Condo-hotels: The right mix for Miami What do you get when you mix a resort hotel and residential housing units that can be bought and used ashotel rooms? Condo-hotels. South America and Europe have seen the rise of this concept and now condo-hotels are hitting the hot beaches of Miami with full force. The buyer of the residential units wins because of the potential investment return; the hotel owner wins because they get surplus inventory. It's a win-win situation - or is it?
Gil Dezer, a partner with Miami-based Colonial Ridge Developers, worked on the Ocean Grande, a 362-room condo-hotel in Miami Beach. "What we're doing is selling out the individual hotel rooms, and the purchaser can use [the units] as often as they want," he says. "When they're not in Miami, the hotel rents it out on a nightly, weekly or monthly basis with a 50-50 revenue split between the hotel owner and the unit owner. The condo-hotel concept makes it affordable to everyone, with rental income covering the majority of the owner's expenses - maintenance fees, taxes, etc."
The condo-hotel concept also provides purchasers with the comforts of a hotel stay. And, unlike a timeshare where the buyer purchases time, the purchaser of a residential unit at a condo-hotel has exclusive ownership. Doug Weiser, senior vice president of Miami-based Carnival Resorts & Casinos, says owning a condo-hotel unit is less expensive than owning a second home and much easier to maintain.
"When the owner is away, the unit is taken care of by the hotel," he says. "They have access to room service, spas, tennis courts, a pool and the beach - all the services that you get from a hotel. Then, they have the ability to use the unit whenever they want to as an owner."
Weiser, whose company is currently working on the 198-residential/300-room Ritz Carlton Key Biscayne resort, says there are two programs available for condo-hotel owners. "One is the guaranteed program where the unit owner wants to rent the unit out except for eight weeks out of the year. The other - a 'flex' program - allows the residential unit owner to use it at any time provided they give the hotel at least 60 days notice. If they give the hotel less than 60 days, it may not be available."
Only time will tell if the condo-hotel is a trend that's taking off or merely the newest industry fad. But for now, Miami is opening its beaches to an idea that could change the way resort hotels do business.