INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

©Intelligent Offsite 2015

INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

A Guide to Evaluating the Cost of Bathroom Pods

A factory is a better place to make a bathroom than a construction site. It is warm and dry,
there is plenty of space and the conditions offer the opportunity to fine-tune the assembly
process. This means a bathroom produced in a factory setting will have fewer defects, and pod
manufacturers are able to research and implement aesthetic or functional innovations and
ways of improving quality. There is also the potential for cost savings.

A bathroom accounts for approximately a quarter of the floor area within a typical hotel room
or student residence, has the highest level of required facilities and services for such a space,
and requires at least five different trades for traditional construction. For these reasons hotel
chains and residential developers have in the past opted for the use of bathroom pods in order
reduce costs, increase health and safety and decrease project timescale as well as increase
standardization and quality of finishes.

Bathrooms make an ideal candidate for prefabrication, being relatively small and self-
contained units. Furthermore, sanitary and services provision is expensive.

Bathrooms account for approximately 8-10% of the capital cost of a hotel or residential
development construction budget, but a far higher percentage of site management time,
schedule delays and defect-list problems are rarely accounted for.

Using bathroom Pods lowers construction costs by reducing construction time, improving
quality, and eliminating the bathroom defects list. With traditional building, a multitude of
trades need to be organized to realize the bathroom design. This requires a high degree of
supervision and management on site to ensure correct sequencing and quality of work from
plumbers, electricians, tilers, floor layers, sealant applicators, decorators, glaziers, carpenters
and other specialists.

Modular bathrooms or bathroom pods do away with most of these issues and although the
capital cost may not be less than site-constructed bathrooms, savings from waste and
improved quality result in less snagging and better performance in use. More significantly,
reduced construction times mean earlier income streams from the property.

Many general contractors who use bathroom pods put the cost of managing the defects list at
€500 per bathroom on a traditional build. Many of the trades involved will require more than
one visit and separate works to complete the defects list. The defect list can be particularly
challenging for site management in both the interface co-ordination of the trades and when
undertaking the defect list and defect correction works.

©Intelligent Offsite 2015

INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

How much do bathroom Pods cost compared to site-built?

There is no such thing as a standard bathroom pod; what you specify is what you get. In
financial terms, hotel and residential bathrooms have a high level of capital costs associated
with them due to the mechanical, electrical and architectural specification for finishes, fixtures
and fittings. Any efficiency of design, manufacture and installation can result in a notable
reduction in the overall out-turn cost of the project. In addition to the overall incorporated
capital costs, traditionally built bathrooms require an intensive level of management and
logistical planning. Unlike other spaces within a hotel or residential development, bathrooms
require a significantly higher level of trade interaction when compared to other elements of the
building. Bathroom Pods will cost about the same as site-built bathrooms on a direct cost basis.
This alone is a significant value because bathroom pods are built to a much higher level of
quality than can be achieved in site built construction. For example, pod manufacturers do
tanking on their walls and floors as a standard, very little consideration is given to that method
in traditional construction.

It is also easier to renovate in the future. The tile is set with an adhesive that is impervious to
water and prevents tiles from coming loose over time. The blocking is far superior to site built
and prevents loose curtain rods and grab bars. The caulk joints tend to be much thinner than
site-built, and the ceilings have a smooth finish, allowing for an easier clean and the prevention
of mould growth.

When you compare the cost of bathroom pods to site-built construction, it is important to
make sure that you get an accurate estimate of what site-built bathrooms actually cost. Our
experience from working with many customers is that there are five key aspects to calculating
your site-built costs.

Compare Like for Like

The number one problem we see when customers estimate the cost of site-building a
bathroom is that they fail to include all the materials in the bathroom. The pod manufacturer
help by providing a detailed list of all the materials included in the bathroom. If you receive an
estimate from a general contractor it will help to use this breakout to make sure they’ve
included all the right materials.

©Intelligent Offsite 2015

INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

Include Installed Costs – Not Just Material Costs

It is very important to ensure that your cost estimate includes the cost of installation. For
example, a granite vanity cost must include the cost of freight, blocking, handling, and
installation, as well as the cost of templating which happens on most traditional builds, not
just the cost for the purchased granite itself. The pod manufacturer helps you calculate this
cost by providing an estimate for the installed cost of each component.

An example for a typical small, select service hotel bathroom is included for your reference.
In addition, the general contractor’s fee for general conditions for the site-built bathrooms
must also be included to provide a true comparison.

Use a Correct Scope of Work for Installation Costs

As industry leading consultants, we understand what it takes to install and hook-up bathroom
pods. Therefore, we can provide guidance for your sub-contractors such as plumbers and
electricians so they can give you a fair price to install the connections to the bathrooms. Often
we see that just a little education on the part of the plumber and electrician results in a more
accurate bid for installation.

Beware of Artificially Low Costs

Because we know most all of the major hotel brands’ bathrooms specifications we understand
exactly what goes into each bathroom and how much it costs. Sometimes we speak to general
contractors that estimate costs actually below the costs of the materials alone. In this case it is
necessary to revisit these estimates and we are happy to speak with you or your general
contractor to clarify discrepancies.

Credits won’t work!

Trying to have your general contractor bid the project as site-built construction and then
provide credits for the bathroom pods is almost always an ineffective exercise, which results in
higher than necessary costs for the owner. Few subcontractors will provide a full credit for any
reduction in their scope of work so it makes no sense to head down this path when you know
the outcome.

The best approach is to make an informed decision up front before going out to bid. Then you

©Intelligent Offsite 2015

INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

can incorporate the bathroom pod specifications into the bid documents and evaluate the
cost per room, as you normally would do with site-built construction. This is a fairly
straightforward proposition and only requires a correct scope of work for the major trades
involved in the connection to the bathroom. Having multiple subcontractors bid installation
ensures that sub-contractors provide a more competitive number than if asked to provide
credits.
If your project has already been bid and you are seeking credits, we have seen customers have
success with this by having the work re-bid with the revised scope of work to at least two
bidders.

The pod manufacturer helps this process by providing the architect with the information to
properly communicate the scope of work for each trade. Many customers prefer to have a
“bid set” of documents that clearly removes the bathroom from the scope of work.

What is my return on investment for using bathroom pods?

1. Time Savings

It is not unusual for bathroom pods to enable a reduction in schedule of several months’ time.
To be conservative we have included the costs savings from saving only six weeks site times. In
most cases it will probably be more than this. Faster construction also reduces construction
loan interest, less general conditions, and more profit from an earlier opening. Also, many
owners need to open by a specific date so they can maximize revenue. In Europe, The Middle
East, and Africa, the use of bathroom pods for IHG (Holiday Inn brands, Crowne Plaza etc.)
contributed to a construction program reduction from 48 weeks to 26 weeks for a typical 80
bedroom hotel.

2. Defect-list Savings

Many clients tell us that over half of the job defect-list is due to bathroom construction issues.
It is not uncommon for defect lists to require tens of thousands of Euros to correct. Poor tile
work, damaged walls and ceilings, chipped tubs, poor blocking, and damaged doors are just
some of the problems we hear about. For the sake of being conservative we have assumed that
each bathroom costs €500 to correct the defect-list, which is based purely on management
time alone. This is the time taken to manage the sub-contractors to clear their defects in each
bathroom.

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INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

3. Overhead Savings

Building bathrooms on-site requires the general contractor to coordinate five specialty trades,
each of which is dependent upon the other to do their jobs. You also have the “it was not me”
scenario when it comes to damage. Eliminating all this time and effort helps site supervisors
become much more effective at managing the construction process. Bathroom pods also
reduce the amount of site rubbish and waste, electricity, material handling equipment, and
other resources that must be used to support the site. Using bathroom pods also cuts pre-
opening room cleaning. For this analysis we have only included the reduction in rubbish
removal to provide a conservative estimate. Other elements to consider are:

Centralized Control
 Purchasing for the lead contractor is simplified with one contractor
 Buying a number of trades and materials from one source reduces procurement
resource time and effort resulting in cost savings

Sustainability
 Factory manufacturing is inherently less wasteful than traditional forms of construction
and thus more sustainable, specifically;
 Recent life cycle analysis has demonstrated that off-site construction methods reduce
the overall impact on the environment by at least 40%

Fewer deliveries to site, meaning less noise, dust and disruption

 Less construction disruption
 Work on-site is safer, quieter and cleaner
 Potentially up to 90% fewer vehicle movements’ on-site, which assists with less
disruption around the sensitive worksite

Lower waste to landfill reducing on-site waste removal and disposal costs
 Factory waste material is typically less than 1.5% compared with 7%+ on a traditional
construction site and recycling of waste is more reliably controlled in a factory
environment than it is on-site

Factory operatives are up to 250% more efficient than the same activity carried out on-site

©Intelligent Offsite 2015

INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

CASE EXAMPLE

To better understand these concepts let’s take a look at an actual example. For the purposes of
this example we are using data from a 125 room select service hotel. This bathroom is a typical 50
square-feet or 4.5 Sq. metre bathroom that includes a tile floor and walls, Bathtub and shower,
toilet, and granite vanity with basin.

Hotel Brand 4 Star Hotel Bathroom

Quantity 125
Location Europe
Construction Budget €12,500,000
Amt. Budget Financed €7,500,000
Project Duration (Mos.) 12
Interest Rate on Loan 8.0%
Rev Par €125
Hotel Operating Profit % 20%
Defect-list Cost Per Unit €500

Typical Site Built – Costs

Cost Category Installed Price

Framing & Gypsum €965
Accessories €700
Door & Frame €650
Millwork/Joinery €1000
Plumbing €2,110
Electrical €1000
Tile, Granite, Surround €2,100
Paint €600
HVAC €600
Site Cost €9,625

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INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

COST SAVINGS USING PODS

Per Bathroom Total Project

Site Built Bathroom Cost €9,625

Bathroom pod Price €9,325

Installation €300
Installed Cost €9,625 €1,203,125
Difference to Site-Built $0 $0

Savings
6 weeks Loan Interest
savings €600 €75,000
6 weeks General Conditions €525 €65,525
6 weeks Hotel Operating
Profit €1000 €125,000
Elimination of Bathroom
defect list €500 €37,500
Reduction in Trash Removal
Expense €40 €5,000
Total Savings €2,665 €308,025

% Savings to site-built 26%

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INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

Conclusion

Bathroom pods cost about the same as site built bathrooms on a direct cost basis but can result
in 26% savings due to faster construction and reduced defects-list.

How much is it really worth to have all your bathrooms in perfect condition at the end of the
construction project?

How much of your time and delays are associated with the headaches of going back and fixing
problems later?

Finally, how do your customers really feel about one of the most important areas impacting their
satisfaction?

Large caulk joints, loose fixtures, sloppy tile work, scratched mirrors and poor paint jobs don’t
make a good impression and we all see it in virtually every new bathroom in which we visit.
The maintenance burden for a prefabricated bathroom will be less, than a similar site-fabricated
version. The key to this is to plan for easy access to the services.

Many on site bathrooms are constructed in such a way that access to basin or bath traps is
virtually impossible after installation and the same goes for the toilet pan stack waste. These areas
should always be accessible for the client to maintain. Bathroom pod manufacturers consider this
to be standard good practice.

Due to the make-up of the pods it should be possible to detect and remedy any leak before the
underlying structure is affected.

EUROPEAN BATHROOM POD REPORT 2015 NOW AVAILABLE.

“We recently purchased the ‘European Bathroom Pod Industry Report’ compiled by Intelligent
Offsite. The report was extremely well compiled and contained very valuable statistics,
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individual Pod manufacturers. The report has saved us considerable time researching this
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Angela Arundel Export Manager Roman Showers

Email info@intelligentoffsite.com for more information on this exclusive report.

©Intelligent Offsite 2015
INTELLIGENT OFFSITE GUIDE TO EVALUATING BATHROOM PODS

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©Intelligent Offsite 2015