Hotel Construction Costs Are on the Rise

Competition and rising land costs are two main reasons it’s getting more expensive to build hotels in the U.S. The U.S. Hotel Development Cost Survey 2014/15 by HVS, a global hospitality consulting firm, says commercial construction jumped as much as 11 percent last year. “In many markets, hotel developers are competing for land with residential developers,” writes Robyn Friedman on “Because the return on investment is often higher for apartment or condominium projects than for hotels, the residential developers can afford to drive up prices.”  Friedman notes that some 129,000 U.S. hotel rooms were under construction in February 2015, a 32 percent spike over February 2014.


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