Hotel developers see dollars in prefab construction

　　Two hotel companies from opposite sides of the Atlantic are employing sites on opposite sides of New York's East River to test the concept of modular, prefabricated room construction for micro-room hotels.

　　In Brooklyn, New York-based Pod Hotels is slated to welcome its first guests to the 254-room Pod Hotel Williamsburg Brooklyn. It will be the company's fourth hotel and its third in New York.

　　Meanwhile, on Manhattan's Lower East Side, Amsterdam-based CitizenM continues to build -- or in this case, stack -- the room modules at the CitizenM New York Bowery, which will be a 300-room hotel when completed next year.

　　In typical New York fashion, time is indeed money. With both companies using Poland-based Polcom Modular for the prefabrication process, the rooms can be constructed at a rate of between two and four per day, while shipping can take four to six weeks, according to Ernest Lee, vice president of development and investments for CitizenM's North America operations.

　　With such a time frame, Lee estimates that modular construction can reduce development time by as much as 35%, while Pod Hotels Managing Director David Bernstein says a project that would typically take two years to complete can be finished in as little as 18 months.

　　Of course, both companies enable such a process by specializing in hotels with smaller-than-average rooms. Bernstein said Pod rooms can be as tiny as 112 square feet. CitizenM's rooms are slightly larger, at between 150 square feet and 170 square feet, or about half the size of a typical U.S. hotel room. The company touts its concept as "affordable luxury" by including amenities such as higher-end furnishings, art collections in its lobby, in-room iPads ("MoodPads") for temperature and media controls, and full-service roof bars.

　　For CitizenM, the concept is tried and true. The company has used modular construction in seven of the dozen properties it has developed since opening its first at Amsterdam's Schiphol Airport in 2008, including both hotels it opened in London last year.

　　"We can offer a four-star hotel at a much more reasonable price," Lee said when speaking at the NYU International Hospitality Industry Investment Conference in June. "When you compare us with a traditional hotel, we can get 25% more keys than a traditional floor layout."

　　The smaller rooms and hotel footprint make modular construction more feasible for builders.

　　For Pod Hotels, the modular concept is a new one. Having opened its first property in Manhattan in 2007, the five-story Brooklyn structure is its first using modular construction because of its low floor count relative to Pod's other three properties.

　　Both Lee and Bernstein allowed that there is a learning curve for developers and contractors unaccustomed to the prefab process. For example, Bernstein said, the off-site module construction can create problems not normally encountered in his company's development process.

　　"They were using the wrong carpet glue," he said earlier this month. "We would've caught that after 15 or 20 rooms, not after the whole thing was done."

　　Still, both companies say modular construction will enable them to pursue more aggressive expansion than they would have otherwise considered.

　　CitizenM last month opened a 338-room Paris property and announced plans to enter Washington, D.C. Lee estimated in June that the company had about 15 properties in various stages of development.

　　Bernstein said Pod is "actively involved in Philadelphia right now" and is pursuing sites in Boston and Austin, Texas. The company is also putting the finishing touches on Manhattan's 670-room Pod Times Square and is slated to redevelop a 1920s hotel in downtown Los Angeles by 2019, though neither of those projects will use modular construction.

　　"The goal was to save time and money, and of course time translates into money," Bernstein said. "If this is really what we think it will be, it makes our whole Pod concept much more lucrative."