How to Mitigate Pitfalls in the Hotel Pre-Opening Phase

By Nayla Chowdhury, Senior Director – Asset Management, Stirling Hospitality Advisors

Whether you’re a seasoned hotel manager or a first-time hotel operator, the hotel pre-opening phase presents significant challenges that, if not managed carefully, can lead to delays, budget overruns, and operational inefficiencies. Each step, from planning and construction to staffing and financial management, requires precise coordination. Therefore, establishing a clear, time-bound critical path is crucial for effective pre-opening management. Below are the key risks and recommendations for mitigating them.

1. Planning and Construction Delays

Construction delays are among the most critical risks during the pre-opening phase. Multiple stakeholders— Owner, Operator, and Contractors— must agree on layouts, facilities, and entertainment plans. Delays in finalising approvals, such as design or snagging templates, can push back opening dates and increase costs. To avoid this, it's essential to define clear timelines and accountability from the start, ensuring all parties agree on a final opening date. Regular, structured meetings, such as weekly updates, should be held to address any emerging issues promptly.

2. Staffing Challenges

Recruiting key personnel, particularly the General Manager (GM) and senior leadership, is another area prone to difficulty. Early discussions about recruitment timing, salary structures, and housing arrangements are crucial to preventing potential problems. Misalignment between stakeholders on staffing needs or housing can lead to tension, especially if temporary labour is required during pre-opening. Ownership and the Operator must collaborate effectively to streamline the recruitment and onboarding process for key personnel, ensuring that all leadership roles are filled in a timely and efficient manner.

3. Financial Planning and Budget Control

Pre-opening budgets often face discrepancies between forecasted and actual expenses, which can lead to budget overruns if left unchecked. To prevent this, operators should reconcile the budget every month, comparing actual spending to forecasts and making necessary adjustments based on variances. This proactive approach helps ensure that the funds allocated for the entire pre-opening period are managed efficiently, preventing any financial strain during the later stages.

4. Operational Readiness

A crucial step before opening is the 4-week dry-run period, designed to identify and address operational issues that could impact the guest experience and damage the hotel’s reputation. This trial phase should be used to stress-test all systems, from front-office operations to back-of-house logistics. Ensuring that key systems such as Property Management System (PMS), Guest Room Management System (GRMS), and Building Management System (BMS) are set up on time is vital to the hotel's smooth operation. Any problems that arise during this phase should be immediately rectified. Additionally, securing all required licenses, such as those for liquor and insurance, and finalising utility accounts before opening will prevent operational disruptions.

5. Procurement and Supply Chain Management

Timely procurement of operating supplies and equipment (OS&E) is crucial for smooth pre-opening operations. Delays, whether due to long lead times or supply chain disruptions, can affect the readiness of hotel spaces and overall operational efficiency. Early and strategic procurement planning, with clear timelines for each delivery, is essential. Regular collaboration between procurement teams, operators, and stakeholders helps identify potential delays with critical items, ensuring alternative suppliers are engaged if necessary.

6. Legal and Compliance Issues

The pre-opening phase involves navigating complex legal obligations, such as obtaining building completion certificates and ensuring compliance with safety and fire regulations. Delays in these areas can result in costly postponements of the opening date. Moreover, the Delegation of Authority, which includes the Power of Attorney and Bank Payment Authority Matrix, is crucial to empowering the GM and the pre-opening team. Early engagement with legal teams helps secure all necessary licenses and certificates on time, while regular communication with regulatory authorities ensures inspections and approvals are obtained when needed.

7. Marketing, Sales, And Public Relations

A solid Marketing, Sales, and PR strategy is essential for a successful hotel launch. These activities, often governed by the Hotel Management Agreement (HMA), require joint approval from both the Owner and Operator. A well-coordinated approach during the ramp-up period— whether for a soft or grand opening— can determine the property's success. Early planning of promotional activities, media engagement, and sales strategies enhances the property's market presence and ensures high occupancy during the critical early stages of operation.

8. Asset Management

Asset management, which involves advising ownership and supervising the project management team, plays a critical role in the hotel’s long-term success. Early involvement of the asset manager helps identify potential issues and ensures that the hotel meets both operational and financial goals. This hands-on approach allows the asset manager to gain a deep understanding of the asset and ensures that all decisions made during the pre-opening phase align with the ownership’s long-term interests. 

The pre-opening phase involves various interconnected challenges. However, with meticulous planning, strong communication, and proactive risk management, these obstacles can be effectively mitigated. By focusing on key areas such as construction, staffing, budget control, and compliance, hotel teams can ensure a smooth transition into full operations, laying the groundwork for long-term success.