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

4. Previous Research

4.1 Introduction

4.1.1 This section provides a brief review of previous cost benefit studies and other reports relevant to the current research to establish if there is any information which might be helpful to the current analysis.

4.2 Cost Benefit Studies

4.2.1 Several studies^[6] have examined the costs and benefits of installing AFSS systems in domestic and residential buildings, but the focus of the studies has tended to be houses, flats, care homes and houses of multiple occupation (HMOs).

4.2.2 The main conclusion from these studies which are relevant to the current research include:

• The studies are consistent in the costs and benefits to be measured. The costs include installation costs, water supply costs and maintenance costs. The benefits are the prevention of deaths, injuries and a reduction in property damage.
• All studies adopt DfT estimates of the value of a fatal and non-fatal casualty.
• Most of the analysis has been undertaken on new build properties rather than conversions of existing buildings.
• The analysis tended to find that the benefit cost ratio was lower if pump and tank water systems were required and that the retro fitting of systems tended to be more expensive than when systems were fitted in new buildings.

4.2.3 We are not aware of any research specifically related to hotels.

4.3 Other Research – The Cost of Fire

4.3.1 There has been recent research by the Home Office^[7] which estimates the total annual economic and social cost of fire in England using data on fires for the year ending March 2020. The report identifies three main areas of costs:

• Anticipation costs: measures designed to either prevent fires from occurring or protective measures to mitigate the damage and impact of fires.
• Consequence costs: direct and indirect costs that occur as a result of fire such as property damage, loss of business, human injury and fatalities.
• Response costs: cost of fire and rescue services responding to incidents.

4.3.2 The total economic and social cost was estimated to be £12 billion for the year to March 2020 with anticipation and consequence costs accounting for £8.8 billion (73%) and £3.2 billion (27%) respectively. Response costs were relatively modest at £74 million (0.6%).

4.3.3 The report also identifies the marginal unit cost of fires which can be defined as the change in total economic and social cost from one additional fire occurring. The marginal cost excludes anticipation costs and is considered the better figure for estimating the economic benefits that would arise from a reduction in the number of fires. The marginal unit cost of all fires attended is estimated to be £20,900 and the marginal unit cost for primary fires is £45,900.

4.3.4 The primary fires category includes dwellings, other buildings, road vehicles and other outdoor fires with Table 4.1 showing substantial variation across these different fire types. Within primary fires, the marginal unit cost of ‘other’ building fires is almost £124,000, comprising £122,500 consequence costs and £1,600 response costs.

Sources: Home Office (2023) ‘The Economic and Social Cost of Fire’ Table M7, Annex Data Tables

Note: All costs have been rounded

4.3.5 For this research, it is the consequence and response costs which are most relevant. A more detailed breakdown of the marginal unit consequence cost for other buildings and all primary fires is shown in Table 4.2. The largest component of costs for both other buildings and all primary fires is property damage.

Sources: Home Office (2023) ‘The Economic and Social Cost of Fire’ Tables A17 and A23, Annex Data Tables

Notes: All costs have been rounded.

4.3.6 The report also provides information on the costs for fire and rescue services of responding to incidents. The unit cost for attending other building fires is estimated to be £1,640 and £860^[8] for all primary fires.

4.3.7 While this report presents a significant amount of information, it does not provide a more detailed analysis of building types e.g. hotels.

4.3.8 The costs and benefits are analysed for Scotland as a whole. Further analysis of the benefits of installing AFSS is contained in Section 5 with costs being considered in Section 6.

4.4 The Effectiveness of Sprinklers

4.4.1 The analysis requires assumptions about the effectiveness of sprinklers in reducing deaths, injuries and damage. A summary of assumptions used in previous cost benefit studies is shown in Table 4.3.

4.4.2 A report on the effectiveness of sprinklers by Optimal Economics^[9] on behalf of the National Fire Chiefs Council and the National Fire Sprinkler Network found that sprinklers are highly effective and reliable. They work as intended in 94% of cases and control or extinguish fires in 99% of cases.

4.4.3 More detailed analysis of the ‘other residential’ sector (including hotels/motels) in the Optimal Economics report found that there were 118 fires with sprinkler systems between 2011 and 2016 and that the sprinkler systems operated in 42 cases. The impact of the sprinkler system on the fire is known for 35 of these 42 fires and in all 35 cases, the system contained/controlled or extinguished the fire. Hence, the performance effectiveness of the system in containing/controlling or extinguishing the fire was 100% for the 35 fires where the impact was known.

4.4.4 Following the Optimal Economics research, supplementary analysis^[10] was undertaken to assess the impact of sprinklers on fire fatalities and injuries. Covering all primary fires between 2013 and 2018, the analysis concluded:

• There was not a single incidence of a fire fatality in buildings other than dwellings where sprinklers were installed.
• Whether in a dwelling or other type of building, if sprinklers are fitted you are half as likely to be harmed by a fire.