Close

Cart

Total $0.00

Checkout

Analyzing historical trends, the key reason behind escalating costs per key continues to be low in efficiency and utilization of space. Price per sqm of total built up area remains largely the same and therefore it is crucial that any design optimizes the turnover per sqm of built areas. HVS provides an indicative reasonable range of BUA per asset type.

Hotel Development Cost

Source: HVS Research

 With the exception of Budget & Midscale Hotels which focus on efficient & flexible design, development cost per key for all other hotel classes have increased between 10%-20% since 2013, resulting in lower project returns. We consider that further reduction in development costs “HVS 2018 Recommendations” is achievable through increasing efficiency per key, design flexibility, and alignment between the intended positioning/achievable average rate and project investment.

Serviced Apartment Development Cost

Source: HVS Research

 Development cost per key for Midscale Serviced Apartments in the GCC dropped by approximately 5% since 2013, and increased significantly for Upscale/Five Star Serviced Apartments during the same period, resulting in lower project returns. We consider that further reduction in development costs “HVS 2018 Recommendations” is crucial in order to achieve an alignment between the target market/achievable average rate and project investment.

About HVS

Hotel owners, developers, investors, lenders, management companies, and public agencies around the globe rely on HVS to make informed business decisions. HVS’s commitment to excellence and unrivaled hospitality intelligence is delivered by more than 300 people in over 50 offices throughout the world who specialize in a wide range of hospitality assets including hotels, restaurants, casinos, shared ownership lodging, mixed-use developments, spas, and golf courses, as well as conventions, sports, and entertainment facilities.

Please login or register to post a comment.