Guest Post: The Hotel conversion boom

Frank Esmeijer, vice president of development at Bob W, shares the importance of turning ageing hotels into tech-driven serviced partments

Across Europe, a decisive shift is taking place in hospitality real estate. Rising construction costs, operational pressure and a market that is far less forgiving of inefficiency are forcing investors and operators to ask a simple question: why build new, when so much of the right stock already exists?

The surge in conversions we’re seeing today, particularly of ageing, independently owned hotels into tech-enabled serviced apartments, flows directly from that question. What was once a niche strategy has quickly become one of the most resilient and repeatable models in European hospitality.

Why Europe’s legacy hotels are ripe for repositioning

Europe is uniquely positioned for this trend. Much of its hotel stock is old, fragmented and family-owned, often built decades ago and rarely designed for today’s operating realities. Thousands of so-called “mom and pop” hotels are now facing rising labour costs, mounting capex requirements and, in many cases, no clear succession plan.

The result is a growing pool of well-located, hospitality-zoned assets that are operationally outdated, but structurally sound.

For professional operators, like Bob W, this creates a deep and expanding pipeline of conversion-ready buildings. These assets don’t need to be reinvented from scratch, they just need to be rethought.

From staff-heavy hotels to service-light operations

The biggest challenge with many older hotels isn’t just their physical condition. It’s the operating model baked into them.

Traditional hotels are labour-intensive by design. Front desks, daily housekeeping and food-and-beverage operations add complexity and fixed cost.

Tech-enabled serviced apartments offer a fundamentally different approach. By removing friction from the guest journey and replacing manual processes with digital systems, it’s possible to materially reduce overheads while improving consistency.

Guests check in when it suits them. Support is delivered remotely, 24/7. Buildings run on streamlined systems rather than large on-site teams. It’s a simpler business and, crucially, a more resilient one.

That resilience increasingly shows up at exit. Amenity-light, tech-led serviced apartment assets typically trade at sharper yields than traditional hotels, reflecting their lower operational risk. 

When I look at an old hotel today, the task isn’t just about refurbishing rooms. It’s about flipping a staff-heavy, old-fashioned operation into a tech-driven, self-service model, both physically and operationally, end to end.

Why faster transitions matter more than ever

One of the most underappreciated benefits of this model is speed.

Service-light, tech-enabled operations are inherently flexible so assets can be transitioned far faster than under traditional hotel models. In many cases, buildings can be taken over and be open to guests in a matter of days rather than months.

That flexibility matters. It reduces downtime, protects income for owners and allows assets to stabilise quickly in uncertain markets. 

Just as importantly, an agile operating model allows far greater flexibility on the real estate side. Service-light platforms can work across a wider range of building sizes and property types: from small, irregular assets to mixed-use or non-institutional stock, without relying on scale or volume to make the numbers work.

Why capital is following the serviced apartment model

Investor appetite has followed, with serviced apartments outperforming traditional hotels in recent years, delivering stronger operational margins and more stable cash flows. When that is combined with a tech-driven operating platform, the margin story becomes even more compelling.

In an uncertain economic climate, many owners are favouring long-term leases over traditional management contracts. Leasing offers predictable income and downside protection, an approach that has been especially prominent in markets such as Germany and the Nordics.

Reuse over new build

Rising construction costs and planning bottlenecks have further accelerated the conversion trend.

Across Europe, labour shortages, material inflation and complex permitting processes have made ground-up development slower and more expensive than ever. Conversions, by contrast, offer lower upfront capex and faster delivery, a decisive advantage in cautious capital markets.

They also bring clear environmental benefits. Reusing existing buildings can avoid 50–75% of the embodied carbon associated with new construction, making adaptive reuse not just a financial decision, but a sustainability one.

Guest expectations have already shifted

Today’s travellers are comfortable with self-service, digital communication and frictionless stays, and often prefer them. Waiting ten minutes at a front desk no longer feels like luxury; it feels outdated.

Tech-enabled serviced apartments align naturally with these expectations. They offer space, autonomy and hotel-grade consistency, and in many cases they are better suited to older buildings than traditional hotels ever were.

Crucially, amenity-light does not mean lower guest satisfaction, quite the opposite. Well-designed, tech-enabled serviced apartments consistently outperform expectations on review scores, precisely because they focus on what guests actually value.

What this means for the industry

Ageing hotel stock, shifting guest expectations and pressure on operating margins are not temporary conditions. 

Hotel-to-serviced-apartment conversions offer a practical response. They allow existing buildings to be brought back into productive use faster, with lower capital risk, stronger operational resilience and a guest experience that reflects how people actually travel today.

This is not about stripping hospitality back. It is about removing friction, complexity and cost where they no longer add value, and reinvesting that effort into better design, better systems and better outcomes for owners and guests alike.