The Cost of Good Hotel Design

Good hotel design is far more than the creation of a visually appealing building.

Hotel Room with Mountain View - Image by AI

It is a strategic investment that determines how efficiently a hotel will operate, how memorable the guest experience will be, and how strong the property’s market position becomes over time.

A hotel is a unique type of development because it produces a combination of physical products—rooms, facilities, amenities—and non-physical products, such as service quality, comfort, ambiance, and guest satisfaction. These elements must be orchestrated through thoughtful design that understands both the business and operational nature of the hotel.

Unlike residential or commercial buildings that are handed over and largely completed once construction ends, a hotel is a 24-hour operational ecosystem. It only comes to life once guests begin checking in, staff begin delivering service, and all facilities operate continuously every day of the year.

This unique characteristic means that design cannot focus solely on aesthetics. It must anticipate circulation flow, zoning, safety, energy usage, maintenance needs, and most importantly, how guests and staff interact with every part of the building.

Poor design choices can result in chronic inefficiencies—such as crossing between guest and staff paths, insufficient storage, kitchens placed too far from restaurants, or back-of-house areas that are too small to support smooth operations. These errors might seem small on paper but create long-term operational challenges and increased costs.

Because of this complexity, hotel design requires consultants who truly understand hotel operations. Architects, interior designers, structural engineers, mechanical and electrical specialists, landscape designers, and quantity surveyors must collaborate to shape a product that is both functional and competitive.

In many cases, hotel operators also provide technical assistance during design development to ensure that brand standards, operational requirements, and spatial efficiency targets are met. This collaborative process helps create the hotel’s DNA—its unique identity, character, atmosphere, and guest experience.

Once this DNA is established during the design stage, it guides every detail of the project, from room layout to lighting concepts, from material selection to back-of-house planning.

A common misconception among developers is that design fees should be minimized. However, industry experience shows that good design typically costs around 5–7% of the total project budget, while its impact extends to nearly 100% of the hotel’s operational value. Cutting design costs often means hiring the cheapest consultants, which may lead to generic or poorly planned layouts that ultimately reduce revenue potential, increase staffing needs, or limit the guest appeal of the property. In other words, savings made at the design stage can translate into far greater costs once the hotel begins operations.

On the other hand, a well-designed hotel creates significant value. Efficient room layouts optimize space without compromising comfort. Thoughtfully planned back-of-house areas improve staff productivity and reduce wasted movement. Strong interior concepts create emotional impressions that enhance brand identity and guest satisfaction.

Smart spatial planning reduces construction costs and energy consumption while improving long-term maintenance efficiency. Even simple creative decisions—such as innovative bathroom layouts or integrated lighting strategies—can elevate the perceived quality of a room without increasing construction budgets.

Ultimately, the cost of good hotel design is an investment, not an expense. It shapes the hotel’s operational efficiency, cost structure, competitiveness, and revenue potential for decades. A hotel built on poor design will struggle no matter how strong its marketing or service efforts may be. But a hotel built on thoughtful, well-executed design has the foundation to deliver memorable experiences, consistent performance, and sustainable financial returns.

Good hotel design does not simply make a building look attractive—it makes the business work. And in the hospitality industry, that difference is everything.

Written by Ojahan Oppusunggu

Director of Technical & Technology, Artotel Group