Q&A: Ben Johanneman, McCarthy Building Cos.

HOUSTON—With Houston set to host the Super Bowl in 2017, the city is already immersed in preparations. Ben Johanneman, vice president of operations for McCarthy Building Cos. Houston office, recently spoke with GlobeSt.com's Anna Caplan about how his firm is anticipating the event.

GlobeSt.com: Describe the state of the hospitality market right now in Houston.

Ben Johanneman: According to ConstructionGlobal.com, nationwide hotel occupancy levels are close to all-time highs. In order to meet the rising demand, many hoteliers are expanding their existing hotels or constructing new ones. For a city with steady growth and a bright future, Houston is currently lacking in the number of hotel rooms available to accommodate visitors. In fact, Houston has a supply of only about half as many rooms compared to Atlanta, a city that is approximately five times smaller than Houston.

GlobeSt.com: What are some major changes that the city has had to make to prepare for the event?

Ben Johanneman: The city's hospitality market is on the rise with 7,000 rooms under way and 10,666 more in the pipeline to meet the growing demand in anticipation of the big game, along with the need to boost its competitive advantage for hosting large conventions in the future. For contractors and architects, the increased demand has pushed the hospitality construction market into the spotlight, giving them the opportunity to showcase quality craftsmanship, innovative building products and design features.

Owners are eager to complete projects in time for the Super Bowl, which can put extra pressure on contractors and architects to speed up the building and design process. Ramped-up demand has challenged building and design teams to look for new ways to increase efficiency while still producing a quality product.

GlobeSt.com: Does this have a trickle-down effect in terms of other sectors?

Ben Johanneman: As the city continues to grow, city planners have incorporated more green space by turning parking lots into parks and trails. This planning affects the demand for subcontractors, commercial suppliers/materials, stadium work force and additional planning. There will also be a rapidly growing need to ensure the appropriate infrastructure is in place to keep up with not only the growing population but also the influx of visitors to the city. The increased tourist visitation impacts all aspects of infrastructure including making road improvements to relieve congested roadways and mass transit expansions, in addition to increasing water supplies and waste water systems to meet the growing needs within the city. 

GlobeSt.com: How is McCarthy adapting to the current climate, in terms of the cycle the city is in right now (oil prices etc.)?

Ben Johanneman: While problems such as access and availability of skilled labor, labor shortages and material price escalation have been apparent within the past few years, we are hopeful that things will begin to progress within the next couple of months.

McCarthy is not focused on the office building market, since it has slowed quite a bit.  We are focused on our core markets of health care, the arts, technology, industrial, civil and hospitality. In fact, McCarthy is currently working with global design firm, Gensler, on two hospitality projects for Hyatt Hotels Corp.—Hyatt Place and Hyatt Regency, which stand adjacent to each other near the Houston Galleria.

The Hyatt Place will be a 12-story, 151-room hotel spanning 103,000 square feet. In order to stay on time and on budget, McCarthy is utilizing a new specially engineered, prefabricated structural steel framing system from SCBStructures that increases efficiency, is safer and cost-effective. The lightweight system is put together somewhat like an erector set, making it easy to install, but still providing a quality structure. By using the SCBStructures system contractors can reduce costs for owners without sacrificing quality. The key is planning in order to meet an owner's expectations of completion under a fast construction timeline. The 325-room, 14-story Hyatt Regency luxury hotel totals 260,000 square feet and will serve as the second Hyatt Regency in Houston, sitting roughly 7.5 miles from its counterpart, also located downtown. Because the Hyatt Regency is a higher-end, luxury hotel, creative and meticulous attention to detail has gone into the design and overall construction of this project.

GlobeSt.com:What will be the after-effects on the hospitality market in the city post-event?

Ben Johanneman: The millennial generation has already started to influence the construction and design of hotels in the city. This generation values sustainability and health and wellness and this trend is currently impacting owners' choices when building and designing hotels. Not only do millennials want to see local produce on hotel restaurant menus and snacks and drinks from local mom-and-pop shops stocked in their minibars, they also realize the importance of companies using local building materials in the overall design and construction to create a truly sustainable environment. And, the renewed focus on health and wellness from this generation has also impacted the build-out in today's hotel environments. The ability to access a fitness center while traveling is important to millennials. In fact, the Hyatt Regency's fitness center will be significantly larger than the typical hotel gym to reflect the high demand for a quality fitness studio. Even the overall design of the Hyatt Regency's restaurant space has changed as a result of the millennial generation—it has shifted from sit-down restaurants to grab and go marketplaces offering healthier options. The Super Bowl has sped up the timeline to bring more quality, hospitality product to market as owners race to meet the needs and desires of the millennial generation. And, we predict this trend of catering to millennials will continue post-event as Houston continues to grow as a city, competing for hosting large conventions and other large-scale events in the future.