The economics of hotel FF&E: what furnishing really costs

In a typical hotel investment, FF&E — furniture, lighting, textiles and loose equipment — takes 15 to 25 percent of the whole budget. It is the line investors most often estimate last, when there is nothing left to move money from.

For a four-star hotel with a hundred rooms, the FF&E budget usually lands around 1.2 million euro. It breaks down roughly like this: furniture 45 percent, textiles 25 percent, lighting 15 percent, bathroom fittings 10 percent, decoration and art 5 percent.

In the standard model there are usually three middlemen between the fabric manufacturer and the hotel. Each adds a margin, and the investor pays the sum of all the mark-ups. A set that costs 125 euro in our model can cost 175 euro through a chain of intermediaries.

With textiles at 20 to 30 percent of the FF&E budget, that difference stops being cosmetic. Across a whole property it is the amount you would furnish more than a dozen rooms with.

Budget textiles last three or four years. Premium ones seven to ten. For a hundred rooms at fifteen linear metres of material each, that comes to 60 thousand euro over a decade for the cheap option against 42 thousand for the durable one.

Thirty percent of the saving comes not from the purchase price but from the number of replacements. On top of that sit the costs nobody puts in the table: rooms taken out of sale during replacement, and guest reviews from the period when the furnishings are already falling apart.

At large scale and with unusual solutions, an in-house workshop stops being a question of price and becomes a question of feasibility. With the 238 apartments at Swissôtel Damian Jasná, three European workshops turned the job down before we took it on.

The second benefit is the deadline. When production sits in the same team as the design and the installation, a supplier delay does not move the opening date, because there is no external supplier.