Why are chain hotels reaching out for old buildings?
When talking about the expansion of China's hotel industry, "speed" and "standardization" are the core keywords. This logic has underpinned the industry's rise over the past two decades — from first- and second-tier cities to third- and fourth-tier markets and even more lower-tier areas, standardized models have largely narrowed the physical property hardware gaps between cities.
Now that the stock era has arrived, Chinese cities are shifting from "large-scale demolition and construction" to "refined micro-renewal". Old neighborhoods that carry urban memories and historic buildings with profound cultural heritage are being rediscovered. As the most flexible business form in stock renewal, hotels have taken the lead to tap into this market.
Recently, a post about Atour's renovation of the former Hunan Provincial Grain Department building went viral. This is not an isolated case — many hotel brands that grew through rapid expansion have also ventured into historic building renovation in recent years. The question, however, is: can non-standard properties really achieve clear profitability, or are they merely a "sentimental narrative"? Can brands like Atour and Hanting, which started with standardized properties, make non-standard renovation a success?
When the business-oriented AtourS Embraces Non-Standard Renovation
The renovated former Hunan Provincial Grain Department is now renamed Atour S Hotel Changsha Wuyi Square IFS, marking AtourS's first location in Changsha.
Before renovation, the Hunan Provincial Grain Department was a Soviet-style red brick building constructed in the mid-20th century, with part of it designated as a municipal-level cultural relic protection site. The building had fallen into disrepair over the years, with structural safety hazards, and its original layout, facade, and distinctive carvings — key historical textures — were in urgent need of preservation.
In the past, the main task of the Hunan Provincial Grain Department was to implement policies on grain and edible oil, overseeing their procurement, supply, allocation, storage, and processing. It was formed through the merger and expansion of the Hunan Provincial Grain Bureau and Hunan Provincial Grain Company, and holds important historical traces of the evolution of Hunan's grain administrative agencies.
After the renovation, following the strict principle of "restoring the old as old, with minimal intervention", the building underwent systematic structural reinforcement, hazard remediation for fixtures, and cultural restoration. Its original layout, historical facade, distinctive carvings, and Soviet-style historical textures have all been fully preserved.
Apart from preserving the building's exterior, the former Hunan Provincial Grain Department has been transformed from an inefficient space with a single function — primarily for office and residential use — into a hotel integrating accommodation, culture, and leisure. It features 95 guest rooms, with a re-planned layout that adds new functional zones including a lobby, a library (Zhuju), a restaurant (Xiangzhao), a courtyard, meeting rooms, and a gym, effectively revitalizing the historic building.
Price comparisons across major OTA platforms show that on weekdays, the cheapest standard room at this hotel costs at least 660 yuan per night, while the most expensive suite exceeds 1,000 yuan, with the average room rate hovering around 1,000 yuan. On weekends, the minimum room rate rises to the 800–900 yuan range, demonstrating significant premium potential.
Looking at the post-renovation pricing alone may lack context, but a horizontal comparison with international hotel groups makes the brand's premium advantage clear. On weekdays, the lowest rate for a single room night at InterContinental Changsha Beichen is only 700 yuan, and at Sheraton Changsha Yun da it is just 660 yuan — these international hotels, which opened before the pandemic, have seen price declines possibly due to aging facilities. Even the JW Marriott Hotel Changsha Jianhongda, which opened less than five years ago, charges a minimum of just over 800 yuan per room night.
Non-standard renovation has granted the brand strong premium capabilities. In Changsha's core business district, its room rates can not only match those of high-end international hotels, but even surpass them.
What remains puzzling, however, is why this renovation project was assigned to the AtourS brand?
AtourS Hotel positions "Special" as its core selling point, clearly targeting high-end business travelers and typically selecting locations in the core business districts of first-tier cities. Its design avoids rigid, uniform replication, instead creating personalized properties that integrate the local urban character and the unique features of the physical space. Simply put, AtourS Hotels primarily cater to high-end business guests, adjusting their property designs to reflect local urban culture.
The concept of "one property, one design" is hardly new, but AtourS has taken a different path — rather than merely creating standardized properties that blend into the city, it goes a step further by adopting non-standard renovation methods to craft one-of-a-kind brand outlets.
At the same time, AtourS has not abandoned its business customer base. The hotel lobby features a "Zhuju" reading space and a business negotiation area to meet the office and light social needs of business travelers.
Does Atour Group not have a dedicated renovation brand? In fact, it does — but that brand focuses on cost-effectiveness, making it less suitable for renovating historic buildings.
This refers to the AtourX brand, positioned as a "high-quality non-standard brand" and a "mid-to-high-end stock renovation expert". Its renovation projects primarily revolve around existing hotels — including the rebranding and lightweight upgrading of independent hotels and old chain hotels — with daily room rates ranging from 200 to 600 yuan.
Another point is that AtourX's lightweight renovation model usually operates without altering the original building structure, achieving low-cost upgrades by refurbishing storefronts, replacing soft furnishings, and making partial optimizations. However, this lightweight approach clearly cannot meet the mandatory renovation requirements for historic buildings, such as structural reinforcement, fire protection upgrades, and pipeline reconfiguration, making it difficult to meet compliance standards.
In other words, although AtourX focuses on renovation, when it comes to non-standard properties beyond traditional hotels, its lightweight model cannot meet the required renovation standards. At this point, AtourS, which follows a high-end business positioning, becomes the optimal choice.
Why Non-Standard Renovation Is Gaining Momentum
Of course, non-standard renovation is not AtourS's exclusive domain. Many brands that once took scale expansion as their core strategy have long been laying out this track, with their entry pace accelerating significantly in recent years.
Hanting, under Huazhu Group, renovated the Qingta No.2 Hotel — a Zhejiang provincial-level cultural relic protection site built in 1933, once known as "Qunying Hotel" — back in 2009. It is now Hanting Hotel (Hangzhou West Lake Renhe Road Branch), and underwent a second renovation in 2018 that preserved historical elements such as cast-iron railings, wooden floorboards, and terrazzo floors.
More recently, the all-season Foshan Lingnan Tiandi Zumiao Metro Station Hotel, which opened just last month, was transformed from the former Agricultural Bank of China Building. This building, the first full-glass curtain wall office building in Shantou constructed in the 1980s, retains the architectural characteristics of Lingnan historic buildings.
Apart from office buildings, Intercity Hotel under Huazhu Group has also turned its attention to old historic hotels. In 2025, Intercity Hotel (Shanghai Bund Nanjing Road Pedestrian Street Branch) opened on the site of the former Wu Gong Building, which was once a tourist-oriented three-star hotel. The building was designated a cultural relic protection site in Shanghai's Huangpu District in 2017.
It is worth noting that the cost of renovating this building was not low — the facade reinforcement alone cost over 20 million yuan. During the renovation, the construction waste generated from structural reinforcement could only be transported out in small vehicles late at night, further increasing costs.
Not to mention that Huazhu Group has partnered with Guangzhou's state-owned assets, planning to invest in around 300 hotels in Guangzhou over the next three years. The initiative will primarily revitalize idle or inefficient stock properties owned by Guangzhou municipal state-owned enterprises (such as Lingnan Group, Zhu Shi Group, Guangzhou Cheng Tou Group, and Guangzhou An Ju Group), many of which are non-standard property assets. Hotel brands once renowned for rapid large-scale expansion (such as all-season, Hanting, and Orange) are now aligning with this huge stock renovation demand, enhancing property value through brand empowerment.
In the past, these chain hotel brands grew through rapid expansion, with the core logic of "standardized replication, quick return on investment". Yet the non-standard renovation of old buildings follows the exact opposite pattern — long cycles, high investment, and slow returns. So why has this "contrarian" model gradually gained favor among brands? Compared to standard properties, what unique advantages can renovating old buildings bring?
/ Securing Prime Locations, Capturing Brand Premium
Prime locations in first-tier and new first-tier cities have scarce new land supply, and the rent for new hotels is relatively high. Following the historical pattern of urban development, old buildings are located in the earliest developed city centers, in core business districts or areas rich in cultural tourism resources. By restoring their facades and renovating their interiors, brands can access high-quality locations that were previously out of reach at a relatively controllable cost, leveraging the large foot traffic in core areas to drive increases in room rates and revenue.
While prime locations are the mainstream, not all old buildings are situated in such areas. Some old buildings have small footprints and relatively remote locations (such as old factories on the urban fringe or old communities in non-core areas), or are restricted by cultural relic protection and urban planning requirements (such as height limits and facade restrictions) that prevent them from meeting the criteria for core locations. However, during renovation, these buildings can adopt a differentiated positioning of "small but exquisite" to compensate for their location shortcomings.
/ Catering to Consumer Trends, Creating Differentiated Experiences
Currently, the new generation of customers (Gen Z) no longer solely pursues luxurious hardware facilities, but places greater emphasis on the emotional value, cultural experience, and cost-effectiveness of hotels. Old buildings inherently carry unique urban memories, a retro atmosphere, and local cultural temperament, precisely meeting young people's demand to "pay for emotions" and forming differentiated appeal.
In particular, hotels renovated from historic buildings (such as old factories and Soviet-style government office buildings) provide consumers with a spiritual haven to escape standardized life. Through the model of "affordable guest rooms + cultural experience", these hotels fill the market gap between high-end hotels and the monotonous, standardized chain hotels.
For example, the Nuoan Hotel in Shenzhen was transformed from an old electric welding factory, preserving the original industrial heritage while integrating modern design.
/ Accommodating Stock Release, Shortening Preparation Cycles
Many old buildings face high barriers to acquisition due to historical legacy issues (such as unapproved construction, incomplete procedures, missing ownership certificates, or "multiple certificates for one land parcel") or are on the verge of being unsold. In addition, historic buildings are constrained by cultural protection or structural red lines, making large-scale demolition and reconstruction extremely costly. However, brands that grew through standardized large-scale expansion adopt a "reuse and partial modification" model (preserving the historic facade and partially optimizing the space), which significantly reduces the renovation cost per room, shortens the preparation cycle, and improves capital turnover efficiency.
On the policy front, the state is vigorously promoting the integration of urban renewal and old building renovation, and a large number of historic buildings are in need of revitalization. For hotel brands that achieved scale through standard properties in the past, their mature renovation models and supply chain capabilities make them the optimal choice to undertake the release of "non-standard" assets.
Non-Standard Properties vs. Standard Properties
Non-standard renovation can not only conform to the general trend, but also generate higher brand premiums. But for brands accustomed to the operational logic of standard properties, can the returns and costs of these non-standard properties — which have seen concentrated growth in recent years — truly be accurately calculated?
In terms of cost comparison, the hidden costs of old building renovation are higher, while standard properties have more controllable costs. Data shows that the combined hidden and incremental costs of old building renovation are usually 30%–40% higher than those of new standard properties. This is mainly reflected in demolition and waste removal (requiring the dismantling of old pipelines and walls, and disposal of construction waste), mechanical and electrical renovation and compliance costs (upgrading old pipelines, creating interfaces for new smart devices, meeting fire protection and environmental protection standards), and time costs (revenue loss caused by partial suspension during the renovation period).
One Boman Hotel in South China — renovated from an old guesthouse — incurred renovation costs as high as 1.6 million yuan due to the complexity of fire protection upgrades, far exceeding the original budget of 400,000 yuan.
Standard properties, by contrast, have a clear cost structure, mainly covering land rent, infrastructure, standardized decoration, and mechanical and electrical installation, with low hidden costs and relatively controllable per-room renovation costs (usually 40,000–60,000 yuan per room).
Secondly, although the premium potential of old building renovation is large, operational returns carry uncertainties. However, once the project achieves market success through the precise positioning of "integrating the old and the new", it can usually deliver high premiums and high occupancy rates, with the payback period compressed to 2–3 years — significantly faster than building a new standardized hotel.
From an operational perspective, the core barrier of non-standard hotels lies in their operational logic, which is completely different from that of standard properties. A standard property manager is an "executor", while a non-standard property manager needs to be an "operator". However, the reserve of professional talents in this field is far from keeping up with market growth, making such talent extremely scarce. It can be said that investing in a non-standard property is not just "building a property", but "building a benchmark" — each one serves as a flagship under the brand.
Standard properties, leveraging brand effects and standardized services, have more stable customer acquisition and occupancy rates, with clear investment return expectations and a relatively long payback period (usually around 5 years).
Nevertheless, when viewing old building renovation within the hotel industry cycle, the marginal returns of standard properties are diminishing. Homogeneous competition and price wars are pushing chain hotels through an inflection point from "scale expansion" to "quality competition", creating a need for brands to find a differentiated competitive weapon. Old building renovation, with capital as the entry ticket, forms a compound competitive barrier through the deep integration of branding, culture, and operations.
This capability for old building renovation is not accessible to every brand. The hotel groups behind the brands must rely on their scale effects, systematic empowerment, and industry experience to provide irreplaceable advantages of "reducing costs, enhancing efficiency, and driving premiums" for old building renovation. The players who can master this capability will pull ahead in the next round of competition, and the window of opportunity is continuing to expand.
Essentially, chain hotels "acquiring" old buildings is a renegotiation of the survival rules in the stock era.
As the marginal benefits of standardized expansion diminish, old building renovation is no longer a so-called sentimental narrative, but has transformed into a differentiated weapon for brand breakthrough: unlocking new opportunities through higher premiums, shorter payback periods, and access to rare prime locations. However, this door is not open to everyone — behind the brand are years of accumulated supply chain capabilities and industry experience from large-scale operations, a game that small and medium-sized players can never replicate.
On a deeper level, this is also a mutual benefit between cities and brands: cities revitalize dormant historical assets, while brands inject commercial value. When a balance is struck between "restoring the old as old" and commercial operations, old buildings are no longer a burden, but become spaces that reflect the integration of urban memory and economic value through the perspective of hotels.
This article is from the WeChat public account "Space Mystery Exploration", written by Qin Minhui, and published with authorization from 36Kr.