Build a Hotel Cost

How much does it cost to build the average hotel?

There are a huge number of variables in such a question. For one thing, will it have a restaurant? What about a banquet or conference facility? Does it need a swimming pool or a gym? Is there a large lobby lounge?

According to USAToday, the average hotel room is roughly 325 square feet with interior dimensions of approximately 13'x25' (including a full bathroom). In the United States, the average hotel will have 115 rooms and require around 48,000 square feet.

Interestingly enough, a survey conducted by "Luxury and Resort Travel" found that the top amenities in most hotels were those "en suite" or available in the room rather than on the grounds. Because of this, we will consider the construction of a hotel with "Mid Priced" rooms, a lobby lounge, and the facilities to administer 24-hour room service.

The building of hotel requires an architect or an architectural firm, a knowledgeable contractor, a team of subcontractors, and a cooperative developer/owner to get the job done in a reasonable time frame.

  • According to Hawkins Research, Inc., most hotel projects should use materials and techniques that fall under the "Best" classifications to keep wear and tear or replacement costs low. Such a building would run at an average of $22.2 million to complete. This does not include acquisition of the land or any demolition costs, however.
  • The above figures place this construction at a $463 per square foot cost, though a national average of stands between $325 and $450 for hotel contractors. This pricing structure assumes that the work is unionized. "Open shop" laborers would follow a price structure that includes - carpenters, masons and excavators charging an average of $70 per hour, electricians between $65 to $85 per hour, painters between $20 and $35 per hour and plumbers between $45 and $65 per hour.
  • Materials would cost around $9.8 million, labor would cost roughly $8.9 million, and the machine costs would stand at roughly $935,000.

Cost breakout

What is included:

  • Foundation of reinforced concrete;
  • Roof made of steel beams on steel columns with panelized ½ inch plywood sheathing and five-ply insulation with a 36" overhang;
  • Windows of top quality and highest efficiency
  • Sheet vinyl and carpet floors;
  • Interior walls of gypsum board with heavy texture or plaster putty;
  • A suspended acoustic ceiling;
  • Exterior walls of masonry or veneer;
  • Bathrooms with vinyl wall covering, ceramic tile, glass shower, and ample wall mirrors. Plumbing will use copper tubing and highly quality fixtures;
  • Heating and cooling systems using circulated hot and cold water along with individual room thermostats;
  • Kitchenettes in all units containing a good sink, 10' of cabinetry and a drain board; and
  • Appliances to include ranges with cook tops, under counter refrigerators, microwaves, and electric kettles/coffee machines.

Most owners rely on both an architect and a contractor, and the architect will require an additional sum totaling approximately 17% of the building budget;

  • An architect or architectural team will:
    • Determine the scope of the project and establish a preliminary budget;
    • Draft list of proposed work, budget, and outline of plans;
    • Create the schematic design and draft floor plans with elevation drawings. Then work with any structural engineers and meet with planning agencies to verify any requirements;
    • Finalize drawings and incorporate all details about materials and finishes, any fixtures or equipment, and all systems in the structure;
    • Serve as the project manager and review the plans with any required local agencies while also obtaining necessary permits;
    • Serve in an advisory capacity to select contractor and help the client through the bid review process as well;
    • Complete construction documents;
    • Administer the construction, ensure that contractor's requests for payments are accurate and that all "final" details are corrected or finished by the contractor; and
    • Based on figures given the architect on this project would receive around $3.7 million for their services.
  • A contractor will:
    • Provide the services and materials required for the entire job;
    • Hire subcontractors according to need;
    • Suggest plans and ideas to architect/owner to help them meet goals;
    • Deliver final cleanup of entire job site;
    • Pull all permits for work and utility installation; and
    • For doing all of the day to day management of the project the average contractor earns around $65 per square foot. They might also "mark up" supplies and services as well. For example, on a shopping mall project as described here the contractor would earn around 14% of the budget and could account for more than $3 million in markup and indirect fees.