Ferrari
VIP
Building a hotel in Somalia. Estimate the cost?
- Thread starter Ferrari
- Start date
Ferrari
VIP
when did he build it and did he build it inland or near the coast?I know an adeer of mine in bosaaso who built one for 300k
I am guessing i should expect double that if i want to build a decent hotel right on the shores.
i thought it was going to be more.
At least over 5 years ago and its inland
Ferrari
VIP
thanks sxb. i expect things have changed by now.
Ferrari
VIP
sxb it's a group of us right now. we are going for glory.
we need something that'll bang. it's still far into the future so just doing some research for now.
we still haven't decided who our customers will be. I expect peace to improve and once it does, we'll milk foreigners.
unfortunately saxib you cant build on the beach in Kismayo because of Alshabab. Some Mx built a decent hotel (mecca hotel) not long ago but they had to close off the beach area with tons of fencing due to AS fears who are known to use boats around that area. People still rarely went there it was probably the least attended Hotel I have seen in Kismayo.
I would suggest maybe building on the beach and fencing it for now whilst building a rooftop area that people could eat from and still sea the ocean. Mecca hotel has a chance to do that but I am not sure why they refuse they have similar hotels across Somalia.
Another thing to consider is the food, every hotel in Kismayo offers the most tasteless food but somehow they get away with it. A major part of the revenue for these hotels in Somalia is the constantly full restaurant area that is used by the government workers and business men for essentially low level FKD.
As for an estimate its hard to say as I have never done a project like this but around 500k doesn’t sound far off.
I wish you the best of luck maybe I will be your guest one day in your grand hotel make sure you give me a discount.sxb it's a group of us right now. we are going for glory.
we need something that'll bang. it's still far into the future so just doing some research for now.
we still haven't decided who our customers will be. I expect peace to improve and once it does, we'll milk foreigners.
Ferrari
VIP
Thanks for the information sxb. i am counting on a post AS world three to four years down the road.
Insha’Allah
Ibrahim hassan
Esteemed Excellency
Hotels are overcrowded business. Why not a small fishing company or something else that makes something worthwhile?
Basing this on realistic Mombasa prices:
$1,500-2,000/SQ meters in pure construction costs (materials, labour & logistics)
Goes way up once you go beyond 5 floors.
Land costs, planning permissions & infrastructure costs might double it since everything is overpriced in Somalia for some reason.
Small 20 bed hotel should cost over 1 million...
Might be due to building code in Kenya and a Somali building might come out cheaper.
However there's no financing in Somalia unfortunately.
No leverage means it'll take longer to recoup returns.
20 bed * 80% capacity * $30/night = 170,000/yr total turnover.
With at least 30% going towards running costs you're left with nearly 120k before tax.
12% returns isn't bad but doesn't justify the risk to your money.
$1,500-2,000/SQ meters in pure construction costs (materials, labour & logistics)
Goes way up once you go beyond 5 floors.
Land costs, planning permissions & infrastructure costs might double it since everything is overpriced in Somalia for some reason.
Small 20 bed hotel should cost over 1 million...
Might be due to building code in Kenya and a Somali building might come out cheaper.
However there's no financing in Somalia unfortunately.
No leverage means it'll take longer to recoup returns.
20 bed * 80% capacity * $30/night = 170,000/yr total turnover.
With at least 30% going towards running costs you're left with nearly 120k before tax.
12% returns isn't bad but doesn't justify the risk to your money.
A modern 30-50 flat western condo like hotel would run up to half a billion. It would be up to western standards and not third world standard.
