A few weeks ago we had a stand at the two day exhibition at London’s Excel Exhibition Centre, entitled ‘The Hospitality Design and Hotel 360 Show’. I was honoured to be invited as part of the exhibition to be a keynote speaker in conjunction with 11 others speakers from companies such as Premier Inn, Hyatt Hotels, Marriott International & Radisson Hotel Group. I was certainly in good company. Taking the closing speaker slot on the final day of the show, I entitled my 30 minutes presentation around the title question.
It is the question we are always asked, but how long is a piece of string? – there is no magic answer on a £/m2 basis but I sought to present some guiding principles which I have now listed below:-
Restaurant renovations costs are always relative to the size of the space, condition, materials being used, Labour costs etc.
Cost planning is interactive process, performed insteps in increasing detail as information becomes available. We can discuss cost data in various ways, each having a validity and use in checking and comparing costs (distinct rates/ detailed elemental unit rates/ costs £/m2 of gross floor area/ functional unit rates).
During Planning phase: start by evaluating the existing condition in your restaurant or proposed site.
- Hire a professional team with industry experience to manifest the brief
- Consider brand personality of your restaurant ( what is your target demographic?
- What kind of fare are you offering?
- What is the style of dining experience do you wish to provide?
- Create a clear idea of the at,sphere you want to manifest to streamline your renovation or fit out decisions.
In briefing specification considerations, seek to decide proposals for ceilings, decor, type of flooring, furniture, kitchen equipment (new or replacement) , type and style of lighting, wall coverings and window treatments.
In setting budgets for fit out:
- Spend time talking to projected clientele.
- Get an idea of what they feel makes a memorable dining experience
- Spend time visiting other local restaurants to take note of what works and what might not
- Set a comfortable budget so that you know what resources are available for you.
- Ensure include sufficient & appropriate levels of contingency to accommodate any unforeseen expenses that may arise
Size/ area: restaurants are built at average costs between £1000- £3000 /m2 (some mega projects or ultra high end projects will greatly exceed this). Costs are affected by the level of general cost/area being diluted by the effect of ‘fixed costs’ which are related to items such as kitchen/ bars/ toilets and not necessarily directly proportionate to area of trading.
Normally expect a proportion of approximately 60% FOH/ 40% BOH.
Level of specification: the level of specification from base level through to high end will impact the £/m2.
The type of are fitting out is certainly a factor – your spend will be more £/m2 for a fine dining restaurant than a fast casual concept.
Scale of repeat fit out/ roll out: the financial model for creation of a new restaurant concept will increase £/m2 on initial implementation vs established roll out concept. Eg an established brand name coffee shop might cost £1000/m2 but unlikely to provide same level of fit out on new concept at first site
Front of house fit out: the customer experience has to be right for the concept/ ambience you are trying to achieve.
Number of covers needs to provide sufficient people to maximise sales but make comfortable
Furniture fixtures and equipment: typically 30-40% of budget is allocated to FF& E. cost of a commercial chair could range between £80- £800 depending on level of specification of concept.
Services installations: these are ‘non contact’ costs in that the customer does not actually get to touch them but they add to the experience and comfort – need to consider extraction/ fresh air supply, new vs existing installations, adaption and maintenance- you won’t get a warranty on existing works
Kitchen: a significant proportion of a restaurant’s fit out cost relate directly to the kitchen – think electrical/ gas connections, Plumbing, commercial catering equipment- depending on space kitchen can account for as much as 60-70% of entire budget. An average 60m2 kitchen could cost between £180,000 to £360,000
Working in an existing kitchen space can dramatically reduce construction costs, however expect to refurbish/ upgrade/ maintain to suit day to day requirements of concept. Other cost ‘savings’ could be to lease equipment ( puts cost on revenue expenditure rather than capital) or purchase of second hand equipment however in this instance consider warranties and compliance to latest regulations.
Toilets: requirements for number of cubicles/ toilets are based on Building Regulations related to number of covers. Costs per cubicle will be increased with higher levels of specification. Consideration of unisex or whether allocated toilets will affect special requirements in implementation. Unisex toilets tend to have less requirements for total circulation space.
Client directs: why should you employ certain contractors directly? You will have an ongoing relationship in terms of revenue costing with certain installations thus a requirement to have direct contact from installations eg music installation, intruder alarm/ security/ cctv and/ or works might be simple and outside of the contractors general working, so no need to incorporate in their works and attract OH& P mark up by the contractor. Eg furniture installation or tills installation
Summary suggestions for budgeting your hospitality project:-
- Hire a professional team with previous experience – undertaking yourself may save a fee but often will lead to increased and unnecessary costs and frustrations
- Consider the brand and personality of your restaurant/ bar/ cafe- this will dictate the level of specification of your fit out
- Spend time to speak with your prospective clientele
- Allow a suitable and appropriate level of contingency- unforeseen matters will often arise due to existing building construction or breakdown of existing plant and equipment
- Consider capital and revenue costs (lease costs)- how you structure your payment and finding of your fit out
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