U.S. Hotel Development Cost Survey 2016/17
Hotel development activity correlates directly with the ebbs and flows of hotel-sector performance. As we reached the peak of the current cycle in 2016, developers pursued hotel construction and redevelopment at a pace we haven't seen since 2006 and 2007. HVS has tracked Hotel Development Costs for the last three decades, collecting data from actual hotel cost budgets during our assignments. This year's sample reflects the largest sample HVS has analyzed given the number of hotels in the pipeline, as well as our growing presence in 35 U.S. markets. The data in this survey reflect budgets from 2016. With the availability of more data, we elected to add a lifestyle/soft-brand category and a dual-branded category; moreover, we bifurcated the extended-stay hotel category into midscale and upscale segments. These products represent some the fastest-growing sectors. Thus, our data now reflect nine product categories. The brands represented in each of our categories (in our survey data) can be found in the addenda to this study. In the last year since the 2015/16 study was released, the most common question posed to our authors addressed the delineation of geographic data by segment. While we can sort the data for smaller samples in specific markets, we are unable to provide meaningful conclusions because of the limitations in the data set. However, the analysis and inclusion of both the median and the mean help to balance the high- and low-cost markets. Our goal in sharing this publication is to provide a basis for developers and consultants in evaluating their hotel development projects. This report should not be relied upon to determine the cost for actual hotel projects or for valuation purposes, but rather, it is intended to provide support for preliminary estimates or support for actual cost estimates, as well as to show a comparison across the categories. Please continue to reach out to us with your comments and questions, as this feedback helps improve our annual survey.