Everyone expects their business in the hospitality and tourism sectors to do well. But the pandemic changed everything says Maxwell Drever. Hotels that ran at full capacity and had high occupancy rates started struggling to survive. Some even closed their doors for good. Such external forces compel businesses to take a drastic, creative approach, which would have been slow otherwise. However, permanently closed hotels can come in handy to solve another crisis, such as the affordable housing shortage for the working class. Is it the right time to consider this idea? Hotel owners can hesitate to take this call alone because of their industry focus. The residential real estate market works differently.
However, experienced housing sector players like Galen and Maxwell Drever can guide them to attain desired goals while addressing the needs of a significant segment of society.
Things hotel owners may not know about conversions
Hotels contain rooms and suites that can quickly turn into studios with all the basic amenities required for daily life. Some may not offer kitchens. However, redeveloping hotels into affordable homes tends to be less demanding than new construction. Hence, it has become an opportunity for hotel owners to revive their revenue even with small investments. But they have to understand the other realty market well to succeed. Knowing certain factors can prove helpful for them.
Under certain circumstances, hotels enjoy the right to convert under zoning rules. However, changing into affordable housing requires prior permission from the local governing agencies. These determine what they can implement in their assets, such as the total number of rooms, parking, amenities, etc. The hotel owners may have to present a comprehensive plan before them. Since it tends to be a vital component, expert opinions and mentoring come in handy in this area.
You have to evaluate your property to understand its suitability for such conversions. The industry specialists affirm that converting hotels into residential units is simpler than any other real estate for different reasons. One of them is the hotel width that matches the residential requirements. Secondly, two rooms can combine into one-bedroom and three into two-bedroom apartments. The shallowness of the hotel rooms allows an excellent flow of daylight. Then, the rectangular layouts of the hotel reduce building cost as one need to copy the same format throughout. Still, proper inspection is necessary to understand what to modify and to what extent.
The affordable multi-family homes generally offer long-term tenancy benefits says Maxwell Drever. Due to this, you don’t have to worry about commuter patterns. They will likely have the same traveling style. Some may not even need parking, or their demand can be pretty low. Anyway, a fair assessment of every aspect of the hotel and its potential as repurposed housing is crucial to consider. These eventually help determine the operational and development cost. You will also learn about its feasibility for such use cases. Many of these areas can be elusive for you. But housing sector experts can highlight the essentials to support you in this journey.