There is a new trend taking hold in many major resort areas. Up and down the
beaches, the old mom-and-pop hotels and motels are closing as residential
property surges in value and luxury condos take their place. But a new hybrid
product, condo hotels, could help satisfy both the profit motive and the need
for hotel unit inventory.
Condo hotels eliminate the problem that vacation condos often have, which is
that many remain
empty for nine months or more a year. If an area’s economic base is
tourism-driven, it needs rooms for its visitors. Condo hotels can help preserve
the transient nature of the use. The rental option also allows owners to take in
extra money rather than boarding up their condos for much of the year. And they
have the comfort of knowing that someone else is responsible for its care in
their absence.
A growing number of projects in Florida and across the country are part of
the condo hotel wave in which each unit is a condominium owned by an individual
buyer who lives there part time. When owners are not using the units, the
hotel's management
company rents them to outside guests and the owner receives a portion, of the
rental income, usually around 50%.
The projects offer an opportunity to own a vacation home in a popular
destination and have access to a hotel’s vast amenities from spas, pools and
fitness centers to fine-dining restaurants and concierge services. The condo
owners get all the services of a four-star or five-star hotel, and none of the
hassles of second home ownership. The hotel’s management company takes care of
all upkeep as well as finding hotel guests.
Like traditional hotel rooms, units that belong to owners who participate in
the rental program are all furnished identically and offer the same amenities.
So owners must be willing to forego any outrageous furnishings or personal
touches.
Part of the success of individual condo hotels is due to the names with which
they’re associated. And the names getting into the business these days are
indeed impressive. They include Ritz-Carlton, Trump International, Starwood,
Hilton and Hyatt, to name a few. Those names guarantee quality and professional
management. Plus they bring sophisticated reservation systems and marketing to
help ensure that owners’ units maintain high occupancy rates and generate
substantial revenue.
Another benefit for condo hotel owners is potential appreciation. Owners
stand to gain financially if values go up. Most properties sell the majority of
their condo hotel units in the pre-construction phase. Those buyers who get in
early when prices are at their lowest and unit selection greatest are ones most
likely to see the greatest appreciation.
Prices for luxury condo hotel units range from $300,000 to well over
$1,000,000. Like a traditional condominium, there’s a condo association,
property taxes and a monthly condo fee. The revenue a condo hotel unit generates
helps to offset these expenses.
The latest reports show that 90,000 condo hotel rooms are in the pipeline.
The condo hotel boom is not isolated to the popular cities in Florida like Miami
Beach, Fort Lauderdale, Palm Beach and Orlando. Condo hotels are sprouting up in
many other major destinations including Las Vegas, Myrtle Beach and the Bahamas.
Major metropolitan areas like Chicago, Boston, New York and Toronto are
getting condo hotels as well. So are some resort towns that are near to major
cities such as the Wisconsin Dells which is within driving range of Chicago and
Minneapolis.
Even some exotic locations are joining the trend. In Dubai, one of the United
Arab Emirates, construction will soon begin on three large, five-star condo
hotels. Various Caribbean and European developers are exploring the concept too.
Given the success of recent condo hotel developments, many more are sure to
follow.
For more information on condo hotels including listings of available
properties, visit
www.CondoHotelCenter.com.
Joel Greene is the President of Condo Hotel Center located in Miami Florida,
which specializes in the sale of condo hotels. Visit his information-packed web
site,
www.CondoHotelCenter.com
for more on condo hotels and to see condo hotel listings, photos and prices.
You can also sign up for his free Property Alert newsletter to be notified
when new properties come on the market.
