09/12/2023
Component of Development Budget for a 3 Star*** Hotel.
➡ Dry Cost:
• Material Cost
• Manpower Cost
• Equipment Cost
Dry cost varies from 55 ~ 65 % of the development cost.
➡ Indirect Cost:
• Supervision Cost
• PMV Cost
• Site Facilities
• Insurance & Bonds
Indirect Cost varies from 10 ~ 20% of the development cost.
➡ Construction Contractor Mark-up:
• Profit Margin
• OH
• Risk
Mark-up ranges 8 ~ 15% of the development cost.
⭕ Hard Cost:
= Dry Cost + Indirect Cost + Mark-up
➡ Soft Cost:
• Design Cost
• PMT
• Consultancies
• Marketing
Soft cost ranges from 5 ~ 8% of the development cost.
⭕ CapEx Cost:
= Hard Cost + Soft Cost
➡ Management Reserve:
• Contingencies
• Inflation
Management reserve varies from 5 ~7% of development cost.
⭕ Development Cost:
= CapEx Cost + Management Reserve.
Development Cost is the total of all costs incurred in the completion of a development.
