How Much Does It Cost to Build a Hotel in 2025? Per‑Key Benchmarks, Budget Breakdown, and Procurement Levers

If you’re budgeting a new hotel, “how much does it cost?” usually means two things: cost per key (per room) and cost per square foot. In other words, the hospitality equivalent of “cost per unit” and “cost per area.” The total development cost typically includes land, construction (hard costs), professional and financing expenses (soft costs), FF&E, pre‑opening, and contingency.

Below is a practical, 2025‑current guide with clear definitions, segment benchmarks, cost drivers, and how smarter procurement can move your budget from red to green—without risking brand standards.

The Short Answer: 2025 Per‑Key Ranges by Segment

In 2025, U.S. medians from the HVS survey provide a reliable baseline for feasibility work. According to the HVS industry dataset in the HVS 2025 U.S. Hotel Development Cost Survey (2025):

• Limited‑service: approximately $167,000 per key (median)
• Midscale extended‑stay: around $170,000 per key (median)
• Select‑service: about $223,000 per key (median)
• Upscale extended‑stay: approximately $266,000 per key (median)
• Full‑service: about $409,000 per key (median)
• Luxury: often above $1,057,000 per key (median)
• All hotels (overall median): roughly $219,000 per key

These values represent total development cost (see categories in HVS’s methodology referenced in the HVS 2025 U.S. Hotel Development Cost Survey listing, 2025). Your actual budget will vary by site, brand, program, and procurement approach.

What “Cost to Build a Hotel” Includes (and What It Doesn’t)

A standard new‑build development budget typically covers:

• Land acquisition (often tracked separately due to market volatility)
• Hard costs: sitework, structure, envelope, MEPF, interiors
• Soft costs: architecture/engineering, permits, legal, insurance, financing, project/construction management
• FF&E: guestroom/public‑area furniture, casegoods, lighting fixtures, decorative items
• OS&E: operating supplies and equipment (linens, smallwares, back‑of‑house stock)
• Pre‑opening and working capital: hiring, training, marketing, initial inventory
• Contingency and escalation

HVS describes these as the standard total development cost categories in its survey framework (see the category discussion in the HVS 2025 U.S. Hotel Development Cost Survey, 2025). For clear definitions of hard vs. soft costs in construction practice, see Autodesk’s overview in Autodesk’s hotel construction costs guide (2024–2025).

Boundary note: This article focuses on new‑builds. Renovation/repositioning budgets are different (often expressed as cost per key for renovation scope only) and are not covered here.

Budget Breakdown: Hard vs. Soft Costs, FF&E, OS&E, Pre‑Opening

How do these buckets typically stack up?

• Hard vs. soft costs: Many project teams plan soft costs as a proportion of construction, commonly in the 20–30% range of hard costs, with hard costs comprising the bulk of spend. See definitions and planning context in Autodesk’s hotel construction costs guide (2024–2025).
• FF&E: For select‑service through upscale, FF&E often lands in the high‑single‑digit to mid‑teens share of total project, depending on brand and design ambition. For detailed, segment‑specific line items, practitioners use the annual estimating compendium referenced in the 2025 Hotel Cost Estimating Guide announcement by JN+A and HVS Design (2025).
• OS&E and pre‑opening: Typically budgeted separately; OS&E scales with positioning and key count; pre‑opening covers staffing, training, and opening inventory.
• Contingency and escalation: Commonly carried to manage unknowns and market volatility.

Sample budget quick math (illustrative only):

• Suppose you are evaluating a 180‑key select‑service hotel at about $223,000 per key (the 2025 HVS median for select‑service). Total development outlay ≈ $40.1M.
• If you assume (for calculation only) FF&E at 10% of total, FF&E ≈ $4.0M, leaving ≈ $36.1M across land, hard, soft, OS&E, pre‑opening, contingency.
• A common planning technique is to set soft costs as a factor of hard costs (e.g., 25% of hard). With a QS/GC, you can solve for hard vs. soft that fits your pro forma, then reconcile land, OS&E, pre‑opening, and contingency. Use this merely as a structuring method; validate with local data and brand standards.

Always reconcile category definitions in your pro forma to avoid double counting (for example, whether FF&E is modeled alongside or inside hard/soft costs).

Per Square Foot vs. Per Key: How to Translate

Per‑key is great for investors; per‑square‑foot is essential for builders. City examples help:

• BD+C’s RSMeans‑based 2025 snapshot shows New York hotels modeled around $290–$337 per square foot and Chicago around $262–$308 per square foot; see the city bands in BD+C’s “Hotel construction costs for 2025” (Gordian RSMeans) (2025).
• BD+C also published a multi‑city chart of model values (Orlando, Phoenix, Nashville, Atlanta, Las Vegas, etc.), illustrating how markets typically span roughly the low‑$180s to upper‑$270s per square foot outside the highest‑cost cities. See the model datapoints in the BD+C multi‑city hotel cost chart (April 2025) (2025).

Translating between metrics:

• If you know gross square footage (GSF), total project cost ÷ GSF ≈ $/sf.
• If you know $/sf, multiply by GSF to get a gross project cost, then ÷ keys for a per‑key sense‑check.
• Don’t forget program drivers: average room size, circulation and back‑of‑house grossing factors, amenities (F&B, meeting, spa), and parking—these swing GSF per key dramatically.

What Drives Costs Most in 2025 (and How to Control Them)

• Location and labor productivity: Union/non‑union, trade availability, and regional wage pressures. AHLA highlights persistent cost pressures and wage intensity in its AHLA State of the Industry 2025 overview (2025), which feeds into feasibility and financing.
• Brand standards and room mix: Prototype adherence, finish levels, and public‑area scope (lobbies, F&B, meeting rooms) drive both hard costs and FF&E.
• Structural system and envelope: Podium + wood, steel, or concrete decisions affect $/sf and schedule.
• MEPF complexity: Central plant vs. distributed systems (e.g., VRF), local energy codes, and acoustic/thermal performance targets.
• Procurement approach: Early supplier engagement, alternates with equal or better performance, and QA reduce change orders and rework.
• Escalation and currency/tariffs: Lock quotes, consider hedging and staged releases for major packages.

Long‑lead attention points for hotels include elevators, curtain wall/windows, major HVAC equipment, electrical switchgear, lighting packages, and custom casegoods. Early coordination and submittal sequencing are critical; see planning guidance in Autodesk’s hotel construction costs guide (2024–2025).

Modular vs. Conventional: Cost and Schedule Trade‑offs

Modular/offsite can compress schedules because sitework/foundations proceed in parallel with factory fabrication. Sector guidance indicates substantial schedule gains for repeatable room modules—often in the 25–50% range—when projects are well‑coordinated. See the hospitality use‑cases summarized on the Modular Building Institute’s modular hotels sector page (accessed 2024–2025).

On cost, results are highly project‑specific; teams sometimes achieve up to roughly 20% savings, but this depends on design, logistics, local acceptance, and regulatory context. The Modular Building Institute contrasts advantages and caveats in its MBI “modular vs. traditional” overview (accessed 2024–2025). Factor in front‑loaded design coordination, brand submittals, factory slotting, shipping/cranage, and jurisdictional approvals.

Sourcing Smart Without Sacrificing Brand Standards (ChinaBestBuy)

Strategic procurement can lower CAPEX and risk without diluting guest experience. Categories with outsized impact include:

• Finishes: porcelain/ceramic tile, LVT/engineered flooring, wall panels
• Millwork & casegoods and custom furniture for guestrooms and public areas
• Sanitary ware: fixtures, vanities, shower systems
• Doors/windows systems (coordinated to local fire/acoustic/energy requirements)
• Lighting packages (architectural and decorative) matched to voltage/certification needs
• Cabinetry and built‑ins

ChinaBestBuy is a factory‑direct, one‑stop partner for these categories with QA/inspection, consolidated logistics, and multilingual coordination across projects worldwide: tiles, flooring, cabinetry, sanitary ware, doors/windows, lighting, and custom furniture/casegoods. Explore capabilities at ChinaBestBuy.

How to protect quality and brand compliance while saving:

• Submittals and mock‑up rooms: Align alternates with brand standards; get approvals before mass production.
• Certifications and labeling: Confirm required marks (e.g., UL/CE/CCC as applicable) and test data for fire, acoustic, and durability.
• QA/inspection: Factory inspections and pre‑shipment checks reduce rework and damage‑in‑transit; consolidate shipments to cut handling.
• Schedule control: Reserve factory slots early; coordinate shop drawings to avoid idle time onsite.

Note on OS&E: Treat OS&E as a separate budget category; ChinaBestBuy’s core strengths are construction materials and FF&E‑adjacent items, not broad OS&E supply.

Risk Watchouts and How to De‑risk Your Budget

• Financing sensitivity: Overruns erode IRR; maintain contingency and update the pro forma with live quotes.
• Brand submittal timing: Late approvals can cascade into delays; plan a mock‑up room early.
• Long‑leads: Windows/curtain wall, elevators, switchgear, lighting, custom casegoods—sequence submittals and secure production slots.
• Code and compliance: Fire ratings, ADA, acoustic/energy codes, and labeling requirements (UL/CE/CCC) must be confirmed before procurement.
• Logistics: Choose Incoterms intentionally; use consolidated packaging and pre‑shipment inspection to cut damage risk.
• Currency/tariffs and warranty: Align payment terms and post‑install service expectations before ordering.

Developer/GC/QS Budget Pressure‑Test: 7 Quick Questions

1. Does your per‑key target match 2025 segment medians (plus local land and market adjusters)?
2. Have you reconciled hard vs. soft costs with a transparent formula (e.g., soft cost factor of hard) and realistic contingency?
3. Did you lock long‑lead packages early (windows/elevators/switchgear/lighting/casegoods)?
4. Are FF&E alternates backed by data sheets, certifications, and a brand‑approved mock‑up?
5. Did you plan pre‑opening and OS&E separately so they don’t get squeezed by construction changes?
6. If exploring modular, have you front‑loaded design/approvals and lined up factory slots and cranage/logistics?
7. Have you consolidated international shipments and QA inspections to minimize damage/rework risk?

FAQs

What is the average cost per key in 2025?

Segment medians vary widely. In the U.S., 2025 medians cluster around ~$167k per key for limited‑service, ~$223k for select‑service, ~$409k for full‑service, and above ~$1.06M for luxury, per the HVS 2025 U.S. Hotel Development Cost Survey (2025).

What are typical hotel construction costs per square foot?

City models in 2025 show wide variance—for example, roughly $290–$337/sf in New York and $262–$308/sf in Chicago, based on RSMeans data summarized by BD+C’s “Hotel construction costs for 2025” (2025).

How long does it take to build a 150–200 key select‑service hotel?

Conventional schedules often run 14–24 months from start of construction depending on market and delivery method. Modular approaches can be materially faster when well‑planned, with sector guidance indicating up to 25–50% schedule compression; see the Modular Building Institute’s hotel sector summary (accessed 2024–2025).

Where can I find detailed FF&E/OS&E line items?

Industry teams use the annually updated estimating compendium referenced in the 2025 Hotel Cost Estimating Guide announcement (JN+A and HVS Design) (2025); consult the current edition for granular itemizations.

Get a Consolidated Quote and a 30‑Minute Design/Materials Consult

Upload your BOQ/specs to get a consolidated materials quote and schedule a 30‑minute design/materials consultation with ChinaBestBuy. We’ll review alternates, certifications, submittals, and logistics to pressure‑test your budget before you break ground.

• Start here: ChinaBestBuy — One‑stop materials & FF&E sourcing

To tailor pricing for your pipeline, a few quick questions:

• Which segments, key counts, and regions should we price (e.g., 150–250 key select‑service in the U.S.; 200–400 key resort in the Middle East/SEA)? Any per‑key targets you’re working with?
• Which cost buckets should we prioritize (finishes/facade, casegoods, sanitary ware, lighting, doors/windows, cabinetry)? Any lead‑time constraints?
• Do you have a recent project brief we can reference (keys, segment, materials in scope, schedule priorities, brand)?
• Primary audience on your side: developers/investors, GCs/QS, or architects/designers? Tone preference: investor‑practical vs. design‑forward?
• Preferred next step: submit BOQ/Specs, book a design consult, or request a sample submittal package under NDA?