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How Much Does It Cost to Build the Average Hotel?

Low
$7.5M
Average Cost
$22.1M
High
$60M
(3-star hotel in a suburban area with 100 rooms)

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How Much Does It Cost to Build the Average Hotel?

Low
$7.5M
Average Cost
$22.1M
High
$60M
(3-star hotel in a suburban area with 100 rooms)

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The travel and hotel industries are good investments for many people. Building a hotel is a sound financial investment, as the travel industry continues to grow. Hotels come in many sizes and types, from simple motels and inns to 5-star luxury, mega-hotels. For this reason, there is a very wide range of costs associated with this type of project. The national average range is $13,000,000 to $32,000,000, with most people spending around $22,100,000​ on a 3-star hotel with 100 rooms. At the low end of the spectrum, it is possible to build a 2-story motel for $7,500,000, while at the high end, you can spend more than $60,000,000 on a luxury 5-star hotel.

Cost to Build a Hotel

Building a Hotel Costs
National average cost$22,100,000​
Average range$13,000,000 - $32,000,000
Minimum cost$7,500,000
Maximum cost$60,000,000


Updated: What's new?

Build a Hotel Cost by Project Range

Low
$7.5M
2-story motel with 100 rooms
Average Cost
$22.1M
3-star hotel in a suburban area with 100 rooms
High
$60M
5-star luxury hotel in an urban area with 100 rooms

Hotel Construction Cost per Square Foot

There is an enormous range of costs per square foot for hotel construction. This is because different types of hotels include varying amenities, areas, and materials. In addition, hotels built in urban areas usually have a higher cost per square foot than hotels built in more rural or suburban areas. For this reason, there is a hotel construction cost per square foot range of $134 to $550:

Hotel Construction Cost Chart

Hotel Construction Cost Chart


Hotel TypeCost per Sq.Ft. Rural AreaCost per Sq.ft. Urban Area
Motel$134 - $170$180 - $234
3-Star$190 - $245$250 - $375
4-Star$260 - $345$350 - $410
5-Star$332 - $400$400 - $550

Cost to Build a Motel per Square Foot

Motels are constructed for much less money than larger hotels. They tend to be 2 - 3 stories, have few amenities, and few common areas. For this reason, expect to find costs ranging from $134 - $234 a square foot, depending on the state you are building in.

Cost to Build a 3-Star Hotel per Square Foot

Three-star hotels are considered standard hotels. They have lobbies, communal areas, and restaurants. They may have gyms and pools as well, although not all include these features. They often do not have as many amenities as other hotels, and the materials are usually standard grade for a range of $190 to $375 a square foot, depending on the area.

Cost to Build a 4-Star Hotel per Square Foot

Four-star hotels generally include more amenities and better materials than a 3-star. They often have gym and entertainment areas, spas, more than one restaurant, and possibly other shopping and services. For this reason, the cost range is usually higher, between $260 and $410 a square foot, depending on the location.

Cost to Build a 5-Star Hotel per Square Foot

Five-star hotels are luxury buildings that include unique and high-end services for their guests. They include many services, high-end gyms, pools, spas, and restaurants. They also have more communal areas, shopping, and other amenities. This increases the cost to build per square foot to between $332 and $550, depending on the area.


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Hotel Construction Cost per Room

While square footage is a popular way to break down the construction costs, many hotels are also priced per room. This makes an easier determination of the project’s total cost by projecting the number of occupants, rather than the overall space. Like square footage, the cost to build a hotel per room varies on the type of hotel, although the location is important too:


Hotel Construction Cost

Hotel Construction Cost


Hotel TypeAverage Cost per Room to Build
Motel$75,000
3-Star$221,000
4-Star$318,200
5-Star$604,200


Costs of Building a Motel per Room

Motels do not typically have many amenities, and the rooms are entered from outdoors, eliminating shared indoor areas. This means that if the motel has the same number of rooms as a better hotel, its construction costs are lower. The average cost per room to build a motel is around $75,000.

Costs of Building a 3-Star Hotel per Room

Three-star hotels may have amenities and features for guests, but these are optional and vary by hotel. This is considered a standard-quality hotel with good quality but not luxurious features. There may be amenities like gyms and restaurants but not always. They have an average cost to construct per room of $221,000.

Cost of Building a 4-Star Hotel per Room

In a 4-star hotel, many of the features that were considered optional for a 3-star hotel are now standard. This includes restaurants, gyms, pools, spas, and communal areas. The materials used are usually of higher quality as well. This makes the cost to build per room around $318,200 on average.

Cost of Building a 5-Star Hotel per Room

Five-star hotels have many of the same features as a 4-star hotel, but they may have more of them or better quality. In addition, 5-star hotels often include additional services for their guests than a 4-star hotel may. The rooms are usually much larger, so the hotel may have fewer rooms in the same square footage. They have an average cost to build per room of around $604,200.

Specialty Hotel Construction Costs

In addition to regular motels and hotels, several hotels also cater to specific needs or other purposes. Some of these fall in with the “luxury” line of 5-star hotels, but others have their specific costs:


Hotel Construction Costs

Hotel Construction Costs


Hotel TypeAverage Cost per Square Foot
Guest house$100 - $500/sq.ft.
Boutique hotel$190 - $550/sq.ft.
Casino$300 - $550/sq.ft.
Resort$300 - $550/sq.ft.


Average Price to Build a Guest House

With Airbnb and the trend of catering toward travel, guest houses are becoming a more common phenomenon. A guest house is anything from a small house located on your property for friends and family to a bed-and-breakfast style inn with boutique amenities. Because of this, there is a wide range of associated costs. For the average backyard guest house, costs start at $100 per square foot. For a luxury guest house meant for more people, costs go as high as $500 a square foot.

Cost to Build a Boutique Hotel

Boutique hotels tend to be smaller than most hotels, and they are designed to cater to guests in very specific ways. Someone may opt to stay at a boutique hotel because of a theme or a specific amenity that you cannot find elsewhere, such as a hotel that caters to pets. They have a full range of features and a wide range of costs from $190 to $550 a square foot, depending on the area and features included.

Cost to Build a Casino

Casinos are considered luxury hotels and resorts in most areas. The idea is to encourage guests to spend money so that the business profits. To this end, the casino's hotel portion is generally 5 stars, with many features and amenities and several restaurants and types of entertainment. This means a cost range per square foot between $300 and $550, depending on the area.

Cost to Build a Resort

Resorts are usually considered a destination stay, where people travel to vacation at them. For this reason, they are usually classified as luxury or boutique and are generally 5-star facilities with many services and features included. Depending on the area, they cost between $300 and $550 per square foot to build.


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Hotel Construction Cost Breakdown

Every hotel is different in size, scale, number of rooms, land, and construction material. For this reason, your exact costs and percentages vary. However, it is possible to break down the various elements of building the hotel into percentages and categories that you can use to determine where your budget is going for this project:


Hotel Construction Cost Breakdown

Hotel Construction Cost Breakdown


BreakdownPercent of Total Project Cost
Land10% - 21%
Hard costs (material, construction)55% - 66%
Soft costs (non-construction fees)12%
Furniture and fixtures9%
Opening expenses3%


Land Costs

Land costs are usually included in the total cost to build. This includes both the purchase of the land and any work that must be done before development. This may include any existing buildings and their rework or tear down as well. Generally, land costs are 10% to 21% of the total project cost.

Hard Costs

Hard costs are construction-related expenses. These may include building or refurbishing an existing building. This includes both the material and the labor needed to construct and finish the site. Hard costs include the finish materials, such as flooring and drywall, and basic construction materials like concrete and steel. Because this group includes a range of materials and encompasses both new builds and refurbishment of existing properties, the cost is 55% to 66%.

Soft Costs

Soft costs are non-construction-based fees. This includes the architect and interior designer fees, draftsman, structural engineers, and other things like maintenance, insurance, permits, taxes, and other related costs to building that are not a specific material or visible in the finished build. Soft costs average out to around 12% of your total budget.

Furniture, Fixtures, and Equipment

Your hotel is not complete unless it is furnished and ready for operation. So, in addition to the hard costs of building, you also need to factor in the furnishings and fixtures, such as beds, tables, reception desks, restaurant and kitchen equipment, lights, sinks, plumbing, and furnishings like sheets, pillows, and towels that all hotels need to function. This portion of your budget should be around 9% of the total costs.

Opening Expenses

Also included in the total budget should be everything you need to open and run the hotel. This includes inventory, supplies, marketing, staffing, and technical services like utilities. This is an important part of the total budget and should not be overlooked. It usually runs to around 3% of the total project costs.

Labor Breakdown

It is common to work with a hotel builder or contractor specializing in this type of commercial build. Builders and contractors may charge up to $150 to $250 an hour for their services. In addition, you will likely need the services of the following professionals:

Medium-sized hotel building


Hotel Room Size Requirements

There are very few actual requirements when it comes to the size of a hotel room. The average size of a hotel room in the U.S. for a standard hotel is around 330 sq.ft. However, it is possible to have luxury hotel rooms that are over 1,000 sq.ft. in size, and new trends in micro hotels have rooms that are less than 150 sq.ft. in size.

The only requirements refer to ADA-accessible hotel rooms. These rooms need to have hallways and doorways that are a minimum of 32-inches wide inside the room and 36-inches wide outside of the room. There must be a minimum of 30 inches around each bed and turning radiuses of 60 inches in bathrooms and other small spaces.

Beyond this, there are no requirements for making a hotel room a specific size or layout.

How Much Does it Cost to Build a Marriott Hotel?

Marriotts are a specific hotel franchise, which has set franchise fees and setup costs. The average cost to open a Marriott is between $7,000,000 and $10,000,000. This includes an initial franchise fee of $600,000 or $500 per room, whichever is greater.​

Cost to Run a Hotel

The cost to run a hotel varies, depending on many factors like the hotel size, number of staff and employees, number of guests at any given time, what services the hotel includes, and level of service. A 5-star hotel costs more to run than a 3-star.

With that said, you can estimate the percentages of your total revenue per room occupied that go into operation. Remember, these may not be the total expenses for your hotel because you may have restaurants, spas, and other amenities that change these figures.

Rooms payroll - 18.89%

Rooms expenses - 15.5%

Overhead payroll - 10.18%

Overhead expenses - 13.23%

Energy costs - 5.61%

Owner expenses - 28.44%

Cash flow - 8.15%


Modern hotel building with swimming pool at night


How Long Does it Take to Build a Hotel

Hotels are a serious undertaking to build. From the first designs to the final finishes before opening, most hotels have a timeline of 2½ to 3 years to build. This assumes traditional construction. If you choose to use a modular build, it is roughly 20% to 30% faster, about 6 to 9 months faster, than traditional building.


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Enhancements and Improvement Costs

Cost to Build a Restaurant

Most 4 and 5-star hotels and some 3-star hotels include at least one restaurant in their plan, so their costs are typically higher. Building a restaurant onto an existing hotel costs around $150 to $750 a square foot, depending on the establishment’s level of quality.

Car Service

Some hotels include car service, including pick up and drop off from airports and other transportation. Some even provide rides within a certain radius. Adding a car service starts at $50,000 and goes up, depending on the number and make of cars.

Cost to Add a Spa

Many 4 and 5-star hotels also include spas on their premises, which is accounted for in their plan and overall costs. They may be added to some 3-star hotels and have an average cost of $500,000.

Additional Considerations and Costs

  • While the hotel’s appearance is important, it is also crucial to make sure that your hotel is comfortable, warm, and convenient. This is particularly true of boutique hotels because many people choose them for their homey atmosphere.
  • Pay attention to the location of your hotel. Not only does it impact building costs, but it also impacts success. Make sure that there are not too many competitors so that your hotel does well.
  • Many external factors influence how well your hotel does. These include trends in domestic travel, consumer spending, consumer confidence in the industry, and international guests. These trends change over time, so it is good to keep them in mind and leave room to adjust.
  • In addition to building a hotel, it is possible to also purchase and renovate an older or existing hotel. Franchise hotels are also available, usually at lower costs. Each project has its own set of total costs, influenced by location and the type of hotel you are building. Speak to a hotel builder or architect to get a better idea of these costs.

FAQs

  • How big is the average hotel room?

Hotel rooms come in all sizes, with the average being around 330 sq.ft.

  • How much does the average hotel cost per night?

Many factors influence the cost of a hotel room per night. The average range is $50 - $200.

  • How much electricity does a hotel room use?

Expect your energy costs to make up 5% of the hotel’s expenditure budget.

  • How much does it cost to furnish a hotel room?

Furnishings make up roughly 9% of the hotel’s budget.

  • How much does it cost to make a 5-star hotel?

The average cost of a 100-room 5-star hotel is over $60,000,000.

  • What is the largest hotel chain in the world?

Marriott is the largest hotel chain in the world.

  • How profitable is owning a hotel?

This is a very variable amount because hotel types, sizes, and services vary, and with them, so does the profit. Expect profits to make up roughly 36.95% of a room’s occupancy costs.

Cost to build the average hotel varies greatly by region (and even by zip code). To get free estimates from local contractors, please indicate yours.

Updated:
The information provided by our cost guides comes from a great variety of sources, including specialized publications and websites, cost studies, U.S. associations, reports from the U.S. government, contractors and subcontractors, material suppliers, material price services, and other vendor websites. For more information, read our Methodology and sources.
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Cost to build the average hotel varies greatly by region (and even by zip code). To get free estimates from local contractors, please indicate yours.

The information provided by our cost guides comes from a great variety of sources, including specialized publications and websites, cost studies, U.S. associations, reports from the U.S. government, contractors and subcontractors, material suppliers, material price services, and other vendor websites. For more information, read our Methodology and sources.