 Hotel Management Beware: The Last Man Standing Could Be the Loser
 Florida-based Liberty Building Forensics Group (Liberty), a leading building forensics firm that has solved some of the world's largest and most complex building moisture and mold problems, has begun providing hotel management firms with building assessments and remediation plans to help mitigate the risk involved in a transfer of ownership.
During the life of a hotel building, certain triggers can potentially put hotel management at greater risk than they would be otherwise.
Events like major rehab work, a storm event, lease renewals, change in management contract, or sale or change of ownership usually require some sort of extensive evaluation, such as due diligence or a building evaluation by a consultant or series of consultants.
These kinds of trigger occurrences lead to an increased risk that any underlying problematic issues (such as mold or moisture) will become known, possibly causing the existing hotel management significant and unplanned costs.
Hotel management firms have the unenviable task of juggling multiple competing interests. Working in a performance-based industry, they must secure near-full occupancy while maximizing room rates and maintaining high levels of customer satisfaction. They must do all this while also staying within budget, meeting industry and brand standards, and keeping hotel ownerships happy. They operate under tremendous pressure to avoid letting any building-related issues, such as mold or moisture problems, impact profitability.
If such a problem is discovered, it often becomes the hotel management firm's job to maintain and contain the issue in such a way that can defer addressing the root cause, which can often be traced back to a design or construction flaw.
By putting off remediation, however, the manager is in reality ensuring that at some point in the future, when a trigger event takes place, the problem will come to the surface. By then, it will likely have escalated to the point that it is now much more severe and costly than if it had been resolved initially. The time lapsed may also prevent recovery from other parties that were at fault in the problem to begin with. In such situations, profitability is usually impacted dramatically and immediately.
Liberty Vice President George DuBose explained that the average building age of a prolific generation of hotels in the United States is currently 25 to 35 years old.
"This means the statute of limitations for original designers and contractors is long gone," he said. "As a result, the last recourse for hotel ownership seeking recovery of funds ends up being the hotel management firm and their liability insurance - even if the root problem actually originated with a fundamental design or construction flaw. Ultimately, hotel management firms will be held responsible if they haven't taken steps to protect themselves."
There are ways for hotel management firms to manage their risk and limit exposure of existing problems to hotel ownership groups, DuBose stated.
For example, Liberty recently assisted in the sale of a 3-star hotel in which the buyer was seeking a 7-figure discount because of mold and moisture issues that had been uncovered - but were clearly a long-term problem in the hotel.
Liberty's assessment showed that the discount should instead be in the low 6-figure range. Ultimately, the lender and the original ownership group both took discounts in order for the sale to be completed.
Liberty also provided key analysis in a California resort that new ownership suspected had a chronic mold and moisture problem. The management firm for the hotel was at risk for several million dollars of alleged damage.
Liberty conducted an assessment and, using certain diagnostic tools, showed how the hotel not only did not have an existing mold and moisture problem, but also that the hotel had the kinds of systems in place that would not allow for a widespread mold and moisture problem to occur.
 Liberty staff's experience with large hotel owners has resulted in a set of design and construction guidelines that we have placed in a manual which has been used in over $4B of construction. New hotels and resorts, from Florida to Hawaii, from the Caribbean to Hong Kong, and throughout South America and Europe, have successfully used the guidelines set out in this manual. Now you can have a copy of this manual for free by simply downloading it.
A recognized leader in helping clients design and construct complex, sustainable green buildings, Liberty proactively addresses possible failures of those same projects. Our philosophy is that proactive problem avoidance is always the best approach to avoiding mold and moisture problems.
The Liberty staff has a combined 200 years of experience in investigating mold and moisture problems and solving construction and design deficiencies, including over 30 years consulting with the largest theme park owners in the world on more than 500 highly complex construction projects worldwide.
Internationally, the firm brings the expertise and knowledge of over 1,000 projects (across the United States, Canada, and the Caribbean, as well as in Europe and Asia) to meet your needs in commercial properties. Liberty's clients have successfully built over $20B in construction as a result of our problem avoidance peer reviews. We have assisted clients in recovering over $500 million through our proven ability to understand and apportion complex moisture-related insurance claims and then to effectively communicate our findings to a judge or jury.
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