The rising cost of prime beachfront property will continue to boost the popularity of shared ownership, with the condo-hotel sector poised to benefit, according to reservation specialist Condo Hotel Marketplace.
The condo-hotel model offers buyers equity-based ownership of a unit (such as a hotel room, studio or apartment) in a hotel setting, with an entitlement to a number of days’ use and potential rental income when let to other guests.
Todd Spence, CEO of Condo Hotel Marketplace, predicts that the model will emerge to the forefront of the hospitality industry as buyers focus on efficiency: “In the future, resort type property will have to be jointly utilised due to energy efficiency and the efficient use of property. The cost of living on the beach will continue to rise, as will the cost of travel - no longer will it make economic sense to hop on a flight from New York to Vegas for the weekend. People will have to stay longer and, as they do, they'll come to desire the amenities inherent to a condo-hotel. And as they experience those amenities, they'll want them everywhere they go."
An additional factor cited by Spence is the economic model - although he warns buyers need to be realistic about potential returns, looking to the long-term benefits: “You have to go into it with the right frame of mind. You can't go into it thinking you can retire and live off the revenues. You have to cover your carrying fees and the mortgage payment will take care of itself as the equity builds. The key is that, in twenty years, people are still going to be getting out their suitcases.”
Reflecting this interest in the sector, the condo-hotel industry has experienced a high degree of activity in the past few months. Condo-hotel management company Jet Luxury Resorts recently added five new properties to its inventory - The St. Regis Aspen, The St. Regis New York, The Buena Vista Luxury Villas in Costa Rica and The Aspen Square Hotel and the Limelight Lodge in Aspen, Colorado – with the company adapting its business model to, in the words of president Richard Brosal, “maximize revenue potential for owners, while providing a truly affordable luxury rental option to the rental community”.
In a move which will increase available inventory for buyers, management services firm, Quantum Hotels and Resorts has announced it is to expand its operation in Singapore by approaching developers to convert existing, unsold condo projects into condo-hotels.
The company is currently looking at two properties in Singapore - one located in the CBD area and the other, in an upcoming residential district – to be turned into condo-hotels that will be managed by the company.
John Cole, president of Quantum Hotels and Resorts, told Overseas Property Professional magazine: “Looking at the market, and looking the position from a developers´ point of view, many are in the process of working out, completing and opening projects and selling units. They need assistance and now is the time for a company that is focussed on strata-title or condominium management to offer our service to developers.”
The firm currently runs six condo-hotels in the Philippines, with three slated to be opened in the city of Boracay this year, and Cole believes this ownership model will catch on in Singapore. Quantum also plans to extend its operations in China and Vietnam later this year.