What You Need to Know About Condo-Hotels

Most people are aware of what Hilton, Ritz-Carlton, Le Meridien, and Four Seasons are known for. All of them own upmarket hotels at vantage locations. Most of them also operate condo-hotels. Tourist hotspots like Miami, Orlando, New York, Las Vegas, and Chicago are home to countless condo-hotels of all shapes and sizes. It’s surprising that iconic names, as well as emerging businesses, are looking to own these premium properties. Although the individual motives of these investors might vary, the primary business goal remains the same: Realize the highest return on investment in the shortest time frame. 

What is a Condo-Hotel?

A condo-hotel is a fusion of a condominium and a hotel. Known by different names such as condotel, contel, and hotel-condo, a condo-hotel is legally a condominium that’s operated as a hotel with some common areas and services. Unlike a hotel owner, a condotel owner sells the rooms/units to separate buyers.

Every homeowner here stands to benefit from several other common facilities that may not be available or affordable in an independent home or apartment.

A Close Look at the Pros

Increased Flexibility

Unlike the owner of a conventional hotel, a buyer of a condo-hotel unit can use it as a vacation home, rent it out, set up an office, or opt to join the hotel’s rental program for regular income without any hassle. This versatility is one of the many factors that also attracts investors who aspire to set up a lucrative business in the hospitality space. These entrepreneurs have some good news: A loan for the construction of a condotel is likely to be cheaper viz-à-viz a loan for a conventional hotel!

Higher Demand

The demand for a condo-hotel is usually on the higher side, thanks to its prime location. The high cost of real-estate makes it difficult for people to buy swanky standalone properties in the area of their choice. Also, people usually prefer to reside closer to their workplace to reduce their commute time. A condo-hotel is an excellent choice for retail property buyers. Even the facility owner stands to benefit since the possibility of achieving break-even is faster compared to a hotel that’s dependent on the floating population. Some smart builders associate themselves with big brands for easy marketing of their properties.

Plush Amenities

Concierge service, housekeeping, bowling alleys, private screening rooms, and rooftop pools ‒ many of these amenities are no longer the luxuries reserved for a fortunate few. They have become standard amenities in most high-end condotels. Every homeowner here stands to benefit from several other common facilities that may not be available or affordable in an independent home or apartment. More satisfied unit owners also mean more takers for new units and higher brand equity for the overall property.


Better Security

The increasing demand for condo-hotels makes security a priority for both the unit owner and the complex owner. Another reason for the surge in safety measures is the ever-increasing density of the population in these areas. The complex owner/association appoints experienced security personnel to keep a watchful eye on the property. Since luxury hotel brands maintain many of these properties, occupied by multiple people, security is always a priority.

Considering the Cons

Ownership Issues

Owners of condo-hotels eventually are actually part-owners with shared privileges. In other words, they do not own any land, although they pay a premium for the same. Some properties also impose restrictions on the number of days buyers can use their own units! They also expect the owners (who stay elsewhere) to make the bookings for their own stay in advance. An unfortunate fact is a condo-hotel is more likely to have usage-sharing issues faced by any other mixed-use projects.

Maintenance Costs

A condo-hotel has some common areas like hallways, pools, gyms, and elevators. The question here is: Who is accountable for the upkeep of these areas? In many cases, onsite management companies handle the same. Even though the condo complex owner takes the onus, the unit owners end up shelling out a reasonably high amount to own the property without worrying about its maintenance. This impediment might sometimes keep away buyers who choose to invest in a property that requires only a one-time fixed amount.

Complex Commercials

Individual homes or hotels have clearly defined laws related to insurance and taxes. But the legalities become more complicated when it comes to condo-hotels. This is because of the intricacies of the ownership model itself. In this model, there are multiple parties with full and partial ownership. Both the complex owner and unit owner sign an agreement to share the rental income. Although the benefits of convenience and value for money attract many buyers, tax and insurance payments can sometimes become cumbersome. Also, it’s not uncommon to see lenders rejecting credit to condotel developers.

Summing Up

The concept of condo-hotels is not new. The first condotels may have come into existence in the 1980s, but their popularity has skyrocketed over the years. Though their demand might have fluctuated during uncertain times, today’s working professionals aspire to stay closer to their workplaces. This makes a condotel a good bet.

Property developers and hospitality companies are seeking ways to optimize their investments with minimal complexities. Some hoteliers are converting their hotels (fully or partially) into condotels. Thus, the future of this unique form of accommodation definitely looks promising. There are some passionate investors who prefer to build it from scratch, even though the procurement of space is always a challenge. It’s not surprising to see them scouting for the best engineering and architecture firms that specialize in multi-family and condominium services. This is where Design Everest can step in.

How Design Everest Can Help

Whether it is for the construction/renovation/expansion of a residential structure or automation of a home/condo, Design Everest can show the way with a suite of multi-family project engineering services.

Call us at (877) 704-5727 for a no-obligation quote followed by a consultation.

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