Automatic Fire Suppression System installations - traditional building conversion to hotels: cost benefit analysis

Executive Summary

Introduction

1. Recommendation Four of the Fatal Accident Inquiry (FAI) into the deaths of two people at Cameron House Hotel in 2017 stated:

“The Scottish Government should consider introducing for future conversions of historic buildings to be used as hotel accommodation a requirement to have active fire suppression systems installed.”

2. The aim of this report is to provide evidence to assist the Building and Fire Safety Expert Group to arrive at a consensus view on whether to mandate a requirement to install Automatic Fire Suppression Systems (AFSS) when traditional buildings are being converted to hotels. The specific objective is to undertake a cost benefit analysis for the provision of AFSS to be installed when a traditional building is being converted to a hotel.

Definition of Traditional Buildings

3. The FAI recommendation referred to ‘historic buildings’. This is not a term defined in relevant legislation. Accordingly, the Scottish Government has directed that the assessment be based on the term ‘traditional building’ which is defined in the building standards technical handbooks as:

“A building or part of a building of a type constructed before or around 1919:

a. Using construction techniques that were commonly in use before 1919 and

b. With permeable components, in a way that promotes the dissipation of moisture from the building fabric.”

Hotel Fires and their Characteristics

4. Over the period from 2013/14 to 2023/24, there have been 777 hotel/motel fires with six fatalities and 30 casualties. The majority (63%) of the casualties received first aid at the scene. Of the 777 hotel/motel fires, 478 were in traditional buildings. All six of the fatalities and 22 of the 30 casualties were in hotels/motels that were traditional buildings.

5. Taking account of the stock of hotels in traditional and non-traditional buildings, the probability of a fire occurring in a traditional building is slightly lower than in a non-traditional building. However if there is a fire, the probability of being killed or injured in a fire in a traditional building is higher than for a non-traditional building.

Cost Benefit Framework

6. The analysis compared the existing situation with the provision of AFSS when converting traditional buildings to hotels. The analysis sought to quantify in monetary terms as many of the costs and benefits of each option as possible.

7. Cost information was obtained from consultations with four major companies who install AFSS. Data were provided on the cost of installation, water supply costs and annual maintenance/on-going costs. A number of points were made during the consultations in relation to installing AFSS including:

• The complexity of the installation due to building layout or the need to preserve parts of the building which adds to time and labour costs.
• The space required for pump and tank rooms can be substantial and can affect the viability of installing a system.
• Other factors in traditional buildings can impact on the cost e.g. the need for frost protection if loft areas are not heated.

8. The benefits associated with installing AFSS are essentially ‘avoided costs’ and were considered under the following headings:

• Injury and fatality costs.
• Property damage costs.
• Fire response costs.
• Environmental costs.
• Other costs e.g. insurance costs.

9. The costs associated with the installation and maintenance of an AFSS will fall on the owner/developer of the hotel while the benefits will be felt by both the owner/developer (property damage benefits) and society as a whole (reduced fatalities and injuries, fire response costs).

Cost Benefit Results

10. To reflect potential variations in size of conversions of traditional buildings into hotels, three example projects were developed:

• A small 10 room hotel which can install a system under the residential standard (BS 9251).
• A small 20 room hotel with a commercial system installed under BS 12845.
• A larger 40 room hotel with a commercial system installed under BS 12845.

11. For each of the example projects the costs and benefits were assessed in present value terms and the benefit cost ratio (BCR) calculated. The results are shown for hotels in traditional buildings and non-traditional buildings in Table 1.

12. For traditional buildings, the benefits outweigh the costs if the AFSS is installed to BS 9521. When the system is installed to BS 12845, the costs significantly outweigh the benefits. Similar results emerge for non-traditional buildings, but the BCR is not so adverse for projects where BS 12845 is adopted. This reflects the higher areas of property damage in non-traditional hotels which increases the property damage benefit.

Sensitivity Analysis

13. Two sensitivity tests have been considered for traditional buildings. The first adopts lower installation costs and the second assumes that the water supply can be mains fed, rather than installing a pump and tank system. The results are shown in Table 2.

14. Table 2 shows that the overall results are not particularly sensitive to the lower installation costs (sensitivity 1). However, the results change considerably when the costs of a pump and tank system are excluded from the calculation with a 20 room hotel returning a BCR of 1.3 and a 40 room hotel having a BCR close to one.