Tourism is an industry that has been growing rapidly in the past few decades and that brought about an increasing demand in the requirement for accommodation. This in turn has triggered a new hi-return investment proposition – the purchase of hotels. When we talk here about buying and selling of hotels, there is another emerging trend that is becoming popular as we speak. This is the condo hotel or a condominium that is converted into a three or four star hotel accommodation.
The use of condominiums for vacation accommodation has been around for quite some time – however, the condo hotel is a relatively new concept. This concept has a good number of advantages over a normal hotel and these are:
• A great real estate investment which earns you high revenue and establishes a good business
• An excellent vacation house that is there for you whenever you need or want it
• High appreciation value
• Small establishment – easy to manage, and maintain
• Excellent business opportunity
• The rooms are much larger than in a normal hotel and the ambiance more relaxed and hospitable
• Excellent profit if re-sold
The cost of a condo hotel for sale these days would be in the range of US $100,000 to $ 800,000 depending upon a number of factors such as:
• Location – the higher in demand the location is, the higher would be the cost of the condo hotel; this is directly proportional to the demand of that particular place as tourist destination
• Interior décor – the cost would indeed be influenced heavily by the type and quality of furniture and furnishings you provide; of course, the better they are, the higher clientele it would attract resulting in higher returns
• Season duration – there are places where the peak season is all round the year, while there are places where the peak season lasts for about 2-3 months. Needless to mention here, that the condo hotel that has round the clock demand would be more expensive that the one which has one a few months exposure to tourists.
It is not necessary for you to go for condo hotels that have been already built by somebody else. You could always go for buying a pre-construction condo hotel and have it custom-made to your liking. The construction of a condo hotel would be somewhere between one and two years but the wait is well worth it because you can get exactly what you wanted in it.
While buying a condo hotel there are a few things that one should keep in mind such as:
• The projected yearly revenue in terms of occupancy and tariff that it would command
• The projected yearly expense – this would include the staffing, the maintenance and the condo hotel at the level that you want to operate it, i.e. three star, four star, etc
• Solid research on the property for sale – do not take the word of the real estate agent for it – on price, type of property and other such factors.
Brian Cliette