Buyers typically pay a wide range for hotel construction, driven by brand standards, location, and room count. The main cost driver is the per-key cost, combined with site, permitting, and interior fit-out requirements. This article outlines typical cost ranges in USD and provides practical pricing guidance for U.S. buyers.
| Item | Low | Average | High | Notes |
|---|---|---|---|---|
| Per Key Construction | $180,000 | $280,000 | $420,000 | Assumes midscale to upscale brand; excludes land and soft costs. |
| Land & Site Prep | $20,000 | $60,000 | $150,000 | Lot condition and access influence topography work. |
| FF&E (Furniture, Fixtures, Equipment) | $25,000 | $60,000 | $120,000 | Depends on theater, lobby, and room spec levels. |
| Soft Costs (Permits, Fees, Design) | $40,000 | $80,000 | $150,000 | Architectural, engineering, and approvals vary by jurisdiction. |
| Landlord Improvements / Exterior | $20,000 | $60,000 | $120,000 | Facade work and shared amenities affect totals. |
| Contingency | $15,000 | $40,000 | $90,000 | Typically 5–15% of hard costs. |
| Taxes & Insurance | $5,000 | $15,000 | $40,000 | Depends on location and project scale. |
Assumptions: region, specs, labor hours.
Overview Of Costs
Hotel construction cost per key varies with brand positioning, room count, and location. Typical total project costs range from $50 million to $150 million for a 250–600 key project, translating to per-key ranges of $200,000 to $420,000 depending on site conditions and amenities. A balanced view considers hard costs (structure, MEP, interiors) and soft costs (design, approvals, financing). This section provides total project ranges and per-key ranges with brief assumptions to help set budget expectations.
Cost Breakdown
Within the cost breakdown, four to six columns help quantify major drivers and where money goes. The following table highlights primary categories and typical share ranges by project size. Values assume a mid-market to upper-midscale hotel in a suburban or secondary urban market with standard guestroom counts and moderate lobby/amenity programs.
| Category | Low | Average | High | Notes | Typical Share |
|---|---|---|---|---|---|
| Materials | $40,000,000 | $60,000,000 | $90,000,000 | Concrete, steel, envelope, interior finishes | 40–50% |
| Labor | $20,000,000 | $40,000,000 | $70,000,000 | Construction crews, supervisors, subcontractors | 25–35% |
| Equipment | $5,000,000 | $12,000,000 | $25,000,000 | MEP gear, hotel systems, lifts | 5–10% |
| Permits | $2,000,000 | $6,000,000 | $15,000,000 | Impact fees, plan reviews, inspections | 2–6% |
| Delivery/Disposal | $1,000,000 | $3,000,000 | $8,000,000 | Waste handling, transport, equipment rental | 1–3% |
| FF&E | $15,000,000 | $35,000,000 | $70,000,000 | Furniture, fixtures, lighting, decor | 15–25% |
| Contingency | $5,000,000 | $15,000,000 | $40,000,000 | Cost overruns and unknowns | 5–12% |
| Taxes | $2,000,000 | $6,000,000 | $15,000,000 | Local/state taxes, transfer taxes | 2–7% |
Assumptions: project scale, brand standards, location.
What Drives Price
Pricing is driven by brand standards, site conditions, and room mix. Key cost thresholds include a base per-key target and premium adders for higher finishes, lobby complexity, and mechanical systems. The main price levers are structural scope, interior fit-out quality, and hotel technology integration. This section breaks down typical price variables for hotel builds and how they affect the overall cost per key.
Labor, Hours & Rates
Labor costs depend on regional wage levels, availability of skilled trades, and project duration. In the U.S., low-wage markets may see lower per-key labor inputs, while markets with tight labor supply or high union presence can push hourly rates higher. Typical install time ranges from 10–14 months for midscale to 18–24 months for upscale projects, affecting financing costs and cash flow. The following figures illustrate common ranges by project type and location.
Regional Price Differences
Regional differences can swing total costs by ±15–30% depending on market dynamics, land costs, and labor density. The contrasts among three broad U.S. regions illustrate this variance, along with suburban vs. urban nuances and rural cost modifiers. Understanding these deltas helps align bids and expectations when selecting a location for a new hotel.
Real-World Pricing Examples
Three scenario cards show practical budget ranges with labor hours and per-key totals to aid procurement planning. Each card varies in brand tier, room count, and amenity program, highlighting how design decisions translate into costs.
Scenario Card — Basic
Specs: 180 keys, midtown location, standard lobby, economy finishes. Labor: 8–10 months; crew mix standard trades. Total: $38,000,000–$55,000,000; per key: $211,000–$306,000.
Scenario Card — Mid-Range
Specs: 320 keys, suburban site, moderate lobby, durable mid-range finishes. Labor: 12–16 months; enhanced MEP. Total: $110,000,000–$140,000,000; per key: $344,000–$438,000.
Scenario Card — Premium
Specs: 480 keys, urban core, upscale lobby and amenities, high-end finishes. Labor: 18–24 months; premium finishes and systems. Total: $210,000,000–$320,000,000; per key: $438,000–$667,000.
Hotel construction budgets must reflect not only hard costs but also financing, soft costs, and potential incentives. Assumptions: market, brand, scope, timing.
Factors That Affect Price
Pricing variables include brand standards, site constraints, and project delivery method. A design-build approach may shift risk and cost structure, while a traditional design-bid-build path introduces more bid comparability but longer procurement timelines. Additional drivers such as seismic design requirements, sustainability certifications, and smart-building integrations can alter the cost per key by several tens of thousands of dollars.
Ways To Save
Strategic choices can reduce upfront costs without sacrificing core functionality. Options include modular bedroom fixtures, phased amenity builds, and negotiating bulk FF&E deals with vendors. This section highlights practical strategies to tighten the budget while preserving quality and guest experience.
Cost By Region
Regional price differences matter for final budgeting and risk assessment. Costs commonly reflect labor supply, land values, permitting climates, and local construction norms. A regional lens helps forecast bid timing and anticipate financing needs, with typical deltas of 10–30% from high-cost coastal markets to lower-cost rural areas.
Note: This article focuses on construction cost per key and related hard costs for U.S. hotel projects. It aims to provide clear ranges and actionable insights for budgeting, bid comparison, and project planning without promoting a particular vendor or approach.