How Much Does It Cost to Run a Hotel Per Day?

On these assumptions, our illustrative 30-room boutique hotel spends about $3,900 per day to operate before GOP and about $4,600 per day once fees and fixed charges are included. Note that management fees and the reserve sit below GOP, so they overlap with the step from $3,912 to $4,632 rather than adding to it.

How Much Does It Cost to Run a Hotel Per Year?

Multiply the daily figure by 365. Our illustrative property spends roughly $1.43 million a year on operating costs before GOP ($3,912 × 365) and roughly $1.69 million a year on all costs down to EBITDA ($4,632 × 365). Scale the revenue assumption up or down, and the costs follow the same ratios, until fixed costs start to bite, which is where the next sections matter.

Per Room, Per Day

Divide by keys, and the same illustrative hotel costs about $130 per available room per day before GOP ($3,912 ÷ 30). That number is useful for comparing your property with your own budget year over year, but it hides the effect of occupancy. That is why operators also track cost per occupied room, covered below.

Hotel Operating Cost Breakdown by Department

The Uniform System of Accounts for the Lodging Industry (USALI) organizes hotel operating costs into departments. The free, department-by-department percentage tables are paywalled, so we focus on what the published research says about each cost line and how it is moving. CBRE's All Eyes on Operating Costs in 2025 (May 2025) studied a sample of 2,600 U.S. hotels and found that in 2024 "the expenses above GOP ... increased by 4.1% year-over-year," against 2.3% revenue growth. Costs are rising faster than the top line, which is the central challenge of running a hotel right now.

Staffing, Payroll and Employee Benefits

Labor is "the largest operating expense for a hotel," according to CBRE. In 2024, salaries, wages, and benefits rose 4.8%. Hours worked are "down 7.4% since 2019, while the dollars paid for compensation are up 22.1%."

CBRE's Robert Mandelbaum, quoted by Actabl (May 2025), puts it in revenue terms: "labor typically accounts for 30 to 40 percent of hotel revenue, or about half of total operating expenses." In a boutique hotel with a lean team, every role carries more weight, so scheduling and cross-training matter more than in a large property.

Rooms, Housekeeping and Guest Supplies

The rooms department carries housekeeping labor, linens, amenities and laundry, plus the cost of selling the room. CBRE found that agency commissions rose 6.0% in 2024, one of the faster-growing lines. For an independent hotel, the balance between direct bookings and third-party distribution shows up here every night.

Utilities, Maintenance and Property Operations

Maintenance rose 5.0% and utilities 2.0% in 2024, per CBRE. Older buildings and adaptive-reuse properties, which many boutique hotels are, can run higher here. Preventive maintenance is cheaper than emergency repair, and it protects the guest reviews that support your rate.

Technology, Marketing and Distribution Costs

Information technology rose 5.1% and credit-card commissions 4.4% in 2024. Franchise fees rose 3.9% for branded hotels. Independent hotels avoid franchise fees but must fund their own marketing, website, and booking engine. A well-designed technology stack keeps those costs contained instead of letting subscriptions sprawl.

Insurance, Property Taxes and Management Fees

Below GOP, the fastest-rising line in CBRE's study was insurance, up 17.4% in 2024. Property taxes rose 4.3% and management fees 1.1%. HVS puts a typical base management fee "ranging typically from 2% to 4%" of gross operating revenue, with an incentive fee of 8–10% of adjusted GOP (a European benchmark), in its review of hotel management contracts (European data). For the full fee picture, see our guide to hotel management company fees.

Food, Beverage and Additional Amenities

A restaurant, bar, spa or event space adds revenue and adds cost: cooks, servers, cost of goods and equipment. Many boutique hotels treat F&B as part of the brand story rather than a profit center. That can be the right call, as long as the owner knows what the amenity costs per day and what it adds to ADR.

What is the biggest operating expense for a hotel? Labor, by a wide margin. If you only manage one cost line closely, manage that one.

Operating Expenses as a Percentage of Revenue

Percentages are how owners, lenders, and operators compare hotels of different sizes. These are the benchmarks the cited research supports:

• 
  GOP margin: 34.8% of revenue in 2025 (CBRE via LODGING), so operating costs above GOP run about 65% of revenue
• EBITDA margin: 22.8% in 2025 (CBRE via LODGING)
• Labor: 30–40% of revenue, or about half of operating expenses (CBRE's Robert Mandelbaum via Actabl, 2025)
• Base management fee: 2–4% of gross revenue (HVS)
• FF&E reserve: 4.17% of revenue (HVS Canada, 2020)

Your own ratios will vary with service level, F&B, market, and building age. Track them monthly against budget and against your own history. For how these flow down to the bottom line, see our hotel net operating income benchmarks.

Fixed vs. Variable Hotel Costs

Not every dollar moves with occupancy. Splitting costs into fixed and variable is what lets you forecast a slow month accurately.

Costs That Stay the Same Regardless of Occupancy

• Insurance and property taxes
• Core salaried management and minimum staffing for front desk and security
• Base utilities, software subscriptions, and maintenance contracts
• Debt service and ground or building lease payments (below EBITDA)

Costs That Rise With Occupied Rooms

These variable costs scale with each occupied room:

• 
  Housekeeping hours, laundry and guest amenities
• Agency and credit-card commissions
• Incremental utilities and F&B cost of goods
• Revenue-based fees such as management fees and franchise fees for branded hotels

A boutique hotel usually has a higher share of fixed costs per key than a large hotel, because a minimum team is needed whether you have 15 rooms or 50. That is why occupancy and rate discipline matter so much in smaller properties.

Cost per Occupied Room and the Break-Even Formula

Daily Operating Cost per Available Room

Cost per available room = total daily operating cost ÷ total rooms. In the illustrative example: $3,912 ÷ 30 = about $130.

Cost per Occupied Room (CPOR)

CPOR = total daily operating cost ÷ occupied rooms. In the illustrative example: $3,912 ÷ 21 = about $186. Operators often calculate CPOR for the rooms department alone to judge housekeeping efficiency, and for the whole hotel to judge pricing.

Break-Even Occupancy

A simple break-even test: break-even occupied rooms = daily fixed costs ÷ (ADR − variable cost per occupied room). If, illustratively, fixed costs were $2,000 a day and variable cost were $60 per occupied room, a $250 ADR would need about 10.5 occupied rooms ($2,000 ÷ $190) to cover operating costs, or 35% occupancy in a 30-room hotel. Plug in your own numbers; the structure is what matters.

How Occupancy, ADR and RevPAR Affect Profitability

RevPAR (revenue per available room) combines occupancy and ADR. Because a large share of costs is fixed, each extra occupied room at a healthy rate drops a disproportionate amount to GOP. A rate increase drops through even more, since it adds revenue without adding housekeeping hours. This is why revenue strategy and cost control should be managed together.

Why Boutique Hotels Have Different Operating Economics

Staffing Efficiency and Smaller Room Inventories

With 15 to 50 keys, there is less room to absorb idle hours. Cross-trained teams, smart scheduling, and the right technology make a lean model work. Our overview of what running a boutique hotel involves day to day covers the roles in more detail.

Personalized Service and Amenity Expectations

Boutique guests pay for design, character, and service. Cut too deep, and you lose the premium that makes the model work. The goal is not the lowest cost per day; it is the best relationship between cost, guest experience, and profit.

Design is strategy here, too. Decisions made in the build or renovation phase, such as back-of-house layout, durable finishes, laundry on-site or outsourced, and energy-efficient systems, set the running costs for years. A beautiful lobby that needs two extra staff on every shift is a design choice with a daily price tag. The best boutique hotels are designed with the operating model in mind from the first sketch.

How to Reduce Hotel Operating Costs Without Hurting the Guest Experience

Cost efficiency in hotel operations is about precision, not austerity. Practical levers:

• Labor scheduling: forecast-driven schedules tied to occupancy and arrivals, not fixed rotas
• Distribution mix: shift share from commissioned channels to direct bookings
• Vendor oversight: rebid linen, waste, insurance, and software contracts annually
• Preventive maintenance: planned work orders instead of emergency calls
• Energy management: controls in unoccupied rooms and back-of-house areas
• Revenue management: a rate strategy that protects ADR, because rate drops straight through to profit

An owner who cuts housekeeping hours but loses review scores may lose more in rate than was saved. An owner who invests in direct marketing may raise costs on one line and still lift net operating income. Our boutique hotel operations framework explains how to judge the whole operation rather than each expense in isolation.

Startup Costs vs. Running Costs: Don't Mix Them Up

Owners sometimes blend two very different numbers. Startup costs are one-time: acquisition or construction, FF&E, pre-opening payroll, initial marketing, and working capital to carry the hotel until it stabilizes. Running costs are what this article measures: the recurring daily, monthly, and yearly expense of operating the hotel once the doors are open.

Keeping them separate matters for three reasons:

1. 
   Underwriting. Lenders and investors judge a hotel on stabilized operating performance. Folding pre-opening spend into year-one operating costs makes the business look weaker than it is.
2. Forecasting. Running costs follow occupancy and rate; startup costs follow the development or renovation schedule. They need different budgets and different owners.
3. Decision-making. When you know exactly what the hotel costs to run per day, you can test a renovation, a new F&B concept, or a rate change against a clean baseline.

A practical habit: keep a one-page daily cost report that shows revenue, operating costs above GOP, labor as a percentage of revenue, and CPOR for the previous day and month-to-date. If those four numbers are visible every morning, surprises at month-end become rare.

When Should a Boutique Hotel Owner Consider Professional Management?

Self-management works until it doesn't. The signs are familiar: costs rising faster than revenue, the owner covering shifts, no clear daily cost report, and rate decisions made by instinct. Our guide on when boutique hotels outgrow self-management walks through the trade-off, including what a management fee costs against what better operations can return.

This is where vision meets execution. Roam Hospitality manages independent and boutique hotels from 15 to 50 keys and larger, combining hands-on operations management, revenue strategy, and in-house marketing under one roof. We look at your full P&L, not one line at a time, and focus on measurable results: GOP, NOI, and long-term asset value.

Know what your hotel costs to run, and what it should be earning. Partner with Roam Hospitality for a review of your property's operating costs.



Frequently Asked Questions