shipping containers, has become enormously popular among tiny home builders and among homeowners looking for ways to cut their carbon footprint.

But it has taken some time for modular to gain acceptance in mainstream areas of U.S. business such as hotel construction. Marriott has led the hotel industry in using modular, and was the first customer when Guerdon entered the hotel construction business about five years ago. Now, Guerdon is working on projects for the Holiday Inn Express, Hampton Inn and Suites, and Hyatt.

“They were the first major flag to really get in and start pushing the modular initiatives,” said Michael Merle, the director of Guerdon’s hospitality division, of Marriott. “Europe had a couple of decades of advancement over us, as far as the acceptance level of modular, particularly in commercial construction.”

An advantage of modular construction is that work can start on the hotel rooms in the factory floor while site work is underway elsewhere.

“One of the biggest factors that is a hook in the hospitality industry is speed to market,” said Merle. “On a smaller 100-room hotel, from groundbreaking to certificate of occupancy, we’re able to get to market  typically in six months less than they can do in a site-built perspective.”

A module containing two complete hotel suites built in Guerdon’s Boise factory is craned into place on the campus of Washington State University in Pullman, Wash. The module is one of 62 that make up the 114 suite Courtyard by Marriott. Photo courtesy of Guerdon.

A module containing two complete hotel suites built in Guerdon’s Boise factory is craned into place on the campus of Washington State University in Pullman, Wash. The module is one of 62 that make up the 114 suite Courtyard by Marriott. Photo courtesy of Guerdon.

With the 350-room hotel that Guerdon will be working on this summer near L.A., “the general contractor there is estimating we’ll be eight to 10 months ahead of schedule of what he would be able to do,” said Merle.

There are also savings in labor costs, especially if a building is going into a remote area with a very small workforce, or into California or other states where wages are higher than those in Idaho. And the Modular Building Institute, an organization designed to promote modular construction, says that quality goes up when buildings are put together in the controlled conditions of a factory.

“Structurally, modular buildings are generally stronger than conventional construction because each module is engineered to independently withstand the rigors of transportation and craning onto foundations,” the organization says. It also says materials stored in factories tend to be protected from moisture damage and other elements.

And “manufacturing plants have stringent QA/QC programs with independent inspection and testing protocols that promote superior quality of construction every step of the way.”

Modular construction does have detractors. Modular buildings don’t use as much local labor. And mass-produced modules that are shipped hundreds of miles do not convey the sense of place or harmony with surroundings of a locally designed and built structure. However, most of the hotel chains, along with the national restaurant and retail chains, are built to specifications standardized elsewhere, and are rarely constructed with an eye to indigenous building materials or exteriors.

And modular building supporters note that modular building construction usually has less of an impact on the immediate area than traditional construction does.

“Removing approximately 80 percent of the building construction activity from the site location significantly reduces site disruption, vehicular traffic and improves overall safety and security,” according to the Modular Building Institute.

Mike DelaCruz, left, and Jake Schisel move an interior wall after framing it in the factory at Guerdon Modular Buildings in Boise in June. One of the primary reasons for the growth in modular construction is the cost of labor, according to salesman Michael Merle. Guerdon’s customers cannot find or pay the skilled workers they need in big cities like San Francisco. Boise has 250 construction workers on its factory floor. Photo by Glenn Landberg.

Mike DelaCruz, left, and Jake Schisel move an interior wall after framing it in the factory at Guerdon Modular Buildings in Boise in June. One of the primary reasons for the growth in modular construction is the cost of labor, according to salesman Michael Merle. Guerdon’s customers cannot find or pay the skilled workers they need in big cities like San Francisco. Boise has 250 construction workers on its factory floor. Photo by Glenn Landberg.

Once they are completed, modular buildings look the same as their more traditional counterparts. Indeed, when you walk into a hotel room that is sitting on the lot at Guerdon’s factory on Federal Way in Boise, it’s hard to tell you’re not in the hotel itself. The corridors are still rough; they will be finished on site, along with electrical, plumbing, and other services. But the rooms are complete, down to closet doors and towel racks.

“We take these suites literally to completion,” Merle said. “With most of the ones we have done so far, the developers have shipped the furniture, fixtures and equipment, and we’re sending these things out with the beds installed, the desks and chairs, the mini-microwaves and refrigerators. The housekeepers just have to make the beds and hang the drapes and towels, and they’re guest-ready.”

Why Idaho?

Guerdon builds its projects for Canada and the 10 western states. Beyond that, the cost of shipping the modules to the site isn’t worth it, said Merle.

The company is thriving in Idaho. It stopped building modular single-family homes nearly 20 years ago and switched to apartment buildings and then the “man camp” housing that was needed during the oil boom in North Dakota from around 2009 to 2014. The company built its first hotel for oil company workers in Stanley, N.D., and then was hired by Marriott for that chain’s first modular hotel, in Folsom, Calif.

The primary reason for the growth in modular is the cost of labor, Merle said. About 70 percent of Guerdon’s business is in California, where an electrician can make $95 to $100 an hour.

“With the labor rates we’ve got here in Boise, we’ve got 250 tradesman in our factory who are working on a daily basis and I can assure you that even our senior folks that are supervising and overseeing particular stations are not getting near the rates that a standard laborer is getting in the South Bay area,” he said. Guerdon has about 250 construction workers on its factory floor and 50 support staff.

“Taking 50 or 60 percent of the scope of work offsite and being able to do that to a higher quality level at a substantially reduced price, we can save a lot on transportation to get it down there, and still come out with a pretty substantial cost advantage,” Merle said.

The Marriott Initiative

Marriott began researching modular construction in 2014 and started using modular in 2015. At a conference this spring in Los Angeles, Marriott displayed a Courtyard by Marriott guest room created by Guerdon. The hotel chain announced May 1 that it expects to sign 50 hotel deals this year that use prefabricated guest rooms or bathrooms.

Marriott has opened just one hotel so far under this modular initiative, a 97-room Fairfield Inn & Suites in Folsom, Calif., that uses rooms made by Geurdon at its plant. Four more Guerdon-built Marriotts are under construction in Pullman, Wash., Oklahoma City, Louisville, Kentucky and Chapel Hill, N.C.

“Construction is the next frontier for innovation, and modular is leading the way,” said Eric Jacobs, Marriott International’s chief development officer of Select Brands, North America, a mid-level brand for Marriott.

About Anne Wallace Allen

Anne Wallace Allen is the editor of the Idaho Business Review.

2 comments

  1. Looking forward to working with Guerdon on a new affordable/market rate apartment building in Oakland called Coliseum Transit Village. Should begin construction the first part of August.

  2. The modular industry is very amazing, it’s really took off these past 20 years, I’ve worked in over 100 Modular and HUD plants .
    I still admit that Guerdon is one of the best !