Top Five Misconceptions of the Condominium Hotel Industry / Provident Hotels & Resorts / October 2008

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Top Five Misconceptions of the
Condominium Hotel Industry
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CLEARWATER, Fla. October 16, 2008 - For more than 30 years, the condominium hotel industry has been a viable marketplace for vacation home ownership and property developers. Unfortunately, there are still some deep-seated misconceptions about the industry, recently magnified by the downward real estate market, that have lead the ill-informed to see the condo-hotel business strategy as flawed. In an effort to clear misconceptions about the industry, Provident Hotels & Resorts (also known as Provident Management Corporation), leading full-service condo explains the five top misconceptions of condo hotels.

1) Condominium Hotels are a flawed business model
Condominium hotels have been and continue to be a stable business concept when implemented correctly. A balance between the goals of the developer and unit owners has to be achieved for the project to succeed. Condo-hotel projects can run into problems when one side gets too greedy or the location does not make sense from the standpoint of it being a viable vacation destination The downfall of many properties occurs when developers promise skyrocketing profits for owner investments and are unable to deliver.
2) Condominium Hotels are an investment opportunity to make a quick profit
While condo-hotels are able to achieve rental revenue, they are meant to serve as a second/vacation home first and foremost. This means those interested in purchasing a condo-hotel unit should be in the market for lifestyle enhancement properties, not for potential profits. The income acquired from the rental program should be used to offset the overhead when the unit is not in use by the owner.
3) All condo-hotel units must be enrolled in the rental program
Condominium hotels vary across the board, however most properties' rental programs are optional. Owners can choose to have their unit in the program to be rented as a hotel room while not in use. It is to the advantage of the owner to use the rental program, to offset overhead costs and be eligible for unit upgrades that hotel operators make available.
4) Condominium Hotel operators can change rental program rules at anytime
Contrary to popular belief, the majority of condo hotel operators cannot make changes to the rental program specifications without the consent of 75 percent of condo hotel ownership.
5) Owners can only use their units on certain days of the year
Unlike timeshares, where owners have specific date restrictions, owners of condo hotel units are able to use their property pretty much at will, based upon the rental program by-laws. This allows owners to take last minute getaways and weekend trips whenever they choose. Some properties do, however, have restrictions on with how many days owners on with units in the rental program can use their unit for free.

Established in 1976 as primarily a residential condominium management organization, Provident Management Corporation quickly evolved into a pioneer of the Condominium Hotel Industry and by 1980 had established one of the first "condo-hotel" properties on the Gulf Coast of Florida. Since converting this existing hotel into a condominium hotel, Provident became a founder and remains a leader in this very specialized industry. Throughout its many years of experience, Provident has established and refined many of the foundations, concepts and philosophies of this business that have become industry standards.

Contact:

Amanda Williams
[email protected]
(407) 838-1729

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Also See:	The Condo Part of Condo Hotels; A Primer on How to Create a Common Interest Development / David Waite, JMBM / The Global Hospitality Advisor / February 2005
	Condominium Hotels May Go Down As One of the Briefest Fads Ever to Sweep the Real-estate Industry; Orlando Seen as the Achilles' Heel of the Condo-hotel Market / July 2007