Originally Posted by
chinmoylad
I may be mistaken, but I don't think it needs to be that high (200 suites @ USD 5k/night on average) because generally speaking, land (and labour) tends to be most expensive in urban locations . Hotels in urban locations aren't unique, but they are in resort locations, where both land and labour tend to be cheaper. Not sure if North Island/Miavana are turning over a profit but you only have to look to them (10 suites at ~EUR 5,000/night++) to estimate the place likely didn't cost USD 1-10bn to build, although I'm sure someone much more well versed could dig up the exact figure.
Maybe you're right. There are not much of special urban hotels, for sure. However, I do think urban hotels can also be special and unique, but they're usually not, which I think primarily due to the budget constraint. For example, PHNY which occupies lower 25 floors of the One57, can become at least a bit special, if it occupies higher 50 floors of the One57 where you can have some views, and if it has all suites -each much larger than current suites- configuration. But if they're go for the higher 50 floors and all-suites route, the cost would reach the insane level for the hotel development. PHNY costs $390m for Hyatt, which works out $15.6m per floor, and $15.6m is not even close for the each of 70-90th floors. They have to shell out at least 3x more than that (because that's the amount Extell actually have charged for higher up condos), for the much smaller floors. That would probably pushes the development cost of the hotel beyond the $1b. If the hotel developer wants 10% ROI, that's $100m/y or a quarter of million profit per day, each suites should generate $1,369 profit (if there are 200 suites), which I think require at least $3-4k in RevPAR, and that would be translated into $4-5k in ADR.
And as for small sized resorts in rural areas, yes they're cheap. Amangiri only cost $125m for 30 or something suites, and many African luxury properties with about the same rate would be much cheaper to build, judging by the hardwares I've seen so far. But they're not the nobody-in-the-world-has-ever-seen kind of properties, as they're basically all over the world. Same goes for urban hotels. Typically, urban luxury hotels with 200-300 rooms would cost somewhere around $300-500m million and some of the relatively special one(e.g. Burj Al Arab) already cost $1b. Massive hotels with thousands of rooms (e.g. Marina Bay Sands, big Vegas hotels, etc) usually cost $1-5b to build, although only some portion of the money goes to the hotel. And I think, in any kind of product, you just don't get something that feels significantly or distinctively better unless you spend at least 3x more. Hence, I assume, $0.5b for hotels with a few dozen suites, $3b for typically sized urban hotels, $10+b for massive hotel are the bare minimum requirement to build something truly unique, that no body has ever seen. But that kind of hotel development cost doesn't make much sense financially, hence I believe it has to be something like a hobby of some super rich, not financially driven commercial properties.