Hospitality Trends: A Q&A with Joe Saatkamp

This article originally appeared in the Winter 2017 edition of the Beck Cost Report.

By Crystal Cantu, Communications Manager

Over the last 18 months, The Beck Group has enjoyed significant growth in the hospitality market. In fact, 25 percent of our existing work in preconstruction features a lodging component. We’ve also recently completed, or are working on, 25 hospitality projects.

Having built over 35 million SF of hotel spaces and delivered over 6,500 rooms, hospitality is a critical market sector and one that requires we remain relevant in the landscape.

To maintain our competitive edge, we sat down with Joe Saatkamp, founder and president of Nashville-based CAPEX Project Management, for a Q&A session to learn from his insight on trends in the industry, as well as in design and construction.

Q. Your experience in hospitality started at TRT Holdings, Inc., the ownership entity of Omni Hotels. What is it about this industry that drew you in and eventually led you to start CAPEX?

The first projects I managed at TRT were condos and Gold’s Gyms, but because TRT also owned Omni Hotels, the transition to hospitality was a natural one. Shortly after I started, we broke ground at the Omni Fort Worth Hotel. In 2008-2009, I was promoted to vice president of design and construction and from there, it was all hotel work for a few years.

During my time at TRT, I grew to appreciate the commitment needed to build and maintain a hotel. It’s a miniature city and it’s on 24-7. You’re dealing with meetings, the public, parking, food and beverage, back of the house operations and guest rooms. It’s one of the most complex building types you’ll find, which makes the owner’s rep role critical to the process.

I enjoy my role in designing and building functional spaces that last a long time. It’s rewarding to visit past hospitality projects because, unlike other market sectors, you can go back and personally enjoy the space.

Q. Hospitality is changing more rapidly than ever before. How is technology affecting the industry?

Technology is driving change. It impacts everything from complex management systems to mobile apps on your phone to something as simple as unlocking a room door – and even that is evolving.

There are hotels still using card readers and radio-frequency identification technology, or RFID, but Bluetooth-enabled devices linked to phone apps are some of the most talked about hotel technology trends out there. More and more hotels will switch to Bluetooth-enabled systems, but will wait until undergoing large renovations to switch.

It’s not just door locks, its anything related to the ideal guest experience. Hotels want to satisfy tech savvy, millennial-aged guests.

I’m working with Virgin Hotels – they’re relatively new in the industry – but are on the forefront of innovation. You can use the Virgin app, LUCY, to order room service, text the front desk, change your room’s temperature, control the TV, unlock your door – you can even skip the front desk and check-in from the app. Virgin, and others like them, are disrupting this industry for the better.

Q. How is the technology you just described affecting design?

Brands are designing for millennials because they want it and are using the technology. This has given way to new and unique boutique hotels like Virgin – properties that max out around 100-250 rooms.

On top of technology, millennials care about amenities like cutting-edge design, communal lobbies, unique restaurants, live event venues, and cool rooftop bars. They care less about the size or comfort of the room because they’re spending more time exploring whatever place they’re visiting. Other brands like, ACE hotel, are also doing a great job of executing this type of experience.

Bigger brands like Marriott and Hilton – known for business and larger-scale leisure resorts – have also created boutique offerings. The trends developed in boutique hotels are seeping over into the larger group and convention center hotels.

Q. Tell us about a trend that really excites you.

I’m really into thoughtfully designed spaces. People don’t want to walk into a room that is over designed with layer upon layer of unnecessary stuff. They still want cool architecture and great design, but as much as they want it to look interesting, the end product has to be functional.

Boutique brands are really owning this trend. The ones I work on are shifting the idea of “what luxury means” on its head and it’s fascinating. They’re showing us that minimalism is luxurious – like polished concrete floors. That’s not to say there won’t be five star offerings, but I’ve noticed they too are scaling back. The other beauty of this trend is that it manages costs.

On the construction side, light gauge framing systems are gaining some momentum as an alternate structural system. I like the technique, but it may take some time to improve the process and technology before really catching on.

Q. What are you doing to manage the rising cost in materials and labor shortages?

ROI is the key driver when it comes to managing construction – including things that are out of your control like rising material and labor costs. My team and I are always exploring what will benefit our clients.

We’ve looked into prefabrication as a cost saving method. We’ve had success in modularizing skin and other systems, but for most of our projects, prefab of full bathrooms or entire guestrooms doesn’t make sense – at least in lower labor cost markets. As technology progresses, there may be smart ways to leverage large, prefabrication kits.

Most of our building product involves cast-in-place concrete and post-tension slabs, but we’re doing something different on one project by using tunnel form construction, which essentially means your guestroom walls are concrete in lieu of drywall. The technique isn’t new – it was popular in the early 2000s. When it’s designed right and executed well with experienced partners, it’s faster, improves acoustics, and saves money – especially now that we’re seeing the cost drywall increase.

The other common way to save money in the industry is by procuring furniture, fixtures, and equipment (FFE) from China. For us, this makes the most sense in guest rooms because those areas feature high volume, repetitive pieces. We may occasionally source domestic FFE for one-off pieces in communal or public spaces.

Q. What one trend do you anticipate will be big in the next 5-10 years?

We’re starting to think about the future of parking and parking garages at our properties. Over the last three years, I’ve seen the ratios of parking stalls to keys decrease.

This is because fewer guests are driving their own cars or using rentals. More and more are using Uber or Lyft and we expect it will continue. We’re asking ourselves, “What is the minimum amount of parking we can do?” and “How can we plan ahead by adjusting floor-to-floor height so that space can be converted in the future?”

It’s going to require lots of exploration but some solutions we’ve talked about are minimizing speed ramps and increasing the clearance heights.

About Joe Saatkamp

Joe Saatkamp founded CAPEX Project Management after 20 years of experience in the design and construction industry.  Joe earned his Bachelor of Engineering degree from Vanderbilt University.  He honed his project management skills at The Beck Group, a large architectural and construction management firm.  He then went on to develop his owner’s representative abilities leading the design and construction department for TRT Holdings Inc., the ownership entity for Omni Hotels and Gold’s Gym International.  Joe brings a depth of experience, expert management abilities, and proven leadership to bear on all CAPEX projects.