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Hotel Construction Cost Estimation Services
Leading provider of hotel construction cost estimating.
The travel and hotel industries continue to thrive, making them attractive investment opportunities. Building a hotel can be a smart financial decision, especially as the travel and tourism sector grows steadily. Hotels vary widely in size and style, from simple motels and boutique inns to extravagant 5-star mega-resorts. Because of this diversity, hotel construction costs can vary significantly. The national average cost range for building a hotel is now between $15,600,000 and $38,400,000, with most developers spending approximately $26,520,000 to construct a 3-star hotel with 100 rooms. At the lower end, a modest 2-story motel can cost around $9,000,000. On the higher end, constructing a luxury 5-star hotel can exceed $72,000,000, depending on its features and location.
Cost to Build a Hotel
Building a Hotel Costs | Updated Figures |
National average cost | $26,520,000 |
Average range | $15,600,000 – $38,400,000 |
Low-end | $9,000,000 |
High-end | $72,000,000 |
Hotel Construction Cost per Square Foot
The cost of building a hotel can vary significantly, depending on the type of hotel, its location, and the materials and amenities included. Urban hotels are generally more expensive to construct than those in rural or suburban areas due to higher land costs, labor rates, and material transportation. The cost per square foot for hotel construction now ranges from $160 to $660:
Hotel Type | Cost per Sq.Ft. (Rural Area) | Cost per Sq.Ft. (Urban Area) |
Motel | $160 – $204 | $216 – $280 |
3-Star | $228 – $294 | $300 – $450 |
4-Star | $312 – $414 | $420 – $492 |
5-Star | $398 – $480 | $480 – $660 |
Build a Motel per Square Foot
Building a motel typically costs between $160 and $280 per square foot, depending on the location and state. Motels are generally more affordable to construct than larger hotels because they are simpler in design and layout. Most motels are 2–3 stories tall, with limited amenities and common areas, which keeps costs down. Their rooms are designed for affordability, making them a great option for road travelers or those seeking basic accommodations without added luxury.
Build a 3-Star Hotel per Square Foot
Constructing a 3-star hotel comes with costs ranging from $228 to $450 per square foot, based on the area. These are standard hotels with functional yet comfortable designs. They usually feature a lobby, communal areas, and at least one restaurant. Some 3-star hotels may also include a gym or pool, although these features are not guaranteed. Materials used in these hotels are typically mid-grade, and the overall focus is on balancing quality and cost-effectiveness. This makes 3-star hotels a popular choice for business travelers and families.
Build a 4-Star Hotel per Square Foot
A 4-star hotel typically costs between $312 and $492 per square foot to construct, depending on its location. These hotels are a step up in luxury compared to 3-star establishments, offering additional amenities and higher-quality materials. Common features include gyms, entertainment areas, spas, multiple restaurants, and shopping options. The design and materials focus on creating an upscale experience, which justifies the higher costs. These hotels often appeal to tourists and business travelers looking for a premium stay.
Build a 5-Star Hotel per Square Foot
Building a 5-star hotel is a significant investment, with costs ranging from $398 to $660 per square foot, depending on the area. These luxury hotels are designed to offer world-class amenities and unparalleled guest experiences. Features often include state-of-the-art gyms, high-end spas, designer pools, multiple fine-dining restaurants, and expansive communal areas. Additional services, such as concierge desks, exclusive shopping, and personalized guest services, also add to the construction costs. High-quality materials and meticulous attention to detail are hallmarks of 5-star hotels, making them some of the most expensive and prestigious buildings to construct.
Hotel Construction Cost per Room
Calculating hotel construction costs per room is a straightforward way to estimate the total cost of a project, particularly when focusing on the number of rooms rather than the overall size of the building. The cost per room varies based on the hotel type, location, and included amenities. Here’s a breakdown of the costs for different types of hotels:
Costs of Building a Motel per Room
The cost to build a motel per room averages around $90,000. Motels are more budget-friendly because they typically lack extensive amenities and shared indoor spaces. Guests access their rooms directly from the outside, which reduces construction complexity and costs. This simplicity makes motels a cost-effective choice, especially for locations targeting travelers seeking basic accommodations. Even with the same number of rooms as a hotel, motels cost significantly less to build because they focus on functionality over luxury.
Costs of Building a 3-Star Hotel per Room
The average cost to construct a 3-star hotel per room is about $265,200. These hotels offer a standard level of comfort and quality, often including optional amenities such as fitness centers, on-site dining, and small meeting rooms. While not overly luxurious, they are designed to meet the needs of both business and leisure travelers. The construction cost is influenced by the location, materials, and optional features, such as restaurants or pools. This type of hotel strikes a balance between quality and affordability.
Costs of Building a 4-Star Hotel per Room
The cost to build a 4-star hotel per room averages around $381,840. These hotels elevate the guest experience with more upscale amenities, such as fine dining restaurants, spas, larger pools, and well-designed communal spaces. High-quality materials and finishes are standard, contributing to the increased construction cost. Features that are optional in 3-star hotels—like gyms or lounges—become standard in 4-star establishments, making them a preferred choice for guests seeking a premium experience.
Costs of Building a 5-Star Hotel per Room
The average cost to build a 5-star hotel per room is approximately $724,800. These luxury hotels are designed to provide an exceptional experience, with larger rooms, world-class amenities, and superior services. Features include multiple fine dining restaurants, expansive spas, state-of-the-art fitness centers, and concierge services. The use of top-tier materials, customized designs, and advanced technologies further increases the cost. Five-star hotels also tend to have fewer rooms within the same square footage compared to lower-star hotels, emphasizing spaciousness and exclusivity for their guests.
2025 Notice: The Pandemic's Impact on the Hotel Construction Industry
The pandemic, which began in 2023, has left lasting effects on the construction industry, including hotel construction. Initially, a surge in home improvement projects led to a lumber shortage, but this quickly expanded into broader issues like worker shortages and disrupted supply chains. By 2022, construction costs had risen by over 4%, and projections suggest further increases of 5% to 8% in 2025 due to ongoing challenges.
During the height of the pandemic, many builders and contractors faced significant delays in their commercial projects. These delays were compounded by the rising and unpredictable costs of essential materials like steel, concrete, flat glass, and lumber—all critical to hotel construction. As these materials continue to experience price volatility, the likelihood of further cost increases and project delays in 2025 remains high.
For builders planning to start hotel projects, it’s wise to act sooner rather than later. Locking in costs now can help mitigate the effects of future price hikes and supply chain disruptions. Starting early also allows builders to address potential delays caused by ongoing worker shortages and material availability issues, ensuring smoother progress in the months ahead.
Specialty Hotel Construction Costs
In addition to traditional motels and hotels, many hotels cater to niche markets or serve specific purposes. Some fall under the luxury category of 5-star hotels, while others target unique needs. Here’s a breakdown of the average construction costs for specialty hotel types:
Hotel Type | Updated Cost per Sq. Ft. |
Guest House | $120 – $600 |
Boutique Hotel | $230 – $660 |
Casino | $360 – $660 |
Resort | $360 – $660 |
Average Price to Build a Guest House
Guest houses are increasingly popular due to the rise of short-term rentals like Airbnb and the need for private accommodations. The cost to build a guest house now starts at $120 per square foot for a simple backyard structure and can go up to $600 per square foot for a high-end, luxury guest house designed for multiple guests. These buildings can range from cozy accommodations for family and friends to boutique-style inns offering unique amenities. The cost depends on the size, design, and features, such as premium finishes, kitchens, and private entrances.
Cost to Build a Boutique Hotel
Boutique hotels are designed to offer unique, personalized experiences and tend to be smaller than traditional hotels. With updated costs, building a boutique hotel ranges from $230 to $660 per square foot, influenced by the location, design complexity, and included features. These hotels often attract guests with specific themes, luxury accommodations, or one-of-a-kind services, such as pet-friendly amenities, exclusive spa treatments, or gourmet dining. Boutique hotels are ideal for travelers seeking something special and distinct from chain hotels.
Cost to Build a Casino
Building a casino involves significant investment due to its luxurious nature and focus on entertainment. Updated construction costs range from $360 to $660 per square foot, depending on the location and the level of amenities provided. Casinos are often integrated into resorts or luxury hotels, aiming to provide guests with an all-encompassing experience that encourages spending. High-end features such as expansive gaming floors, lavish hotel suites, world-class dining, live entertainment, and pools are common in these establishments, adding to the overall cost.
Cost to Build a Resort
Resorts are designed as destination accommodations, offering both relaxation and recreation. The cost to build a resort now ranges between $360 and $660 per square foot, reflecting the inclusion of premium amenities. Resorts often feature expansive grounds, luxury rooms, multiple restaurants, pools, spas, golf courses, and other recreational facilities. They are typically classified as luxury or boutique hotels, often carrying 5-star ratings. The overall cost depends on the resort’s size, location, and the variety of services offered, making it a significant but worthwhile investment for attracting high-end guests.
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Hotel Construction Cost Breakdown
Every hotel project is unique, varying by size, number of rooms, location, land, and materials used. While exact costs can differ, the project expenses can generally be categorized into percentages and categories. These estimates will help you understand how your budget is allocated across various aspects of the construction process:
Cost Breakdown
Category | Percent of Total Project Cost |
Opening Expenses | 3.6% |
Furniture, Fixtures, and Equipment (FF&E) | 10.8% |
Land | 12% – 25.2% |
Soft Costs (Non-Construction Fees) | 14.4% |
Hard Costs (Construction and Materials) | 66% – 79.2% |
Land
The cost of land is a significant portion of your budget. It includes the purchase price and any preparatory work, such as clearing, leveling, or demolishing existing structures. This category can also include rezoning or environmental assessments if required. Land costs typically account for 12% to 25.2% of the total project budget, depending on location, property size, and market conditions.
Hard Costs
Hard costs cover all construction-related expenses, including labor and materials. These expenses include everything from foundation work, concrete, and steel to drywall, roofing, and finish materials like flooring. Hard costs also apply to refurbishing or repurposing existing structures. Because this category encompasses such a broad range of items and services, it constitutes 66% to 79.2% of the total project cost.
Soft Costs
Soft costs are fees not directly tied to construction but still essential for the project. These include architectural and engineering services, permits, taxes, insurance, and ongoing maintenance during construction. They also cover legal expenses, administrative fees, and consultants like project managers or inspectors. Soft costs typically average 14.4% of the total budget.
Furniture, Fixtures, and Equipment (FF&E)
A hotel isn’t functional without proper furnishings and equipment. This category includes beds, tables, lighting, kitchen appliances, and even smaller items like linens and towels. It may also cover decorative elements, reception desks, and technology systems for guest management and security. FF&E typically represents 10.8% of the overall budget.
Opening Expenses
Once construction is complete, opening expenses ensure your hotel is operational. These costs include marketing, hiring staff, training, inventory, initial supplies, and setting up utilities and software systems. This category is often overlooked but is vital for a smooth launch. Opening expenses account for approximately 3.6% of the total project budget.
Labor Costs
Every hotel project is unique, varying by size, number of rooms, location, land, and materials used. While exact costs can differ, the project expenses can generally be categorized into percentages and categories. These estimates will help you understand how your budget is allocated across various aspects of the construction process:
Hotel Room Size Requirements
When it comes to hotel room sizes, there are no strict regulations except for accessibility standards. In the U.S., a standard hotel room averages about 330 square feet, providing enough space for a bed, a bathroom, and some additional furnishings. However, room sizes can vary widely. Luxury suites can exceed 1,200 square feet, offering high-end amenities, while trendy micro-hotels may feature rooms as small as 150 square feet, catering to budget-conscious travelers or those looking for minimalist spaces.
For ADA-accessible rooms, specific guidelines apply to ensure comfort and mobility for guests with disabilities. Hallways and doorways inside the room must be at least 32 inches wide, while doorways leading into the room need to be 36 inches wide.
Additionally, there must be at least 30 inches of clearance around the bed and a turning radius of 60 inches in bathrooms and other tight spaces. Beyond these accessibility standards, there are no fixed rules regarding the size or layout of hotel rooms, allowing for flexibility based on the type and style of the hotel.
How Much Does It Cost to Build a Marriott Hotel?
Marriott hotels are part of a well-established franchise with specific costs and requirements for new owners. The average cost to open a Marriott hotel ranges from $8.4 million to $12 million, including the franchise setup. This estimate includes an initial franchise fee of $720,000 or $600 per room, whichever is higher. Additional costs for construction, interior design, and setup depend on the hotel’s location, size, and level of luxury.
Building a Marriott requires careful planning and a significant upfront investment, as these hotels are designed to maintain a consistent level of quality across all franchises. The cost can increase if the hotel includes extra amenities like pools, restaurants, spas, or conference facilities. However, the investment often pays off due to Marriott’s strong global brand recognition and established customer base.
Cost to Run a Hotel
Running a hotel involves multiple expenses that vary based on the hotel’s size, services, and star rating. A 5-star luxury hotel will cost significantly more to operate than a 3-star budget hotel, given the higher standards for amenities, staffing, and guest services.
Here’s a breakdown of the typical percentages of total revenue per occupied room that go into operational costs for a standard hotel:
- Rooms payroll: 22.67% – Includes salaries and wages for housekeeping, maintenance, and front desk staff.
- Rooms expenses: 18.6% – Covers cleaning supplies, linens, and general upkeep.
- Overhead payroll: 12.22% – Includes management salaries and administrative staff wages.
- Overhead expenses: 15.88% – Encompasses administrative costs, marketing, and other fixed expenses.
- Energy costs: 6.73% – Electricity, water, and heating or cooling expenses, which can vary by location and season.
- Owner expenses: 34.13% – Reflects costs like taxes, insurance, and financing.
- Cash flow: 9.78% – Represents the profit or reinvestment funds left after all operating expenses.
How Long Does it Take to Build a Hotel?
Building a hotel is a large-scale project that requires careful planning and execution. From the initial design phase to the final touches before opening, most hotels take about 3 to 3½ years to complete if using traditional construction methods. However, if you opt for modular construction, the timeline can be 20% to 30% faster, potentially saving 6 to 9 months. Modular builds are becoming more popular for their efficiency and cost-effectiveness, especially for projects needing faster completion.
How Long Does it Take to Build a Hotel?
Building a hotel is a large-scale project that requires careful planning and execution. From the initial design phase to the final touches before opening, most hotels take about 3 to 3½ years to complete if using traditional construction methods. However, if you opt for modular construction, the timeline can be 20% to 30% faster, potentially saving 6 to 9 months. Modular builds are becoming more popular for their efficiency and cost-effectiveness, especially for projects needing faster completion.
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Enhancements and Improvement Costs
Building a Restaurant
Restaurants are a key feature in many hotels, especially those rated 4 or 5 stars, and some high-end 3-star hotels. Adding a restaurant significantly increases costs, as these spaces are designed to meet specific culinary and aesthetic needs. The cost to build a restaurant in a hotel ranges from $180 to $900 per square foot, depending on the level of quality and customization. Upscale restaurants with luxury finishes or unique themes will naturally be on the higher end of this spectrum. These spaces not only enhance guest experiences but also act as additional revenue streams for the hotel.
Adding a Car Service
Car services are a popular amenity for high-end and business-focused hotels. These services include airport transfers and local transport within a designated radius. Adding a car service to your hotel starts at $60,000 and can increase significantly depending on the type and number of vehicles you include. Luxury cars or services tailored to executive guests will cost even more. For many hotels, this feature is a way to provide added convenience and attract guests looking for a seamless travel experience.
Installing a Spa
Spas are a hallmark of luxury for 4 and 5-star hotels and are often incorporated into the initial design and budget. For hotels without a spa, adding one can be a significant investment. A basic spa installation costs around $600,000, and high-end facilities with custom treatment rooms, saunas, and luxury finishes can cost even more. Before adding a spa, it’s wise to conduct market research to ensure it aligns with your target audience and provides a good return on investment. Spas not only enhance guest satisfaction but can also become a key selling point for your hotel.
Additional Considerations and Costs
Comfort
While a hotel’s appearance is important, comfort is even more critical. Guests prioritize warmth, convenience, and a homey atmosphere, particularly when staying at boutique hotels. Investing in high-quality furnishings, soundproofing, and comfortable room layouts can enhance the guest experience and lead to repeat bookings.
Location
The location of your hotel can make or break its success. Not only does it impact the cost of construction, but it also determines your market appeal. Choose a location with limited competition, proximity to attractions, and accessibility to maximize your chances of success. Be mindful that high-demand locations may increase construction costs but can also lead to higher revenue.
External Factors
External factors, such as travel trends, consumer spending habits, and international tourism, can significantly influence your hotel’s performance. Staying adaptable to changing market demands is essential for long-term success. Consider trends in domestic travel, consumer confidence, and local events when planning your hotel’s features and amenities.
Renovation Opportunities
If building a hotel from the ground up seems daunting, purchasing and renovating an existing hotel is another option. Renovations can be more cost-effective, especially for franchise hotels that already have branding and systems in place. Renovation costs vary widely depending on the condition of the property and the level of upgrades required. Consulting with experienced hotel builders or architects can help you better understand these costs and decide if renovation aligns with your goals.
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Conclusion
Hotel construction cost estimation is a critical step in planning a successful project, whether you’re building a budget-friendly motel or a luxurious 5-star resort. With costs influenced by factors such as location, design, and amenities, understanding the financial requirements ensures better decision-making and profitability. From per-room and per-square-foot breakdowns to specialty features like restaurants and spas, accurate estimates align your vision with market trends and guest expectations. By leveraging expert estimation services, developers can navigate rising material prices, labor costs, and supply chain challenges to complete projects efficiently. Proper planning secures long-term success in the thriving hospitality industry.
Question Answer
Frequently Asked Question
The national average cost to build a hotel is approximately $26,520,000. The cost typically ranges between $15,600,000 and $38,400,000, depending on the type and size of the hotel. Lower-end motels may cost around $9,000,000, while high-end luxury 5-star hotels can exceed $72,000,000.
Hotel construction costs range from $160 to $660 per square foot. Motels are on the lower end, while 5-star luxury hotels can cost up to $660 per square foot. Urban locations generally have higher costs compared to rural areas.
Building a motel costs about $90,000 per room. Motels are typically more affordable as they have simpler designs, limited amenities, and direct room access from the outside.
The cost to construct a 3-star hotel ranges from $228 to $450 per square foot, with an average per-room cost of $265,200. These hotels balance functionality and comfort, often including optional features like gyms or pools.
Building a 5-star hotel can cost between $398 and $660 per square foot, with an average cost of $724,800 per room. These hotels include world-class amenities, high-end materials, and personalized guest services.
Urban hotels cost more due to higher land prices, labor rates, and transportation costs for materials. The inclusion of luxury amenities such as pools, spas, or restaurants further increases construction costs.
- Hard Costs: Cover construction-related expenses like labor, materials, and equipment (66%-79.2% of the budget).
- Soft Costs: Include fees for permits, architectural services, insurance, and taxes (14.4% of the budget).
Traditional hotel construction typically takes 3 to 3.5 years. Modular construction methods can reduce the timeline by 20%-30%, saving 6-9 months.
- Spas: Cost around $600,000 or more for luxury facilities.
- Restaurants: Range from $180 to $900 per square foot, depending on the level of customization and quality.
Key factors include location, hotel type, size, design complexity, materials, labor rates, and amenities offered.
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