If home ownership was once the tangible evidence of success in America, today a vacation home is the quintessential symbol of truly having arrived. But with limited time to spend using and maintaining a vacation home, the perfect solution has been elusive.
Along comes the condo hotel, a new twist on the traditional vacation apartment or family beach house. These hassle-free, amenity-rich properties could be the ultimate second home for today’s well-to-do.
“Condo hotels are designer-furnished condominium suites located in some of the most famous hotels and resorts around the country,” explained Joel Greene, president of Condo Hotel Center, a national real estate firm that specializes in the sale of condo hotels.
“Owners have access to all the wonderful amenities of a luxury hotel like resort-style pools, upscale dining options, rejuvenating spas. They also get the benefit of all the hotel services like daily housekeeping, valet parking and a helpful on-site concierge, everything you could want when on vacation.”
Owners of condo hotel units can use their vacation home when they’d like. When not in use, they don’t have to be concerned with boarding it up or maintaining it. That’s because an on-site hotel management company takes care of all operational issues, including finding hotel guests to rent the condos.
According to Greene, owners receive a share of the proceeds their unit generates, usually about 50%. He added that unit owners are more likely to receive a higher level of rental income by participating in the hotel’s rental program rather than trying to rent out the condo themselves. The hotel usually brings to the table a national affiliation, international marketing, a sophisticated reservation system, brand recognition and management expertise.”
Many condo hotel owners say they can more easily justify the purchase of a condo hotel unit than a traditional vacation home. I always hesitated to buy a second home in the past because I knew we could only use it a few weeks out of the year,” explained Mindy Sullivan, who recently purchased a condo hotel unit in Orlando for her family. A condo hotel was the perfect solution because whenever we’re not there, the condo is rented out. The income it produces helps cover its costs.”
Prices for condo hotel units range from $200,000 to upwards of $2,000,000 for five-star, ultra-luxurious homes. They usually include all furnishings and appliances as well as impressive design features like gourmet kitchens, luxurious bathrooms, marble tile and hardwood floors.
Condo hotel buyer, Dwight Torrence, said he always wanted a vacation home for his family but didn’t want to contend with all the hassles he remembered seeing his parents face with their lake house when he was growing up.
Even though we only used the lake house in the summer, it was a year-round burden. Burst pipes, rotting deck, fading paint, renters who didn’t pay up no thank you.” Torrence said he didn’t want the added chores and stress.
When I learned that with a condo hotel, someone else handles all the work, I knew I’d found a solution that was right for me.” Torrence just put a deposit on a condo hotel unit at New Oasis at Sea Mist Resort, a to-be-built condo hotel in Myrtle Beach.
Condo hotels are popping up in all sorts of appealing destinations like Miami Beach, Orlando, Las Vegas, Myrtle Beach and the Caribbean. “The concept started in Miami,” Greene said, “but it’s definitely catching on throughout the country. We’re also seeing condo hotels appear in Canada, Europe and the Middle East. It is becoming a worldwide phenomenon.”
In addition, buyers are coming from all over the world, not just the U.S. W International, a London-based company that markets condo hotels in Great Britain, finds that U.K. buyers are enchanted with the condo hotel concept.
According to Ann Adenius, president of W International, they welcome the opportunity to have a vacation home in the U.S. and have a particular affinity for Orlando, Florida. Over 40 percent of the condo hotel units sold in Orlando last year were to U.K. buyers,” she said. When you think about it, a condo hotel is perfect for them. They want to go on holiday once or twice a year in the U.S. but do not want to deal with renters or maintaining their property from overseas the rest of the time,” she said.
Most upscale condo hotels are operated by highly reputable hotel franchises like Hyatt, Hilton, Trump, Starwood, Sonesta and Ritz-Carlton that know how to cater to buyers with discerning taste and demanding requirements.
When I go on vacation, I want to be pampered,” explained Cherise Fuller who recently decided to purchase a unit at the W Las Vegas condo hotel. I want to relax, not worry about housekeeping, cooking and what to do with the kids. A condo hotel is perfect. The kids can head to the pool. I’ll go to the spa and fitness center. And my husband can hang out in the casino. There’s something for everyone.”
While having a home-away-from-home is the primary reason for purchasing a condo hotel, some buyers say they like the concept because of its appreciation potential. Places like Las Vegas, Orlando, Miami and Myrtle Beach have seen double-digit increases in real estate values in recent years. Many condo hotel owners in those areas are betting the surge in property appreciation will continue. When they sell their vacation homes, they’re hoping to make a significant profit.
I bought a condo hotel to diversify my portfolio,” said John Alicia who purchased a unit at The Cube condo hotel in Dubai, a place he said he is not planning to spend his vacations. I was able to buy a five-star condo hotel for under $300,000. I’m looking forward to seeing decent annual returns and an increase in value when I’m ready to sell, probably in a few years.”
Now Alicia, who lives in California, says he’s looking for another condo hotel to buy. But this one will be in the U.S., one he’s likely to use as a family vacation home as well as an investment.
I’ve shied away from real estate in the past because I didn’t want to be a landlord and take on all the responsibilities that come with it. The way I see it, a condo hotel gives you all the perks of ownership — a nice place to vacation, rent revenue, and appreciation potential — without any of the problems.”