Navigating inflation for the Belmond Group in Sicily

We were appointed in 2022 to oversee the redevelopment of Sicily’s prestigious Grand Hotel Timeo, Taormina, a Belmond Hotel and part of the luxury group LVMH.

This ambitious renovation is updating the hotel’s facilities, bedrooms, public areas, and essential systems to contemporary luxury and energy efficiency standards. Our Italian team is managing the project, ensuring seamless coordination of cost, construction, and project management on this 150-year-old Italian neoclassical property.

With construction scheduled to begin in December 2024, this complex project is expected to be completed by 2028.

Grand Hotel Timeo

Next to one of Sicily’s most impressive ancient Grecian Theatres, the Grand Hotel Timeo began as a private villa in the 19th century. Transformed into a hotel in 1873, it quickly became a popular destination for European aristocrats and intellectuals. Under the ownership of the Belmond brand, thoughtful enhancements are being made to elevate the guest experience and its high-quality amenities.

The renovation will set new standards for luxury hospitality in Taormina, providing guests with unparalleled experiences and significantly benefitting the local economy.

Navigating Inflationary Pressures

Throughout the initial planning, design, and procurement phases of the Grand Hotel Timeo redevelopment, the project faced significant inflationary pressures. These impacted material costs and labour rates, posing risks to our client’s budget and project timelines.

Planning: With our experience of managing complex hotel refurbishment projects in Sicily, we developed a robust masterplan that anticipates and manages risks, monitoring shifts in material and contractor costs effectively.

Construction, which begins in December 2024, will be carried out in winter phases over four years, to 2028. This will ensure hotel operations continue without interruption, safeguarding client revenue and guest satisfaction. We will meticulously manage transitions and risks to adhere to the schedule, pre-empting potential challenges.

Design: During the early design phase, we cut lead times by collaborating closely with the design teams to identify locally sourced materials. Using local suppliers also enabled us to remove import taxes and reduce exposure to volatile exchange rates.

Regular strategic meetings with our suppliers ensured they adhered to our budget and quality standards, maintaining strict control over project costs.

Procurement: Our deep understanding of procurement has also enabled us to carefully choose contractors based on their financial stability and track records, ensuring we only partner with firms who met our high standards for client service.
By strategically aligning the initial contractor-tender and design stages, we have safeguarded the client's budget and maintained quality standards. This method also allowed our contractors to start essential strip-out and structural works earlier, allowing extra time to refine the design.

Matteo Mantovani, Managing Director, Currie Brown Italy said: “We're excited to be able to contribute to such an exciting project for the region and are looking forward to using our expertise in strategic project management and, financial solutions, to steer the project to a successful completion.”