In early 2024, we examined the emerging trend of office-to-hotel conversions and identified two fundamental challenges that would determine whether schemes succeeded or failed. Two years on, the trend has accelerated. With more than 3 million sq ft of office space reportedly acquired for potential hotel conversion in the past two years alone, investors and operators are increasingly repositioning surplus commercial stock to meet evolving demand. The drivers are structural: persistent vacancy in parts of the office market, strong performance in select hospitality segments, and growing pressure to reduce embodied carbon through adaptive re-use rather than demolition. As pressure increases to extend the life of existing assets, conversion is being viewed not only as a commercial repositioning strategy but also as a carbon-conscious one.
While the opportunity is clear, the delivery risks remain significant. The technical realities of existing buildings mean that conversion is rarely straightforward - and assumptions made too early can quickly undermine viability. The two greatest challenges remain the same.
Challenge One: Maximising Layout
The first step in any office-to-hotel conversion is to maximise layout efficiency while maintaining the quality aspirations of the finished product. That balance is heavily influenced by the shape and form of the existing building, in particular:
- Floor plate width - Deep floor plates can create difficulties in avoiding windowless rooms albeit this is less of a taboo in recent years depending on brand positioning. Nevertheless, access to natural light remains a key driver of room value and guest experience.
- Window positioning - Existing window locations will strongly dictate bedroom layouts and corridor arrangements. Regularity (or irregularity) of façade rhythm can materially influence net room count and operational efficiency.
- Floor-to-ceiling heights - Clear heights are critical. Hotels demand a significantly greater density of MEP services than offices. Sufficient vertical space is required to accommodate ductwork, pipework and cabling without compromising room proportions or acoustic performance.
- Core size and location - The position and scale of cores influence guest circulation, back-of-house flow and goods/service lift efficiency. Travel distances must comply with regulations while also supporting smooth hotel operations.
Key Takeaway: Working with an architect experienced in hotel design is crucial. Understanding the flow between public areas and back-of-house facilities - and striking the right balance between operational efficiency and spatial quality - is often what unlocks a workable and commercially viable design.
Challenge Two: Benchmarking
Once layout feasibility is established, cost viability becomes the defining factor and this is where significant errors can occur if broad-brush assumptions are applied. Benchmarking is an important tool in early-stage feasibility, but conversion projects carry risks that standard new-build cost data cannot adequately reflect. The complexity lies primarily within the shell and core.
These challenges include:
- Thermal Upgrades - Adaptive re-use typically involves older buildings. Depending on façade construction and age, substantial thermal upgrades may be required to meet current Building Regulations and performance standards. Solutions such as secondary glazing or internal insulation can impact net internal area, room layouts and façade aesthetics - all of which have commercial implications.
- Acoustic Upgrades - Hotels require significantly higher acoustic performance thresholds than offices. External noise mitigation may be required, particularly in city-centre locations. Additionally, floor-to-floor and room-to-room acoustic separation can become problematic where existing structural elements are retained. Remedial works can be both technically challenging and costly.
- Fire Separation - This is often the most critical risk factor. A change of use from office to hotel requires a materially higher level of fire protection due to increased occupant vulnerability and overnight use. Structural elements may require upgraded fire resistance through spraying, boarding or other interventions. The solution adopted can affect ceiling heights, aesthetics and overall buildability - and therefore viability. In the current regulatory climate, with heightened scrutiny around life safety and compliance, this aspect demands early and rigorous due diligence.
- Riser Formation - Hotel guestrooms require frequent vertical risers - ideally one per two bedrooms. The ease and cost of forming risers depends entirely on the existing structural system. Reinforced concrete frames are typically simpler to adapt. Post-tensioned slabs, by contrast, can present significant technical and financial complications. In older buildings with hollow pot floors, creating even a modest riser opening (for example 1m x 1m) may require a much larger section of floor to be removed and reconstructed, materially increasing cost.
- The Benchmarking Risk - When these shell and core factors are overlooked or oversimplified, benchmarking can become dangerously misleading. It is not uncommon for an office-to-hotel conversion to cost more than a new-build hotel - something that feels counter-intuitive but is frequently borne out in practice. This is particularly relevant in today’s market, where capital costs, regulatory compliance and life-safety requirements have materially increased the complexity of working within existing structures.
Key Takeaway: Benchmark data remains valuable, but its application must be nuanced. Fit-out costs can be benchmarked with reasonable confidence. Shell and core interventions, however, must be assessed building-specifically and informed by detailed technical investigation from the outset.
Conclusion
Office-to-hotel conversion is not simply a change of use — it is a structural re-engineering exercise combined with a commercial repositioning strategy. Success depends on understanding the inherent constraints of the existing building before value assumptions are locked in. Layout efficiency, servicing strategy, fire protection and structural adaptation are not secondary considerations — they are the determinants of viability. With informed due diligence and specialist expertise, adaptive re-use can unlock both embodied carbon savings and long-term asset value. Without it, schemes can quickly erode margin.
As the market continues to reposition surplus office stock, the fundamentals outlined here remain central to delivering commercially resilient hotel conversions.
How G&T Helps
G&T brings specialist expertise in hotel delivery, cost intelligence, and adaptive re-use strategy. Our experience spans both new-build and complex conversion projects, allowing us to advise clients on feasibility, risk mitigation and long-term asset optimisation from the earliest stages.
To learn more about our experience in this space, explore our case studies:
For further discussion, please contact Theo Constantinides.
Hero image courtesy of © Grain London Ltd
