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What Is a Condominium Hotel?

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  • Written By: E. Reeder
  • Edited By: A. Joseph
  • Last Modified Date: 20 September 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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Condominium hotels, also known as condo hotels or condotels, are hotels that have space inside, such as a room or suite, that can be purchased by investors so that they can earn high profits while turning over most supervision issues to the hotel management. When people stay in their unit, which is inside of a high-end hotel, the owner receives a portion of the profit while the hotel handles all guest services and interactions. There is an agreement between the owner and hotel management that spells out the responsibilities of each.

Purchasing a unit in a condominium hotel allows the buyers to be able to use the condo as a vacation home. They have purchased the space, so they own it, even though it is inside of a hotel. Therefore, they own the property and can keep it, sell it or lease it as they desire.

One common restriction to owning a condo hotel unit is that the owners usually cannot reside there for more than a month or two throughout the year. Most owners do not buy a condo hotel room or suite intending to settle there permanently anyway, so this normally is not an issue. The reason for this residency restriction is that the hotel or resort management wants to maximize profit by renting out the unit as much as possible throughout the year, which benefits the individual owner as well.

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When the owners of a condominium hotel unit are not using it, they can allow the hotel management to rent their space to other consumers and take over the management and upkeep. By doing this, they can gain a substantial portion of the profits, the rest of which go to the hotel. Often, a condominium hotel is in prime tourist territory. It will usually have better amenities than those offered at lower-rate or standard hotels. These amenities might include concierge services, in-room fireplaces and a private balcony as well as entertainment and fitness activities.

Most or all of the rooms in a condo hotel are individually owned. Guests to the hotel would not necessarily know that they were renting a room or suite that was owned by anyone other than the hotel chain. The facility would appear to be a normal hotel.

Instead of having to manage their own property, owners of condo hotel units outsource the administration and upkeep to the hotel management. The owner of a normal rental property must be in charge of collecting rent and maintaining the property and land. For the owner of a unit at a condominium hotel, this is not the case. Therefore, investing in condominium hotels is considered a fairly profitable investment and has gained in popularity.

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