In the world of travel, you may have heard the word “condotel” and if you think about it, you can pretty quickly realize it’s a combination of the words condo and hotel. But, what exactly is a condotel and why are they so popular? It’s not very hard to see why.
What is a Condotel?
First off, a condominium is a building or a complex that contains a number of individually owned apartments or houses. It’s a concept that has been around for a long-long time, even back to the first century this concept of selling part of a building has been around. A hotel, on the other hand, is a business establishment that gives lodging, specifically to tourists or travelers, to be paid on a short term basis and includes a multitude of individual rooms for guests with provided beds and other services and guest facilities. This much you probably already knew.
A condotel is a combination of the two. It’s a condominium-style complex that operates as a hotel, with a front desk, cleaning services and more possible amenities. The units of a condotel are individually owned, and when the units are not in use by the owner, the owner can rent out their units to other guests and travelers through a rental program. It’s put pretty simply. You live in a condominium complex that is owned by a hotel business, and when you leave to either return to your primary home or go on a vacation yourself, your unit is rented out by the hotel to other travelers and you get paid by them for staying in your condominium.
Here's why condotels are great for owners and travelers:
Condotels provide services such as housekeeping so that you don’t have to worry about your residence being left in a different way than you previously left it. In exchange for basically not having to lift a finger, you pay the hotel management fees that will range anywhere from 20-40 percent of the nightly rate. This way, you get to generate some income on your property when you’re not using it.
When in use of the property, owners get to use the amenities offered by the condotel, which could include housekeeping, a pool, a gym and other hotel-like amenities while paying an extra fee in order for the hotel to upkeep the services and amenities. It’s not very typical for owners of a condotel property to use it as their main residence, because it’s more common as a second-home type of residence, but it can be used as a main residence as well.
The condotel began ‘a thing’ when condominium complex and hotel developers realized how costly it was to build a new complex. They decided to pre-sell properties, whether it is a condominium style residence or a studio/two or three-bedroom apartment type residence or some sort of villa. This way, developers could get help with the building process while giving incentive to those who bough the properties by bringing in management to run the complex, like a hotel and allow for the option of owners to rent out their properties in order to receive a type of return on the investment that they had made.
With the success of this business venture, large hotel companies have entered the condotel business including names like Hilton, Marriott, Ritz-Carlton and more. In the United States, the most popular locations for condotels are unsurprisingly large tourist cities. This is because those that own a condotel property need to own it in a solid tourism market area so that their investment is actually able to get returns because of the large number of tourists the condotel has the potential to accommodate. This includes cities like Miami, Chicago, Las Vegas, Aspen, Co., New York City, Myrtle Beach, Sc., Orlando, Fla., popular Hawaiian Islands and more. International condotels have found success in popular Caribbean countries like Costa Rica, Puerto Rico, the Dominican Republic and more.
If you do your research and are smart about the deal that you’re getting into with a trusted company, owning a condotel especially in highly populated tourist areas can not only give you a big return on your investment, but also allow you to make a profit and indulge in specialty programs offered by the company elsewhere around the country and even the world.
This article was written by Cameron Lafontaine.