Hotels to homes – the repurposing challenge

As we have discussed in our recent report, Repurposing on the Radar, we are seeing repurposing trends take place across the Asia-Pacific region.

One of the sectors that have seen the greatest level of participation in repurposing is the hospitality sector. Without international travel generating tourism, many markets’ hotel sectors are now only seeing a fraction of its demand generated in pre-Covid times.

With the various variants of Covid-19 prolonging the pandemic across the globe, we are likely to see this sector struggle for longer. As such, the repurposing of hotel assets can improve the prospects of these underperforming properties.

Here are some examples of sectors that bears potential for hospitality assets to repurpose to.

Hospitality to residential

Repurposing hotels to residential assets is a natural fit. High-rise hotels can be turned to high-rise apartment complexes, for example. In many cases, hotels located in advantageous locations throughout cities attractive to tourists can also be attractive to home buyers looking for luxurious living in the heart of urban locations.

Furthermore, there is potential for owners to leverage on existing hotel brands to pivot their assets to branded residences. These residential developments are integrated or linked to hotel brands, and they benefit from the quality-assured branding, management and services associated with the brand themselves.

Hospitality to co-living

Like repurposing hotels to residential assets, co-living being part of the living sector makes repurposing simple. Many amenities provided by hotels are also relevant and beneficial to co-living, such as swimming pools, recreational facilities, dining spaces and more.

The co-living sector is also relatively nascent in many parts of Asia-Pacific, but the concept is taking root and there is much room to grow and for willing players to take part in.

Hospitality to offices

Many hotels have been positioned to capture the demand of business travellers, providing facilities such as function rooms, meeting rooms and other event spaces. This means that the only works necessary to convert these hotels to offices may just be to combine hotel rooms into larger spaces, fitting the mold of more typical office floorplan layouts.

Furthermore, across Asia-Pacific, many markets are seeing supply and demand mismatches, and there exists opportunities for owners and investors to fill in the gap by identifying struggling hotel assets and repurposing them to either have partial office aspects or completely turn into an office.