Planning, housing and operating rules create different hurdles for hotel projects in each city. Here is what owners, developers and investors should check before committing to a property.
A hotel site can look attractive on demand and price and still fail an investor’s first test: can the hotel be developed and operated as planned?
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The answer depends on different combinations of planning rules, housing protections, building requirements and operating obligations.
These five cities are not ranked by how heavily they are regulated. Instead, they illustrate where regulation enters a hotel project’s timetable, capital budget, achievable room count and operating model.
| City | Key development question | Other regulatory consideration |
| Paris | Can the proposed use and alterations satisfy planning and heritage requirements? | Tourist letting of homes and environmental requirements |
| Berlin | Can the building lawfully change use, particularly where housing is involved? | Residential-use controls, accommodation tax and employment obligations |
| London | Will the borough grant permission, and does a listed building need separate consent? | Residential short-let rules and employment costs |
| New York | Does the hotel require a City Planning Commission special permit? | Hotel licensing, staffing and building standards; short-term rental controls |
| Barcelona | What does the property’s tourist accommodation planning zone allow? | Separate restrictions on tourist-use homes and hotel development |
A rule affecting an apartment offered to visitors does not necessarily apply to a hotel. The table is a starting point for a property-specific review, not a ranking of regulatory burden.
Paris: Check use, heritage and environmental conditions together
Paris’s bioclimatic local urban plan sets much of the framework for construction, rehabilitation and land use.
Two protected areas—the Marais and part of the 7th arrondissement—are instead governed by separate heritage protection plans. A hotel conversion must be assessed against the rules that apply to its precise location.
A historic building may offer an attractive setting while restricting changes to its layout, exterior or services. The proposed room count and refurbishment budget should therefore be tested against what can actually be approved. Environmental requirements also belong in that early design assessment.
Paris limits tourist letting of a primary residence to 90 days a year. Letting another home as furnished tourist accommodation generally requires a change-of-use authorisation with compensation under the city’s rules.
These controls concern residential accommodation, not a 90-day limit on hotel rooms. They do, however, show how housing policy shapes the wider visitor accommodation market.
Investor check: Confirm lawful use, the applicable planning or heritage plan, and the scope for the proposed works before underwriting room count or refurbishment cost.
Berlin: Establish whether residential space can change use
Berlin’s law against the misuse of housing restricts the use of residential premises for other purposes without the necessary permission.
It covers repeated paid short stays. For a proposed hotel or serviced accommodation conversion, a building’s physical suitability does not establish a right to change its use.
The approval route depends on the property’s lawful existing use, the proposed activity and the relevant district. Short-term rental registration and controls should be considered separately from permissions for a conventional hotel. The EU’s short-term accommodation data regulation has applied since 20 May 2026, adding a cross-border data framework to local controls.
Operating assumptions need their own review. Berlin charges an overnight accommodation tax of 7.5% of the net accommodation price, including on business stays since April 2024. Staffing budgets must also reflect applicable German employment rules and collective agreements.
Investor check: Obtain evidence of the building’s lawful use and the permissions required for the proposed activity before treating residential or mixed-use space as a hotel conversion opportunity.
London: Planning permission is only one approval
Hotel development in London is assessed through the relevant borough’s planning process, informed by local policy and the London Plan.
The 2021 London Plan remains the adopted strategic plan; its 2026 replacement is a consultation draft. That distinction matters for a project whose approval timetable could span a policy change.
A historic conversion may need a separate consent. Works affecting the special character of a listed building generally require listed building consent, in addition to any planning permission required. This can constrain changes to bedrooms, lifts, circulation, building services and the exterior.
London’s 90-night rule concerns short-term letting of residential property without a change of use, subject to conditions. It is separate from hotel planning rules.
On the operating side, the UK’s National Living Wage is £12.71 an hour for workers aged 21 and over from April 2026. Labour costs need to be modelled alongside approvals and fit-out, especially for service-intensive properties.
Investor check: Test the hotel proposal against borough policy and the adopted London Plan, then establish whether listed building consent is required for the intended design.
New York: Price in the permit and the operating licence
New York’s zoning rules can make a hotel development, conversion or enlargement dependent on a City Planning Commission special permit. The requirement depends on the district and the project.
A discretionary permit changes the likely timetable and approval risk, so the route should be established before acquisition assumptions are fixed.
The city’s short-term rental rules affect a different part of the accommodation market. Under its registration regime, a short-term rental host must generally remain in the same unit with no more than two guests.
This restricts many whole-home short stays. It does not establish how much demand or revenue shifts to hotels; that commercial effect requires separate evidence.
New York also imposes a direct hotel operating requirement. Since May 2025, operators have needed a licence for each hotel. The Hotel Licensing Law includes safety, cleanliness and worker protections. Its direct-employment requirement has an exemption for hotels with fewer than 100 rooms, making property size relevant to the staffing model.
The 2025 New York City Energy Conservation Code has been enforced since 30 March 2026. The city says new job filings, filings with incomplete energy analyses and projects altering historic buildings must comply, subject to its detailed transition rules.
Energy-code requirements should therefore be checked against the proposed works and filing status, including for an existing hotel.
Investor check: Establish the zoning and permit route, then model licensing, staffing and applicable building-code requirements for the proposed hotel size and service model.
Barcelona: Check the planning zone before underwriting the project
Barcelona’s Special Urban Development Plan for Tourist Accommodation, known as PEUAT, regulates different types of visitor accommodation, including hotels, hostels and tourist-use homes.
The rules vary by zone and use. Two sites in the same visitor market may therefore offer different development opportunities.
The city requires a PEUAT assessment before certain licence, works and activity applications. Investors need to verify the property’s zone, existing authorisations and scope for any increase in capacity before assuming that a hotel can open or expand.
Housing policy creates a separate question. Barcelona’s current guidance says new tourist-use homes cannot be established, and the city expects existing tourist-use home licences to expire in 2028.
That planned measure concerns residential properties used for tourist accommodation; it is not a blanket ban on hotels. Hotel proposals remain subject to the PEUAT conditions for their location and type.
Investor check: Obtain a property-specific PEUAT assessment before underwriting a new hotel use, a conversion or an expansion of existing accommodation.
Put regulation into the investment case early
These five markets present different forms of regulatory friction. Planning and heritage rules can determine whether a hotel opens and what it costs to build. Housing rules can restrict conversions.
Licensing, employment, tax and building requirements affect the operating model. Controls on short-term rentals primarily govern other accommodation, and their effect on hotel demand or returns should be tested rather than assumed.
For a cross-border acquisition or development, the initial review should answer five questions:
- What is the property’s lawful use, and is the proposed hotel use permitted?
- Which planning, conversion, heritage and building approvals are needed, and on what timetable?
- Which design or environmental requirements could change the capital budget or achievable room count?
- Which labour, licensing and tax obligations affect operating costs?
- How might controls on other accommodation affect the local market, without assuming a particular effect on hotel returns?
There is no useful single ranking of the world’s “most regulated” hotel cities. The investment question is where each market’s rules enter the deal—and whether the proposed hotel still works once their effects on cost, timing, room count and operations are reflected in the model.
