HVS has tracked hotel construction costs throughout the United States since 1976. Each year, HVS researches development costs from our database of actual hotel construction budgets, industry reports, and uniform franchise offering circulars. These sources provide the basis for our range of component costs per room.
This 2014/15 survey reports updated per-room hotel development costs through the end of 2014, and considers data for six lodging types:
• Economy/Budget Hotels,
• Midscale Hotels without Food and Beverage (w/o F&B),
• Extended-Stay Hotels,
• Midscale Hotels with Food and Beverage (w F&B),
• Full-Service Hotels, and
• Luxury Hotels and Independent Resorts.
In the HVS Hotel Development Cost Survey, the elements of a hotel development budget are broken down into five general categories: Land; Construction Costs and Site Improvements; Soft Costs; Furniture, Fixtures, and Equipment (FF&E); and Pre-opening and Working Capital. These categories provide general ranges for analyzing hotel development budgets on a per-room basis. The classifications are broad enough for professionals with different expertise to work with and understand.
New-project construction cost data collected may increase the range and/or affect the mean and median of the construction cost components. The upper and lower ends of the ranges also consider changes in construction cost components derived from published sources and industry indexes, and information from architects, contractors, developers, lenders, and other professionals involved with hotel development projects.
The Hotel Development Cost Survey includes actual ranges of development costs in each category. The survey is not meant to be a comparative tool to calculate changes from year to year—rather, it represents the true costs of building hotels across the United States at the particular time. As in previous years, the data represent a wide array of geographical locations, from tertiary markets in the Southwest to mid- Manhattan. The development costs of the same hotel product, say a limited-service Fairfield Inn or Holiday Inn Express, can be more than triple the amount from one locale to the other.
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