Hotel investment is shifting away from new builds to remodelling existing spaces. Across Europe the pattern has become clear as rising construction costs, limited available land in prime urban and coastal zones, and tightening environmental rules push capital towards the adaptation of structures that already stand. Investors now favour projects that rework historic convents, obsolete offices, mid-century landmarks and tired resorts because these routes deliver faster returns, lower embodied carbon and access to locations that new construction can rarely secure.
Spain’s convents and coastline conversions
In Spain the preference for conversion shows itself in both city centres and mature beach destinations. Empty office blocks, former banks and historic convents are being turned into luxury city hotels. The Radisson Collection Edificio Generali in Madrid takes the city’s historic Generali Building and converts it into a high-end property complete with a panoramic rooftop bar. In Seville a project valued at around €80m adapts a historic structure into a luxury hub under the Four Seasons brand.
The Kimpton Convento de San Agustín in Andalucía restores a historic convent while preserving its ancient archaeological remains, and Meliá’s Hotel Madre de Dios converts an old convent into a boutique hotel. On the coast, owners of older properties inject capital to lift them into higher tiers. The Palace, a Luxury Collection Hotel in Madrid, once the Westin Palace, received a €90m renovation that restored its 1912 stained-glass dome and modernised all 470 rooms.
In Benidorm the former Hotel Calas Marina became the ibis Styles Benidorm Cala Marina through a complete remodelling that introduced a design-led midscale concept. In Tenerife the Bahía del Duque and Las Villas properties underwent multi-million euro work focused on guest rooms, energy efficiency and eco-luxury standards. These schemes bypass zoning constraints that would delay or prevent greenfield projects and unlock value already present in central and coastal sites.
Portugal’s monasteries and modernist monstrosities
Portugal follows a parallel course. High building costs, strict urban zoning and sustainability targets make the upgrading of existing assets more attractive than starting from raw land. Investors target historic palazzos, mid-century landmarks and established resorts to raise average daily rates. The Four Seasons Hotel Ritz Lisbon, a 1950s modernist landmark, completed a phased interior overhaul across rooms and public areas while an organic outdoor pool was added. The Bairro Alto Hotel integrated multiple 18th-century adjacent buildings, retaining historic façades and inserting contemporary local crafts.
Hotel Mundial, the 1958 modernist property in Lisbon’s Baixa district, received a comprehensive revamp of guest rooms, lobby and ground-floor street interactions. In the Algarve the Robinson Quinta da Ria carried out multi-phased guestroom modernisations and structural upgrades. Adaptive reuse projects further illustrate the trend. Locke de Santa Joana in Lisbon repurposed a 17th-century former convent into a 370-room hotel that blends historical wings with modern studio rooms and a pool. Six Seasons Lisbon converts the 17th-century Palácio Lavra and the adjacent Palácio de Pedrosas into a 114-room hotel. Andaz Lisbon turns the former corporate offices of a major Portuguese bank into a multi-building boutique hotel.
The national Revive programme leases abandoned state-owned properties such as the Monastery of Arouca and the Fortress of Juromenha to private investors for conversion into upscale hotels. Rural and coastal work includes the transformation of a historic Douro Valley estate containing one of the region’s oldest farmhouses and a granite wine warehouse into a 12-room luxury boutique hotel, and the conversion of a 1940s family home into the nine-suite Casa Modesta on the edge of a coastal lagoon. These interventions keep original character while meeting modern demand and avoiding the delays of new planning permissions.
Stamping France’s Post Office conversion
France presents similar drivers. Capped new supply in major cities keeps development pipelines below 2 percent of total inventory, while high financing costs and environmental rules such as the Le Meur Law link business licences to energy performance. Investors therefore concentrate on value-add repositioning and adaptive reuse. Hôtel du Couvent in Nice transformed a 1604 Franciscan convent into a luxury hotel at a cost of approximately €104m, restoring the existing cloister and courtyard rather than altering the historic architecture.
Hôtel Madame Rêve in Paris converted a massive 19th-century post office, formerly France’s largest, into a five-star hotel on Rue du Louvre while keeping its iconic structural frame intact. Aloft Dijon took an outdated regional post office and turned it into a lifestyle hotel aimed at the bleisure market. Hilton Paris Eiffel Tower converted a corporate property near the landmark into 118 modern guest rooms. Legacy assets receive deep renovations. Six Senses Loire Valley remodelled a historic château into a 50-room luxury retreat.
Dream Hotel Opéra became Le Théorème in Paris through a complete top-to-bottom remodel that added a glass-roofed common area, a hammam and high-end suites while the hotel remained open. Hôtel Crillon le Brave in Provence expanded by buying and restoring three historic village houses to add ten rooms. In alpine resorts such as Courchevel and Méribel older premium hotels build underground wellness areas into raw limestone caves rather than expanding their mountain footprints. Office-to-hotel conversions by groups such as Covivio allocate hundreds ofms of euros to obsolete urban office buildings, delivering higher yields from existing real estate.
Checking out Germany’s department store
Germany’s pipeline of new hotel rooms has fallen by more than 50 percent since 2020. Transformation and conversion projects now account for roughly one-third of all new rooms entering the market. Office and retail vacancies supply the raw material. Union Investment converted the former Deutsche Pfandbriefbank offices in Frankfurt into a 93-room B&B Hotels property for around €10m. In Osnabrück a former Sportarena retail department store was gutted and remodelled into a hotel. A post-war office tower in Frankfurt’s centre became a mixed-use property featuring a 200-room hotel. Legacy and heritage hotels receive high-end makeovers.
The Florentin in Frankfurt, formerly the Villa Kennedy, was fully remodelled into a high-end luxury destination with updated designs and a presidential suite. Grandhotel Hessischer Hof underwent extensive refurbishment that modernised operations while preserving historic elements such as its iconic pub. Hotel Schloss Reinhartshausen, a boutique castle estate along the Rhine, received complete architectural restoration before relaunch under a major global brand. Brand takeovers accelerate the process.
Leonardo Hotels acquired four IntercityHotels in Nuremberg, Freiburg, Magdeburg and Erfurt, operating them temporarily before full renovations under the Leonardo name. Limehome converted a former Ibis hotel in Jena into tech-driven apartment-style lodging and re-engineered corporate office assets in Bremen. The older Leoso-Hotel in Leverkusen was updated and rebranded as a Delta Hotel by Marriott. These approaches reduce financial risk, secure prime locations that new builds cannot reach, and satisfy lenders who favour the lower carbon profiles of reused structures.
Renewing 1960s resorts in Greece
Greece’s shift is shaped by a fragmented family-owned asset base, stricter island building rules under the new Spatial Planning Framework, and institutional capital seeking value-add opportunities. New off-plan construction is limited in heavily developed tourist areas, so investors acquire and remodel existing properties.
Conrad Athens, formerly the Hilton Athens on Vasilissis Sofias Avenue, is receiving more than €350m to become a mixed-use luxury hub combining Conrad rooms and Waldorf Astoria residences. Mitsis Group committed more than €250m to gut, rebrand and modernise 17 existing resorts, converting traditional rooms into luxury suites with terraced swim-up pools. Aldemar Knossos Royal in Crete, acquired for roughly €80m, entered a multi-year phased remodel.
Blackstone’s Hotel Investment Partners platform deployed more than €500m acquiring and remodeling family-run properties across Corfu, Zante and Crete into five-star destinations. Industrial adaptive reuse appears in projects such as MGallery Chania, which transforms a 19th-century olive oil factory into a 198-room hotel, and Dexamenes Seaside Hotel in the Peloponnese, remodelled from a post-war abandoned winery so that guests sleep inside minimally modified concrete wine tanks on the beach.
The Greek government tenders historic modernist Xenia hotels from the 1960s for private restoration. In central Athens and Piraeus older commercial office spaces from the 1960s to 1980s are converted into serviced apartments or boutique hotels, supported by Golden Visa rules that retain lower entry thresholds for restoring historical properties and converting industrial buildings. These strategies shorten time to market and reduce environmental strain on islands already managing water and grid constraints.
Scandinavia and England: more post offices
Scandinavia displays the same logic under high construction costs and strict municipal environmental, social and governance standards. Villa Copenhagen converted Denmark’s 100-year-old Central Post Building into a 390-room luxury hotel, preserving historic architecture while adding a rooftop pool and sustainable amenities. Scandic Hotels Group extensively transformed the iconic Malmen and Sjöfartshotellet properties in Stockholm, overhauling guest rooms and ground-floor social spaces within existing structural envelopes.
Hotel Kämp in Helsinki integrated the adjacent historic Helander House, expanding with new luxury suites, a restored façade and upgraded climate control while retaining classical moulding. Cori Hornbæk Hotel in Denmark restored a classic 1930s coastal badehotel to its original seaside heritage while retrofitting interiors for year-round wellness. Modernisation of legacy urban assets and historical landmarks therefore replaces greenfield construction as the dominant route.
In England, rising construction costs, stringent sustainability goals and high vacancy rates in secondary office spaces make upgrading existing real estate more viable. Custom House in London is approved for transformation from a government office building into a luxury 179-room hotel. MCR Hotels acquired the Grade-II listed BT Tower for approximately €320m to convert the landmark into a hospitality destination. Kirklevington Hall in Teesside received approval for a scheme valued at approximately €38m to convert a traditional country house hotel into an upgraded luxury boutique property with spa and event pavilions. These projects deliver faster timelines and lock in prime locations already occupied by existing structures.
Ireland’s hotels reworking Georgian grandeur
Closer to home, Ireland mirrors the continental pattern. High building costs, strict planning laws and local development fees discourage new builds, so capital flows into remodelling, extensions and green energy upgrades.
Tempo by Hilton in Belfast is turning a former city-centre office building into a 144-room hotel. Plans have been filed to transform a closed historic Ulster Bank branch on Baggot Street Lower in Dublin into a high-end boutique hotel. The Springhill Hotel in Kilkenny underwent a €10m transformation into a sustainable design-forward venue. The College Green Hotel, formerly the Westin Dublin, received €10m for remodelling public areas, luxury suites and the addition of 19 bedrooms. The Morrison Hotel underwent a €5m interior overhaul after acquisition by Zetland Capital.
Dromoland Castle in County Clare is scheduled for a multi-million euro overhaul of accommodations, public spaces and a glass-enclosed atrium courtyard. The Dunloe Hotel and Gardens in Killarney reopened after an €18m transformation of restaurants, lounges and bars. Killarney Park Hotel commenced a multi-million euro programme to refurbish bedrooms, suites, spa and garden areas.
Lough Rynn Castle Hotel launched a €22m expansion adding 51 bedrooms and an outdoor pool to the existing estate. Hotel Kilmore in Cavan completed a two-storey extension adding 36 bedrooms, a gym and upgraded conference rooms alongside a lobby remodel. Commercial conversions, such as late Georgian buildings on South Terrace in Cork turned into an extended-stay aparthotel, further illustrate the preference for working with what already exists.
Turning old elegance into new hospitality
There is a pattern to all of this. The preference for remodelling rests on practical advantages that hold across borders. Renovating an existing structural shell shortens construction timelines compared with starting from raw land. Spain’s Sustainable Tourism Strategy and similar frameworks elsewhere reward green designs with tax credits or favourable financing, and the reuse of stone walls or existing footprints immediately lowers carbon emissions relative to new concrete pouring. Prime locations in Madrid, Barcelona, Lisbon, Paris, Frankfurt, Athens, Copenhagen, London and Dublin are already occupied; buying and updating an existing building is frequently the only practical route into those sites.
Office vacancies, rising in many European cities after shifts in working patterns, supply ready shells in downtown districts. Heritage rules that protect façades and archaeological remains can be satisfied more readily through careful restoration than through demolition and replacement. Institutional capital therefore allocates larger shares of portfolios to value-add and adaptive reuse strategies, judging that predictable budgets, shorter periods before revenue begins and lower environmental impact outweigh the complexities of working with older fabric.
There si a pattern. In Spain adaptive reuse of offices, banks and convents unlocks hidden value while repositioning of outdated three-star and four-star hotels lifts them into the luxury tier. In Portugal the Revive programme and private conversions of convents, banks and farmhouses achieve comparable results. French projects demonstrate that office-to-hotel conversions and château remodelings can proceed even under strict energy-performance rules. German figures indicate that one-third of new room supply now arrives through transformation rather than ground-up building. Greek institutional acquisitions measured in hundreds ofms of euros focus exclusively on existing resorts and industrial sites.
Scandinavian, English and Irish examples confirm that historic post offices, towers, castles and Georgian buildings can be brought to modern standards without the land-acquisition and zoning hurdles that accompany new construction. Across these markets the combination of cost inflation, regulatory constraint and sustainability pressure has realigned capital allocation. The result is a European hotel landscape in which the most active investment occurs inside the walls of buildings already standing.
