How Much Does It Cost To Build A Small Hotel

A small hotel is a hotel that has less than 100 rooms. If a hotel has over 100 rooms, it’s considered a mid-sized or large hotel. Small hotels are also called boutique hotels, B&Bs, and guest houses.

Small hotels usually have a more intimate feel, as they often cater to a specific niche or target audience. For example, they may offer more luxurious amenities than larger hotels do, such as private baths and concierge services. Because of their size, small hotels don’t have the staff or resources that larger hotels do, so guests often feel like they’re getting more attention from staff members.

Building a small hotel is a complicated process that requires a lot of planning and budgeting. Before you even start construction, you need to find the land and make sure it’s available for development. Then comes the foundation work, which is where most budgets are blown. Most hotels require concrete footings that can be expensive but are necessary for sturdiness and longevity in harsh climates like ours here in Miami.

Site Preparation

Site preparation is the cost of clearing, grubbing, and grading the land. It also includes installing lines for power, water, and sewer. The cost can vary from $2 to $10 per square foot.

The price of the land is a major factor in determining how much it will cost to build a small hotel on it. The price will vary depending on what kind of lot you’ve bought; whether it’s located near an airport or freeway; its size (in acres); whether there are any buildings already on it; whether there are any zoning problems with your property; if you’re interested in obtaining state tax credits for building green energy structures like solar panels or wind turbines; etcetera ad infinitum ad nauseam ad infinitum again (for infinity). Most residential lots sell between $5-$10 per square foot while commercial lots sell at higher rates, $15-$30 per square foot depending upon their location within urban areas where land values tend towards being highest since many people want access to their businesses without having long commutes each day just because they’d rather spend time relaxing with their families instead which means they need somewhere close by where they can go do those things instead.


The foundation is the most expensive and important part of building a hotel. It’s also the most difficult, so we recommend that you hire an expert to help you with this component. It’s possible that you’ll need multiple foundations for your hotel depending on its size, but don’t worry; we’ll cover everything in our upcoming guide on how to build a small hotel from scratch.

The most common type of foundation is a concrete slab. It’s made up of a thick layer of concrete that supports the weight of your hotel and its guests. You’ll need to make sure that this layer is as thick as possible, but don’t worry; we’ll cover everything in our upcoming guide on how to build a small hotel from scratch.


  • You can purchase lots for development in most major cities. Smaller towns and rural areas may have fewer options available, so it’s important that you do your research beforehand and find out where the best locations are for your project. This will help you save money on transportation costs when it comes time to install utilities or build roads into your new property. If possible, try looking at parcels that already have some infrastructure in place (such as electricity lines or access roads) so that there aren’t any delays later on down the line due to unexpected expenses with regard to construction costs.

Land costs are usually included in the total cost of 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.

Building materials

Now that you have a basic idea of what it costs to build a small hotel, let’s take a look at the building materials.

Building Materials:

  • Cost of the materials you will use to build your hotel: $10,000-$20,000 (depending on material choices)
  • Cost of finishing materials like paint and wallpaper: $0-$5,000 (if you choose not to do this yourself)


Labor costs are the biggest expense for building a hotel. Labor costs depend on the size of the hotel, the number of rooms, and whether workers are local or imported. If you hire local workers, they will cost more than foreign laborers who have been brought in to work on your project.

Labor costs can be reduced by using prefabricated materials and modular hotels where whole sections of rooms can be detached from each other and moved around as needed.


There are several different types of flooring options for you to choose from. Below are the most commonly used types and their benefits.

Cost: $15-25 per square foot (depending on how much you order, who you hire, and what kind of material it is).

Installation time: One day or two days depending on your contractor’s skill level, tools, and experience with this type of work.

Removal costs: $0-10 per square foot since it can be done by hand without special equipment or tools needed (a hammer, chisel, and sledgehammer).


Maintenance costs can be as high as 5% of the total cost of building a small hotel. If you want to save money on maintenance, then use materials that are durable and will last longer than others. Also, make sure you have enough money set aside for when repairs need to be done.

A good way to keep your maintenance costs low is by finding a contractor who does not overcharge for their services or materials.


Insurance is a necessary component of any business, but it can be an expensive one. If you’re building a small hotel, it’s important to understand the insurance rates for various types of hotels and how those rates compare with each other in order to make sure that you receive the best value for your money.

  • The size of the hotel will affect its insurance costs. A small boutique hotel will have lower insurance premiums than a large resort property or even an all-suites facility.
  • The location also plays a role in determining what type of policy is best suited for your business needs. In general, rural areas tend to have lower premiums than metropolitan ones do; however, this can vary depending on which state or region you live in (and if there are any recent natural disasters).
  • The type of hotel itself affects its insurance rates because some are more likely than others to experience theft or vandalism problems over time – these include beachfront properties as well as those located near busy roads or highways where drivers may be distracted by billboards while navigating traffic lights at night time hours when most people need rest after visiting local attractions like museums/galleries during daytime hours.”


Permits are required for any construction project, and obtaining them can be a costly endeavor. Depending on your location, permits may be required by the state or federal government as well as the local authorities. In most cases, you’ll need several different permits: one from your city’s building department (if there is one), another from your county or town council, and possibly more depending on what type of development you’re doing. If you’re building an addition to an existing structure like an apartment building or commercial property, or if it’s going on non-zoned land, You may also need additional zoning approvals.

  • Your city might offer a discount on fees if you can prove that hiring contractors will help boost their local economy.


  • Taxes: If you’re building a small hotel, you’re going to have to pay taxes. There’s no avoiding that. However, there are ways to get a good deal on taxes when building your own small hotel; for example, if you buy land from the federal government and put up your own buildings on that land, then the government might give you a tax break or even completely waive some of your taxes.
  • How much will they cost? It depends on what state or country (if applicable) where your hotel is located in, but as far as federal taxes go…let’s say roughly $100/month per person living in the building, with an additional fee of around $50-$100/month per room rented out by guests who live there permanently throughout most seasons but leave during winter months due to freezing temperatures outside where they live closer towards their job location while others come back during summer months since those temperatures aren’t too bad yet at all times when compared against other places around them like Antarctica or Greenland where it’s much warmer than here at this time of year.

Furniture, Fixtures, and Equipment

Furniture, fixtures, and equipment are an essential part of your hotel’s operation, but they’re also an important part of its bottom line. The cost of a hotel’s furniture, fixtures, and equipment can vary greatly depending on the type of establishment you’re building. For example, if you’re opening a luxury five-star resort in Aspen Colorado with all the bells and whistles you’ll need many more pieces than if you were opening a budget motel located in downtown Los Angeles. Regardless of where your hotel is located and what kind of clientele it attracts there are costs associated with furniture and fixtures that must be considered when estimating how much it will cost to build a small hotel:

  • Furniture: This includes everything from couches to chairs to televisions; whatever furnishes your rooms should be included here (though some items may be billed separately).
  • Fixtures: These are also important items for any business or home but particularly so for hotels because they help create an ambiance conducive to relaxation or productivity depending on what type of establishment you have built, sofas versus desks versus beds. In addition to these common categories, there are others like the artwork which tend not only to contribute aesthetically but also psychologically as well which makes them indispensable when planning out this part.

Building materials for the structure.

The cost of building materials for the structure is an important part of the budget. It can vary greatly depending on the size, shape, and type of building you want to create. It’s also a good idea to get quotes from multiple suppliers before making your final decision.

When it comes to concrete, steel and wood are common materials used in construction projects like this one. Concrete is generally cheaper than steel but it requires more time and labor for installation on-site compared to its counterpart material which requires less work but costs more money overall due to its material value alone (i.e., no installation fees). Wood is another option if you want something more sustainable than other materials such as concrete; however, expect higher costs due to how hard it will be finding trees close enough together so that none need chopping down during construction stages, and remember: there probably won’t be any leftovers once everything’s done.

Architect’s fees.

The cost of an architect depends on the size and complexity of the project. They will charge a fee for their services, which is usually based on the square footage of the building.

If you’re building a small hotel in an area with lots of development, you may be able to find an architect who will offer free designs or at least provide you with some options that you can choose from at no cost. However, once you decide which design works best for your hotel, then it’s time to pay up.

Engineering fees.

Engineering fees are an important part of the budget. The cost of hiring an engineer in your area may vary, but in general, it should not be more than $150 per hour for small hotels up to about $350 per hour for larger buildings. You can expect to pay between $2,000 and $10,000 for engineering fees depending on the size of your hotel.

The process for getting a permit depends on where you live and how complicated your project is. In some places there isn’t even a process at all, you just start work and hope no one notices or cares until after you finish building.

If you need permits, expect to pay around $50-$100 per permit plus another few hundred dollars each time they require inspections (which will happen several times during construction). The variation here depends greatly on the location: big cities tend to have higher costs because there are so many inspectors available who charge high rates for their time; rural areas generally have lower costs due to fewer inspectors competing for jobs and lower demand for their services.

Construction supervision costs.

If you are building a small hotel, you will need to hire someone to supervise the construction project. There are many different positions that can fulfill this role, but they all have similar responsibilities: ensuring that the construction is done according to your plans and specifications, managing risk-taking on-site, scheduling resources, and people, and making sure they’re ready when needed, keeping track of budgets and financials throughout the process (particularly during peaks), making sure everything gets done by any deadlines required by law or contract, and more.

The positions available include Construction Supervisor (who oversees all aspects of a single building project), Construction Manager (who oversees all aspects of multiple projects at once), Construction Project Manager (who helps manage multiple projects at once but not necessarily as many as one could oversee with being a CM). Depending on how big or complicated your hotel is going to be, these titles may also have sub-titles like “Construction Project Leader” or “Construction Team Leader.”

The cost of construction equipment.

To complete a small hotel, you’ll need construction equipment. The size and scope of this equipment will largely depend on the size of your building project. If you build a large hotel or resort with hundreds or thousands of rooms, then obviously it’s going to take more heavy machinery than if you were building an intimate boutique hotel that only has 10 rooms.

It’s also important to note that the cost of construction equipment is usually included in the total cost of building a hotel (depending on whether they’re renting or buying). This means that builders won’t have any additional out-of-pocket costs when they buy their equipment; all expenses will be taken care of by their company at no extra charge. When deciding what kind of machines will be needed for your job site, remember that some tasks are best suited for certain types:

  • Excavators may be used for site prep work like grading land or removing topsoil; these machines can cost anywhere from $30k-$100k depending on how much power they have under the hood.
  • Compactors are great if there are lots of rubble left over after demolition work has been completed; compacting allows workers to get rid of those chunks into nice neat piles which makes cleanup faster and easier later on down the road…

How much does it cost to build a small hotel?

The cost of building a small hotel depends on the size and location of your property. In general, though, it will cost between $400,000 and $600,000 to build a small hotel with eight to 15 rooms. This includes structural framing, electrical wiring, plumbing, and other common areas such as restrooms and closets. The average cost for this type of project is about $400 per square foot.

If you’re building in a busy area or creating a large structure (20+ rooms), then expect costs that are closer to $600 per square foot on average.

Here are the costs involved in building a small hotel

Here are the costs involved in building a small hotel:

  • The cost of construction equipment, such as backhoes and bulldozers.
  • The cost of building materials for the structure.
  • Architect’s fees and engineering fees and any other professional service fees that you may incur during the process of constructing your hotel (for example, if you hire an architect to draw up plans for your hotel or if an engineer designs a foundation for your hotel).
  • Construction supervision costs if you opt to hire someone to oversee this phase of the project so that it moves along smoothly and on time.

The price can vary from $20k-$50k depending on the size and amenities needed in this type of building project.

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