The new Four Seasons in Mumbai illustrates the difficulties in building a new hotel project in a developing country, via the Financial Times.
[T]his week, after years of navigating red tape, the 202-room Four Seasons Mumbai became the first luxury hotel of its size to launch in the city’s south in about 20 years…
…Bureaucracy and a shortage of skilled workers make building hotels difficult – the opening of the Four Seasons was delayed by at least two years. The hotel needed 165 government permits – including a special licence for the vegetable weighing scale in the kitchen and one for each of the bathroom scales put in guest rooms. In the end, the hotel cost $100m (€64.5m, £51m), or about $500,000 per room, and prices – which start at $500 per night rising to more than $1,000 – reflect that.
Of course, bureaucracy raising the cost of new hotel construction limits the supply of rooms and raises their price. Reform would allow both more development and lower prices.