How much does it cost to build a hotel?
How much does it cost to build a hotel?
$130 – $550 cost per square foot
$50,000 – $800,000 cost per room
$13 million – $32 million total average cost
Cost to build a hotel
The average cost to build a hotel is $130 to $550 per square foot, depending on the room size, material quality, and location. Hotel construction costs are $50,000 to $800,000 per room or $13 to $32 million total. Building a luxury five-star resort costs much more than a small economy motel.
| National Average Cost | $22.5 million |
| Minimum Cost | $7.5 million |
| Maximum Cost | $60 million |
| Average Range | $13 to $32 million |
Cost to build a hotel by rating
The following table shows the average cost to build a hotel based on its rating, or how many stars it has:
| Number of stars | Average cost per square foot | Average cost per room |
|---|---|---|
| 5 | $330 – $550 | $500,000 – $800,000 |
| 4 | $260 – $410 | $250,000 – $500,000 |
| 3 | $190 – $380 | $150,000 – $250,000 |
| 2 | $130 – $230 | $50,000 – $150,000 |
Five-star hotels
Five-star hotels cost $330 to $550 per square foot to construct on average and are luxury buildings with high-end services. They have many amenities, including spas, gyms, pools, and restaurants. They also may have high-quality conference centers and shops.
Four-star hotels
Building a four-star hotel costs $260 to $410 per square foot. They usually have a gym, spa, restaurants, and sometimes shopping and other services. Four-star hotels have more amenities and high-quality materials than a three-star hotel but not as many as a five-star hotel.
Three-star hotels
Three-star hotels cost $190 to $380 per square foot to build and are what many people consider standard hotels. These hotels have lobbies and one or two restaurants. They may or may not have gyms and pools but generally have fewer amenities and use standard-grade materials.
Two-star hotels
Building an economy hotel or motel costs $130 to $230 per square foot. Motels cost much less than larger hotels but have fewer amenities. They usually have 2 to 3 stories and a no-frills pool but no elevator, restaurant, or gym.
Cost to build a specialty hotel by type
Some hotels have special features and do not easily fit into standard categories:
| Hotel type | Average cost per square foot |
|---|---|
| Guest house | $100 – $500 |
| Boutique hotel | $190 – $550 |
| Casino | $300 – $550 |
| Resort | $300 – $550 |
Guest house
The cost to build a guest house or Airbnb is $100 to $500 per square foot, depending on the house size and quality of the building materials. Guest houses may include everything from a small backyard property to a larger inn or bed-and-breakfast.
Boutique hotel
A boutique hotel costs $190 to $550 per square foot to build, depending on the size and number of features. Boutique hotels are smaller than most hotels and often have a special theme, design, or amenity that guests can’t easily find elsewhere.
Casino
Building a casino costs $300 to $550 per square foot, depending on the area. Casinos are often luxury hotels that encourage guests to gamble and spend more money on the property. They typically have five-star amenities like restaurants and entertainment.
Resort
Resorts cost $300 to $550 per square foot to build and are part of a destination vacation. Resorts typically offer varying types of relaxation, recreation, and food. They are usually four- or five-star properties that charge guests more fees than average.
Hotel construction cost factors
Building a hotel is a process that includes many different projects and professionals. Each project varies in cost depending on the materials, labor rates, room sizes, and features.
| Factor | Average cost per square foot |
|---|---|
| Foundation cost | $5 – $33 |
| Framing cost | $11 – $30 |
| Drywall cost | $1.50 – $3.50 |
| Flooring cost | $4 – $15 |
| Plumbing cost | $4 – $5 |
| Interior trim cost | $4 – $10 |
| Siding cost | $4 – $13 |
| Roof cost | $3 – $6 |
| Insulation cost | $1.00 – $4.50 |
| Electrical wiring cost | $4 – $9 |
| HVAC system cost | $3 – $6 |
| Interior painting cost | $1 – $3 |
| Countertops cost | $50 – $150 |
| Doors cost | $225 – $1,900 each |
| Windows cost | $450 – $1,500 each |
| Light fixtures cost | $70 – $300 each |
| Toilets cost | $350 – $800 each |
| Sinks cost | $330 – $1,300 each |
| Cabinets cost | $150 – $500 per linear foot |
The following factors also affect the cost to build a hotel:
Land: Before you can build a hotel, you’ll have to own the land itself, which is usually 9% to 14% of the total budget.
Location: Hotels on the east or west coast or in urban areas tend to cost more to build than in rural areas in the Midwest or south. Building a hotel close to restaurants, highways, or bodies of water costs more.
Demolition: If there is an existing property on the lot where you plan to build, you’ll need to remove it. Demolition costs $4 to $10 per square foot, while clearing wooded land costs $1,500 to $3,000 per acre.
Room sizes: There are very few requirements for hotel room sizes in the United States. The average hotel room is 300 to 350 square feet, but some luxury hotel rooms are over 1,000 square feet, and micro hotel rooms can be less than 150 square feet.
Brand: Hotels associated with well-known brand names such as Hilton or Marriott may cost more to build.
Signage: Business signs cost $2,000 to $5,000 on average for the sign and installation, but signage pricing can reach as high as $200,000, depending on the size, type, material, and whether it's an interior or exterior installation.
Hard vs. soft costs: Hard commercial construction costs include materials, labor, utilities, and other costs directly related to construction. Soft costs include designs, inspections, taxes, fees, permits, and other indirectly related costs. Soft costs are typically 30% to 40% of the hotel’s budget.
Operations & maintenance: After construction, you’ll need to pay for utilities, landscaping costs, and maintenance for elevators, electronics, gyms, pools, or laundry equipment. You’ll also have to hire and train hotel staff.
Building permits: Your general contractor will typically obtain building permits for you and include the cost in their labor charges.
Amenities: Adding a restaurant typically costs an extra $150 to $750 per square foot. Adding a spa costs $100 to $500 per square foot.
Furniture: Furnishing costs $4,000 to $15,000 per room, depending on the number of pieces, bed sizes, and material quality.
Research zoning permits before buying any land to make sure you can build a hotel in your desired location.
Labor
Before you build a hotel, you’ll have to hire several different professionals to design the building, make sure the land and plans are sound, and start construction:
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.
If you haven’t bought any land yet, consider hiring a lawyer. A real estate attorney can help navigate construction laws and zoning regulations, plus draft contracts for your contractors.
Hotel building cost FAQs
Is building a hotel a good investment?
Building a hotel is typically a good investment, depending on the location, because it produces a high return on investment (ROI) as well as a second revenue stream. As long as you keep the hotel in good condition, it should rise in value over time.
How long does it take to build a hotel?
Most hotels take 18 to 36 months to build, depending on the size, number of stories, and number of restaurants and other amenities. Any delays from shortages, disputes, or weather can impede the progress of the project.
Is it cheaper to buy or build a hotel?
Building a new hotel typically costs more up front and takes longer than buying an existing hotel. However, an older hotel will likely need more repairs. If you’re eager to start making a profit from a hotel, renovating an existing one may be a better choice.
How big is the average hotel room?
The average size of a hotel room is 300 to 350 square feet, but the sizes vary widely depending on the rating and location. Luxury hotel rooms are often over 1,000 square feet. Some micro hotel rooms are only 150 square feet.
Getting estimates from hotel construction companies
Before hiring an architect or a commercial construction company near you, remember to:
Choose experienced pros with the best reviews on HomeGuide and Google.
Ask to see a portfolio of past hotel projects.
Compare a few estimates with similar details from different contractors.
Choose licensed, bonded, and insured companies.
Get an itemized estimate in writing before moving forward.
Questions to ask hotel builders
Before hiring builders, ask these important questions:
How long have you been building hotels?
Can you show me any testimonials or references from past clients?
Will you hire all the necessary subcontractors, plumbers, and electricians?
How much input can I provide during the process? What’s the best way to do so?
What are your current labor rates?
What is the average timeline for a hotel with this many rooms?
Can you get me any discounts on bulk orders for materials?
What delays or extra fees should I expect?
Will you give me an estimate and contract in writing?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.