Figures and facts: Where it is profitable to build hotels in Ukraine and how much it costs

Стаття опублікована на сайті NV Business website.

Author: Artur Lupashko, founder of Ribas Hotels Group

It is possible to build a hotel in Ukraine during the war and quickly pay for it if you choose the right region.

Despite the war, I would like to remind you that Ukraine is the largest country in Europe by area with a high potential for tourist leisure: seaside recreation, mountain tourism, skiing, rehabilitation and health resorts, thermal springs, travel among the country's rich archaeological and religious history, expeditions to the Chernobyl zone, business tourism to centers of finance and production. There are 8 UNESCO World Heritage Sites in Ukraine.

All this gives the country the prospects of a quick recovery after the end of the war, as well as the return of international companies to Ukraine and the resumption of international tourism. And we need to prepare for this now. The construction of hotels in the western regions can now be a profitable investment, as there will certainly be demand and the market is showing a rise in price.

The cost of building a hotel in Ukraine

Ribas Hotels Group conducted a study, that determined that the cost of housing construction is increasing by +16.1% annually due to changes in the cost of building materials and labor, the introduction of modern technologies (panoramic glazing, hinged facade systems), autonomous and advanced engineering systems (heat pumps, generators, solar panels, air conditioning, ventilation, central vacuum cleaner).

Against the backdrop of a large supply, real investors' requirements for materials, public areas, and infrastructure are increasing, which leads to an additional increase in the cost of facilities.

On the visualization: Logos Home Apartment hotel (Yaremche, Ivano-Frankivsk region).

Thus, according to the Hotel Franchise Development Cost Guide, the price of construction and installation works (excluding the cost of land) in international hotels is currently as follows:

• Economy class hotels – $36,000-$65,000 per room
• Mid-market hotels – $51,000-$89,000 per room
• High-end hotels – $79,000-$281,000 per room

The cost of finishing and engineering:

• Economy class hotels – $23,000-$42,000 per room
• Mid-market hotels – $38,000-$73,000 per room
• High-end hotels – $55,000-$223,000 per room

The cost of furniture and equipment:

• Economy class hotels – $4000-$16,000 per room
• Mid-range hotels – $5000-$14,000 per room
• High-end hotels – $9000-$45,000 per room

Total costs of hotel construction:

• Economy class hotels – $63,000-$123,000 per room (16-20 m2)
• Mid-market hotels – $94,000-$176,000 per room (21-24 m2)
• High-end hotels – $143,000-$549,000 per room (28-32 m2)

The brand portfolio of almost every international hotel chain today includes options with service apartments or rooms with the possibility of a longer stay: Hilton Hotels & Resort (Homewood Suites), InterContinental Hotels Group (Staybridge Suites, Candlewood Suites), Accor Hotels (Adagio), Mariott Hotels (Residence Inn, Townerplace suites, Homes & Villas), etc.

It is worth noting that the cost of creating hotels/apartments managed by international hotel chains is on average 1.5-3 times higher than the cost of a Ukrainian product with a similar level of quality.

Read the rest of the story on the NV Business website.

Advantages of cooperation with Ribas Hotels Group in the development of development projects. Learn more by following the link.

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