Project report on construction of hotel/hostel

1. PROJECTMANAGEMENT FOR RENOVATING A HOSTEL
Department Of Business Administration
Turiba University
Professor
Ivars Linde
Prepared By: Abens Anna Jacob
Group: UMA1V22

2. CONTENT
1. ProjectSummary
1.1 ProjectScope
1.2 ProjectJustification and Main Problem
1.3 SWOT Analysis
2. Alternatives
2.1 Evaluation of Alternatives
2.2 Choosing the Best Alternatives
3. Developmentof Concept(WBS)
3.1 Workbreakdown Structure – Alternative A
3.2 Workbreakdown Structure – Alternative B
3.3 Schedule Planning
3.3.1 CPM for Alternative A
3.3.2 CPM for Alternative B
4.1 Cost Estimates for Alternative A (with Gantt chart)
4.1.1 CostEstimates for Alternative B (with Gantt chart)
5. Comparisonof Profitability
6. Strategic Analysis
7. Risk Analysis
7.1 Conclusion about selecting bestalternatives
8. ProjectDescription
9. Conclusion

3. 1. PROJECTSUMMARY:
The basic idea is to initiate and develop this project is mainly based on the
merging needs of stay in Riga. It has been observed that now a day more and
more trend of hostelling has beenfound in twin cities. Hence, it’s creating a
business opportunity for many organizations in the near future it’s gone be a
profitable business field.
According to the data of the Central Statistical Bureau (CSB) in 2015, 2.1
million foreignvisitors stayed in Latvian accommodationestablishments,
which is 2.0 % more than in 2014.As compared with 2014,the number of
foreignvisitors grew by 3.1 %, reaching 1.5 million. The average length of a
stay of foreignvisitors in accommodationestablishments was 2 nights.
Of all foreignvisitors “79.1% stayed in Riga”, 8.2 % - in Jūrmala, 1.7 % - in
Sigulda county, 1.5% - in Ventspils,1.5% - in Liepāja.
Although the issue of safety and security remains the primary reason which
keeping people to avoid hostel. As the recent trend shows that people are
gaining more confidence about staying in hostel especiallysolo travelers.
From 2011 to 2014,for example, SITA World Tours’ solo traveler bookings
increased by nearly 64%, generating an increase of more than 90% in sales,
the company said. Although a good hostel should present the following
factors to the customers forbetter usability:
* 24 hour reception;
* Transfer from/to airport
* Laundry facilities
* Printing
* Two commonrooms;
* Party room;
* Fully equipped kitchen;
* City maps;

4. * Wi-Fi;
* TV & DVD;
* Personal Computer;
* Tourist Information;
* Hairdryers;
* Iron and ironing board;
* Hot beverages and milk;
* Board games;
* Parking place;
* Book exchange shelf;
* Lockers;
* Front door keys;
* Luggage storage;
* Bed linen;
* Towels;
* Slippers;
* Baby cot;
* Ear plugs;
* Bicycle rent (seasonal)
1.1 PROJECTSCOPE:
Since most people only rate a hostel by it look, facilities, amenities and its
location and etc… So it is important to selecta good site which is really close
to city and easy to connectwith other places. Therefore,we have selected a
place in Riga Town because it is really close to supermarkets, restaurants,
the train station, the bus station, airport etc….
Renovating a 2 story – building to hostel requires a considerable amount of
money. We need to make a good impressionby choosing an exterior
productand style that will give a good appeal to the hostel. So, it is very
important to designthe hostel in such a way that it can deliver all the needs
of our customers.Total area covered forthis projectis 35,000 sq.ft.It is very
important to decide how many rooms we want give for rent and how much
spacious we need the room to be. Considerhow much money you have in
the bank and how much you are willing to borrow when deciding which floor
plan to go for.
We can easily add more rooms in second floorby adding more room
partitions and same time we can reduce the number of rooms by removing
the partition. Which allow you to give more single occupancy rooms for solo
travelers who preferto stay alone.

5. 1.2 ProjectJustification and Main Problem
One of the biggestproblemswhichare oftenfaced bythe travelers is feeling
lonely and getting lost in their way. Therefore it is important to offerthem help
in social and practical integration process by organizing cultural and social
events in order to ensure that the travelers learns to adopt the new local
necessities and becomes integrated into the new social network.
Anna Builders Pvt. LTD is a reliable construction company. Recently we have
signed a contract of renovating a 2 story - building to hostel with modern
facilities in Riga town with Mr. Frank Marc. Therefore Anna Builders (Pvt.)
Limited will completethe renovation of the hostel as per the requirements and
specifications provided by the client.
The duration decided forthis projectis 8 months with basement, first floorand
second floor.
1.3 SWOT analysis
STRENGTH:
 Location
 Reasonable and Flexible
pricing
 Heritage & Museums
 Night life
 Transportation
WEAKNESS:
 Famous and busy destination
 Rely heavily on tourism
 Diversity
 Things you need to improve
OPPORTUNITIES:
 Business Hub
 Surge in tourist arrivial
THREATS:
 Pandemic issues
 Strong competion
 Seasonality
SWOT

6. 2. Alternatives
For the attainment of the whole development of the project is influenced by the selection of
the outstanding alternative which fits better into criteria such as budget, time management,
etc. In the course of our research three convenient alternatives emerged that may meet the
requirements of our client. In the process within the alternatives there is no distinction
between different locations or transport companies etc., but rather between the project team.
The three alternatives are described as follows:
 Alternative A: The whole renovation will be well planned, designed and organized within
the company with a project team. The team has to be determined.
 Alternative B: Each distribute task of the construction of hostel to different organization,
which has to be decided, made agreement and charged first. But the construction will be
monitored by us.
 Alternative c: The entire hostel will designed, planned and organized by ourselves
2.1 Evaluation of alternatives
BENEFITS LIMITATIONS COSTS RISKS
A Chance to
distribution
of task
within the
projectteam
Payment of
wages to project
team
Intermediate  Diversity of
project
team
 Difference
of opinion
within the
team
B Betterprices
& service for
the client.
 Takes time
to find an
agency
 Usually
high
commission
costs
High  If the
agency
does not
meet the
expectation
 Chance of
not finding
an
accurate
agency

7. C Give us
flexibility
during the
entire
procedure
Requires more
time
Low Overload of work
by over
estimating our
own capabilities
2.2 Choosingthe bestalternatives
We decided not consideralternative B because
 Time consuming
 High risk
 Close monitoring is needed
 Expensive
3. Developmentof concept
3.1 WORK BREAK DOWN STRUCTURE – ALTERNATIVE A.

8. 3.2 WORK BREAK DOWN STRUCTURE – ALTERNATIVE B.
Hostel
1.1 Intiation
1.1.1
Contract
1.1.2 Project Planning
1.1.3
Requirement
Gathering
1.1.1.1 Selection
Of Team
1..1.1.2Hiring Of
Skilled Person
1.2 Project Plan
1.1.3
Allocating
a Project
team
1.1.4 Budgeting
1.1.5 Resource
Allocation
1.3 Design
1.2.1
Interior
Design
1.2.2
Exterior
Design
1.2.3Design
Approval
1.4 Construction
1.4.1
Electrical
1.4.2
Plumbing
1.4.3 Adding more
room in second flo
by using partitions
1.4.4 Install
Kitchen
1.4.5 Install
Sanitary facilities
1.4.6 Lay
floors
1.4.6 Put up Wall
paers
1.4.7 Exter

9. 3.3 SCHEDULE PLANNING
3.3.1 CRITICAL PATH ANALYSIS ALTERNATIVE A:
Hostel
1.1
Intiation
1.1.1
Contract
1.1.2 Project
Planning
1.1.3
Requiremen
t Gathering
1.2 Strategy
1.1.3 Resource
planning
1.1.4 Budget
Planning
1.1.5
Resource
Allocation
1.3 Design
1.2.1
Interior
Design
1.2.2
Exterior
Design
1.2.3Design
Approval
1.4Construction
1.4.1 Electrical
1.4.2 Plumbing
1.4.4 Install
Kitchen
1.4.5 Install Sanitary
facilities
1.4.6 Lay floors
1.4.6 Put up Wall paers
1.4.7 Exterior Painting
1.5 Start -
Up
1.5.1 Test
Installion
1.5.2
Hire
Staff
1.5.3
Move in

10. 3.3.2 CRITICAL PATH ANALYSIS ALTERNATIVE B:
START
A
B D E
F
G J
K
L N O P
MH
I
C

11. 4.1 Cost Estimates for Alternative A:
START
A
B C D
E
F I
J
K M N O
LG
H

12. Project Team
Salary/mont
h Salary/Day
Working
days
Net
salary
for
Work
days
Social
Tax
Total
salary
with
Tax
ProjectManager 800,00 26,67 24 640,08 128.02 768.1
Assitant 400,00 13,33 25 333,25 66.65 399.9
Designer/architect 600,00 20,00 10 200,00 40 240
Total 1173,33 234,67 1408,00
Internal Cost/day
Working
days
Net
costs
Tax
VAT
Total
Cost
Electrical 250,00 10 2500,00 50,00 2550,00
Plumbing 300,00 13 3900,00 60,00 3960,00
Walls 112,00 8 896,00 22,40 918,40
Flooring 83,00 14 1162,00 232,40 1394,40

13. Install roofdrains 200,00 4 800,00 160,00 960,00
Install tile intoilet rooms 50,00 3 150,00 30,00 180,00
Paint walls 40,00 6 240,00 48,00 288,00
Ceiling tile 200,00 5 1000,00 200,00 1200,00
Carpet 85,00 14 1190,00 238,00 1428,00
Install electrical fixtures 150,00 3 450,00 90,00 540,00
Install kitchenfixtures 75,00 3 225,00 45,00 270,00
Install sanitaryfixture 60,00 3 180,00 36,00 216,00
Total 13904.8
Event costs/day tax VAT
total
costs
Transport 250,00 50,00 _
Decorations 40,00 8,00 _
Location 250,00 50,00 _
Pour 200,00 40,00 _
Steel columns 300,00 60,00 _
Beams 85,00 17,00 _
Total Net 1063,33 Gross 1310,29
Alternative A Start Date End Date
Duratio
n in
weeks
1.May.2016
24.July.201
6 12
Total Cost
16623.0
9
4.1.1 COST ESTIMATES FOR ALTERNATIVE B:

14. Project Team
Salary/mont
h Salary/Day
Working
days
Net
salary
for
Work
days
Social
Tax
Total
salary
with
Tax
ProjectManager 800,00 26,67 35 933,45 186,69 1120,14
Assitant 400,00 13,33 40 533,2 106,64 399,9
Designer/architect 600,00 20,00 10 200,00 40,00 240,0
Total 1666,65 333,33 1760,04
Internal Cost/day
Working
days
Net
costs
Tax
VAT
Total
Cost
Electrical 100,00 15 1500,00 300,00 1800,00
Plumbing 110,00 18 1980,00 396,00 2376,00
Walls 60,00 12 720,00 144,00 864,00
Flooring 83,00 14 1162,00 232,40 1394,40
Install roofdrains 200,00 4 800,00 160,00 960,00

15. Install tile intoilet rooms 50,00 3 150,00 30,00 180,00
Paint walls 20,00 10 200,00 40,00 240,00
Ceiling tile 200,00 5 1000,00 200,00 1200,00
Carpet 85,00 14 1190,00 238,00 1428,00
Install electrical fixtures 60,00 5 300,00 60,00 360,00
Install kitchenfixtures 30,00 7 210,00 42,00 252,00
Install sanitaryfixture 15,00 8 120,00 24,00 144,00
Total
11198,4
0
Event costs/day tax VAT
total
costs
Transport 250,00 50,00 _
Decorations 40,00 8,00 _
Location 250,00 50,00 _
Pour 200,00 40,00 _
Steel columns 300,00 60,00 _
Beams 85,00 17,00 _
Total Net 1063,33 Gross 1310,29
Alternative A Start Date End Date
Duratio
n in
weeks
1.May.2016
08.Oct.201
6 22 W 6D
Total Cost
14268,7
3
5. COMPARISON OF PROFITABILITY
Alternative - A 2017 2018 2019 2020
Income without tax
Project development cost excl
VAT
-
16623.1
Cash Flow
-
16623.1 60000 80000 70000 85000
Corporate Tax (15%) 9000 12000 10500 12750
Cash without tax 51 000 68000 59500 72250

16. Total cash flow 34376.9 51376.9 42876.9 55626.9
Discount Factor 10% 0.909 0.826 0.751 0.683
PV 31248.6 42437.3 32200.55 37993.17
NPV 14625.5 25814.2 15577.45 21370.07
Discount Factor 20% 0.83 0.694 0.579 0.482
PV 28532.83 35655.5 24825.72 26812.16
NPV 11909.73 19032.4 8202.6 10189.06
Discount Factor 30% 0.769 0.592 0.455 0.35
PV 26435.8 30415.1 19508.9 25287.5
NPV 9812.7 13792 2885.88 8664.4
IRR = r1 + NPVr1 (r2-r1)
NPVr1 – NPVr2
R1 = 0.1; R2 = 0.2
IRR = 63.8%
Alternative - B 2017 2018 2019 2020
Income without tax
Project development cost excl
VAT
-
14268.7
Cash Flow
-
14268.7 50000 75000 83000 85000
Corporate Tax (15%) 7500 11250 12450 12750
Cash without tax 42 500 63750 70550 72250
Total cash flow 28231.3 49481.3 56281.3 57981.3
Discount Factor 10% 0.909 0.826 0.751 0.683
PV 25662.25 40871.55 42267.25 39601.22
NPV 11393.55 26602.85 27998.5 25332.52
Discount Factor 20% 0.83 0.694 0.579 0.482
PV 23431.9 34340.02 32586.87 27946.98
NPV 9163.2 20071.32 18318.17 13678.28

17. Discount Factor 30% 0.769 0.592 0.455 0.35
PV 21709.8 29292.92 25607.9 20293.45
NPV 7441.16 15024.22 11339.29 6024.75
IRR = r1 + NPVr1 (r2-r1)
NPVr1 – NPVr2
R1 = 0.1; R2 = 0.2
IRR = 61.08%
4.1.2 TASK PLAN
6. Strategic analysis
CriteriaWeight Alternative A
Weighted
Score
Alternative B
Weighted
Score

18. 1. Observance of time
schedule
20% 4 0,8 3 0,6
2. Simultaneous
processing of tasks
15% 4 0,6 2 0,3
3. Level of influence by
stakeholders
10% 2 0,2 4 0,4
4. Provides appropriate 30% 3 0,9 5 1,5
5. Sponsorships 25% 5 1,25 5 1,25
100% 3,75 4,05
7. Risk analysis
SCALE LOW
0-5
MODERATE
6-10
SIGNIFICANT
11-15
HIGH
16-20
Alternative A
Typesofrisks Risks Evaluation Activity

19. economic
1. Delay in funds
2. Wrong budget calculation
3. Underestimation in terms of
required time
4
1. Ongoing information
exchange with sponsors
2. Rechecking event budget
calculation
3. Observance of time
management plan
social
1.Decision-making without
informing Stakeholder
1.5 1. Arrange regular stakeholder
technical
1. Machinery does not work
properly
2
1. Purchase new machinery or
backup machinery
Alternative B
Types of
risks
Risks Evaluation Activity
Economic
1. Working overtime which
leads to increased salaries
2. Delay in funds
3. Wrong budget calculation
4.5
1. Monitoring the work progress
and observance of time
schedule
2. Time to time project progress
update with stakeholders
3. Rechecking budget calculation
Social
1. Internal diversity within
project team
2. Project Manager could
take autonomous
decisions
3
1. Conducting regular team
meetings
2. Manager update project
knowledge with other team
members
technical 1. Inflation 2
1. Reserve extra material to
handle this risk
7.1 Conclusion about selecting best alternative
Alternatives economic social Technical sum
A 4 1.5 2 7.5

20. В 4.5 3 2 9.5
ProjectDescription:
During the renovation of the building we can expect to accumulate many documents ranging
from floor plans to inspirational photographs, product catalogs and design ideas. The Home
Building Organizer is a flexible 3-ring binder that includes detailed budget worksheets,
product ideas and organizational tools to assist in managing your entire home building
process. This binder will prove to be invaluable in helping you stay organized. It also makes
a great scrapbook.
When deciding on the design of hostel, we need to take note of the rooms and features the
client included. Having all single occupancy rooms on the second floor also gives privacy
and all double occupancy rooms on first gives easy accessibility. Consider all single
occupancy rooms on first floor which gives more flexibility and greater view of the city from
balcony.
First Floor: 35000 Sq.Ft
No rooms: 6 double rooms
Second floor:
No rooms: 8 single rooms
The scope of this Project includes: • developing the construction plans, the grading plans and the
landscape plans acquiring all required permits and approvals installation of the water well and a
water system including a pump and all required piping installation of a properly designed and the
garage with a parking area adequate for at least 6 average sized vehicles the parking area.
Title
Construction of a Hostel
Alternative A
Main Problem:
There are numerous important challenges facing today's
construction industry. Some of the construction issues include
workforce considerations, safety, time constraints, and the changing
nature of the work. Non-construction challenges that construction
industry faces that are part of the business landscape include legal
issues, government regulations, environmental concerns, and socio-
political pressures. Also in addition to these challenges, the
construction industry is highly competitive, and firms must

21. continually improve their productivity to remain competitive. The
identification of material, identifying materials moving flow in
logistics and tracking materials location are needed for successful
project management in construction.
•A positive image of the construction industry as a career choice.
•The transfer of skills from other sectors, such as agriculture, fishing,
aquaculture and forestry, to the construction industry.
•Local employers able to effectively compete for the large scale
construction contracts.
Realization
In order to bring them together and to get to know each other it seems obvious to
organize a special event for it. The fact that will not have many contacts in the
beginning of construction will make it all the more important to get business use
social media and online sites for marketing the hostel. The successful completion
of this project depends upon the following external processes: The contracted
Home Builders must complete construction of the hostel no later than the date to
which they have agreed with the client.
Project duration(12 weeks, registration period excluded):
Starting:01.05.2016
Ending:24.07.2016
Project budget(€):
20000.00 €
Total Costs:
16623.09 €
Conclusion:
In the years ahead, the construction industry must has to overcome different
challenges with respect to building environment, transportation, power or
natural hazards. The Construction industry is comprised of clients,
designers and contractors. But in the modern industrialized world,
construction usually involves the translation of designs into reality. A formal
design team may be assembled to plan the physical proceedings, and to
integrate those proceedings with the other parts. The outstanding
performance underdemanding situations in the past will stand in good stead
and give confidence to the construction industry to bring about an overall
development in the infrastructure of the nation. The gains of large
investments in the mega-projects eventually will feedback to the

22. constructionindustry itself in the form of bettereconomy and improved work
conditions.
As efficiencycodes have come into effectin recent years, new construction
technologies and methods have emerged. New techniques of building
construction are being researched, made possible by advances in 3D
printing technology. In a form of additive building construction, similar to
the additive manufacturing techniques for manufactured parts, building
printing is making it possible to flexiblyconstructsmall commercialbuildings
and private habitations in around 20 hours, with built-in plumbing and
electrical facilities, in one continuous build, using large 3D printers.
In the current trend of sustainable construction, the recent movements
of New Urbanism and New Classical Architecture promote a sustainable
approach towards construction, that appreciates and develops smart
growth, architectural tradition and classical design.