Building a hotel in a big city is a great investment. Many business investors go for this project to increase their revenues. Every year, a large number of new hotels are constructed. According to CoStar data, 157,713 hotel rooms are projected to be constructed in 2024.
However, this is not an easy task. If you’re planning to construct a hotel to expand your business, it is vital to plan a budget. Planning in advance is necessary to complete any project successfully. This guide will help you calculate the average cost to build a hotel. We’ll break down costs depending on hotel ratings and types.
Let’s dive into the article to examine what cost factors are included in building a hotel.
Average Cost to Build a Hotel
The average cost to build a hotel in the US can range between $12 million to $50 million. It takes up to $130 to $550 per square foot. A standard or basic hotel costs $50,000 to $800,000 per room.
However, this is just a rough estimate of a basic hotel. The cost will depend upon different factors. It includes location, size, type of hotel, luxuries, materials used, type of spaces include, and labor costs. It is advised to consult multiple contractors before planning. They will help you to plan the budget according to your specific requirements.
Based on recent data, here’s a general estimate:
- Small, budget-friendly motel: $7 million to $15 million
- Mid-sized, 3-star hotel: $15 million to $30 million
- Large, 4-star hotel: $30 million to $60 million
- Luxury, 5-star resort: $60 million or more
Cost to Build a Hotel by Rating
Hotels are built on different criteria that differentiate them in ratings or rankings. Following is a table that shows how each hotel differs from others.
Rating (By Star) |
Average Cost Per Sq Ft |
Average Cost Per Room |
| 2 | $130 – $230 | $50,000 – $150,000 |
| 3 | $190 – $380 | $150,000 – $250,000 |
| 4 | $260 – $410 | $250,000 – $500,000 |
| 5 | $330 – $550 | $500,000 – $800,000 |
Two-star hotels
These are commonly called economy hotels or motels. They are mostly less budget hotels to build. They only include basic necessities. They usually have 2 to 3 stories with limited rooms. They do not have any pools, gyms, gardens, or play areas.
Three-star hotels
These are considered standard hotels. These hotels have lobbies to give a proper look. They usually have one or two restaurants. They can also have a pool, gym, or garden.
Four-star hotels
This type of hotel may or may not be considered a luxury hotel. These hotels usually include a gym, spa, restaurants, pools, and sometimes shopping centers. They are built on standard materials and provide more services than 3-star hotels.
Five-star hotels
They are referred to as luxury hotels. They can consist of multiple stories including elevators. They provide high-end services. In addition to a spa, gym, restaurants, and shopping center, they can also have conference rooms and shops.
Cost According to the Type of Hotel
Sometimes, hotels are built for some special purpose. Following is a table to show that costs to build a hotel vary with specialties.
| Type Of Hotel | Features | Cost Per Sq Ft |
| Guest house | Standard rooms, bed inn breakfast, backyard, lobby | $100 – $500 |
| Boutique hotel | Smaller than normal hotels, shopping centers, shops, designer outlets | $190 – $550 |
| Casino | Along with rooms, private spaces, restaurants, pool, entertainment | $300 – $550 |
| Resort | Built on specific tourist locations, recreation activities and entertainment, include a garden, pools, spa, gym | $300 – $550 |
Cost Factors
Building a hotel is a big project that includes many professionals and projects. Below is a table for you to understand the average cost of building a hotel.
| Factor | Average Cost Per Sq Ft |
| Foundation cost | $5 – $33 |
| Framing cost | $11 – $30 |
| Drywall cost | $1.50 – $3.50 |
| Flooring | $4 – $15 |
| Plumbing | $4 – $5 |
| Interior trim cost | $4 – $10 |
| Siding cost | $4 – $13 |
| Siding cost | $3 – $6 |
| Insulation | $1.00 – $4.50 |
| Electrical wiring | $4 – $9 |
| HVAC | $3 – $6 |
| Painting | $1 – $3 |
| Countertops | $50 – $150 |
| Doors | $225 – $1,900 per door |
| Windows | $450 – $1,500 per window |
| Light fixtures | $70 – $300 per fixture |
| Toilets | $350 – $800 per toilet |
| Sinks | $330 – $1,300 per sink |
| Cabinets | $150 – $500 per linear foot |
| Furniture | $500- $1500 |
Labor Cost
To construct a hotel, you have to hire various professionals. Every worker charges fees according to their work.
- An architect charges $100 to $250 per hour.
- A structural engineer charges $100 to $220 per hour.
- A general contractor costs $50 to $150 per hour.
- An interior designer costs $50 to $200 per hour.
- Electrician services cost $50 to $130 per hour.
- Plumber services cost $45 to $150 per hour.
Permits and Legal Documents
Here’s a list of the common permits and legal documents needed when building a hotel:
Building Permit: Required to ensure the replacement meets local codes. Estimated cost: $50 to $300.
Environmental Impact Report: If the home is in a protected area. Estimated cost: $500 to $2,000.
Historic District Approval: If the home is in a historic area, special approval may be needed. Estimated cost: $100 to $500.
Inspection Fees: To verify proper installation. Estimated cost: $100 to $250.
Total permit costs can range from $250 to $3,050, depending on location and requirements.
Conclusion
The average cost to build a hotel in the US can range between $12 million to $50 million. It takes up to $130 to $550 per square foot. A standard or basic hotel costs $50,000 to $800,000 per room.
It is advised to take quotes from multiple contractors. They will help you make a budget according to your specific requirements. You can also use construction estimating software. This software will give you an estimated amount for a specific cost factor.
FAQs
Q1. How much does it cost to buy a hotel building?
The cost to buy a hotel building varies depending on the location, size, and condition of the property. On average, purchasing a hotel can cost anywhere from $3 million to $30 million, with luxury or large hotels costing even more.
Q2. How much does it cost to build a hotel per square foot?
The average cost to build a hotel in the US can range between $12 million to $50 million. It takes up to $130 to $550 per square foot.
Q3. How much does a 5-star hotel cost to build?
Five-star hotels cost $330 to $550 per square foot to build.
Q4. How much does it cost to build a 100-room hotel?
Building a 100-room hotel typically costs between $10 million and $30 million.
