$1m to build a hotel room
It can cost up to $1 million to build a single hotel room in Bermuda, with construction costs in Bermuda now ranging from $850 a square-foot up to $1,000 a square foot.
That’s inclusive of air conditioning, wiring, furnishings- everything within four walls, developers told us.
What’s more, one of the developers told us the electricity bill for a small contained hotel runs about $70,000 a month in the summer.
The figures show the sky-high construction and operating costs hoteliers and developers face when considering building in Bermuda, especially when compared to our competitors.
Tourism Minister Wayne Furbert said yesterday he accepted construction costs in Bermuda were “too high”.
He said he was been working to the lower costs for new hospitality development and was confident if his initiatives were successful, it would attract new development.
“We have been working with developers and the union to bring down the cost of construction which is pivotal to building new hotels,” Mr Furbert said (see more of Mr Furbert’s interview on Wednesday).
Cambridge Beaches president Michael Winfield agreed electricity was another massive cost for hotels in Bermuda.
“Electricity is one of those costs that are far higher in Bermuda than almost anywhere else. We are paying north of 30 cents a kWh. I know of no other competitive jurisdictions, even on small islands, where there costs are so high. It is a huge element of our cost structure.”
Mr Winfield added the cost per square foot for new build was “a multiple of at least two over competitive areas. And that is before the cost of land is incorporated. So in construction costs alone, we are starting at twice the cost of product than most other places.”
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