How much does it cost to own a hotel?

How much does it cost to start a hotel business? The cost to open a small hotel in the United States is around $1,000,000, and the average cost to open a 115-room hotel is around $22,000,000.



The cost to own a hotel in 2026 varies wildly based on the "segment" and location. For a budget or economy hotel (like a Super 8 or Econo Lodge), the initial investment typically ranges from $3 million to $5 million. Midscale hotels (like a Holiday Inn Express) usually require between $8 million and $15 million, while a full-service luxury hotel or resort can easily exceed $50 million to $100 million. These costs include the franchise fee (often $50,000+), land acquisition, construction or renovation, and "pre-opening" operating capital. For those looking to buy an existing franchise, you must also factor in "Royalty Fees" which are typically 4% to 6% of gross room revenue. In 2026, the rising cost of labor and high-interest rates for commercial loans mean that many new owners are opting for "conversions" (rebranding an existing building) rather than "ground-up" construction to save on capital.

That’s an excellent and complex question. The cost to own a hotel varies dramatically—from less than $1 million for a small motel to over $100 million for a luxury resort. It’s not a single price tag but a combination of acquisition, renovation, and ongoing operational costs.

Here’s a detailed breakdown of the key cost components, categorized for clarity.

1. Acquisition Costs (The Purchase Price)

This is the biggest upfront cost and depends entirely on: Location: A 100-room hotel in Manhattan costs astronomically more than one in a rural town. Brand & Type: A limited-service franchise (e.g., Holiday Inn Express, Hampton Inn) vs. a full-service Marriott vs. an independent boutique hotel. Condition: A turnkey property vs. a distressed asset needing major renovation. Number of Rooms: The primary driver of price. Cost is often discussed as Price Per Key (PPK).

Very Rough Price Per Key Ranges (U.S. Market): Economy / Budget Motel: $50,000 - $150,000 per room Example: 50-room motel = ~$2.5M - $7.5M purchase price Mid-Scale / Select-Service (e.g., Hilton Garden Inn): $150,000 - $300,000+ per room Example: 100-room hotel = ~$15M - $30M+ purchase price Upper Mid-Scale to Upscale (e.g., Marriott, Hilton): $300,000 - $500,000+ per room Luxury / Resort: $500,000 - $1,000,000+ per room

2. Initial Capital Expenditures (CapEx) & Startup Costs

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