In the last decade, all of the 4 and 5 star luxury brands have embraced the condo hotel concept. Just a few of the premium brands actively offering condo hotels are Four Seasons, Trump, Westin, Hilton, W, Ritz-Carlton, Rosewood, and Hard Rock. It's quite evident that the best in the hospitality industry have adopted the condo hotel as the future of vacation property ownership.



This trend of quality hotel brands taking the lead in the condo hotel boom should not be surprising. The business model of condo hotels are a natural fit for a company looking to minimize risk and maximize revenue. By selling off ownerships in the hotel in a preconstruction phase, developers are able to more easily acquire favorable construction financing from banks. This can save hotel developers millions and millions of dollars and shave the number years it takes them to pay back their loans to the bank.

The condo hotel model has clearly proven to be a financial windfall for hotel developers. The construction debt for a typical hotel project can run from 50 to 60 percent of cost. When the ?condo hotel? element is added, the equity credits the developer can earn from condo hotel presales can provide debt financing approaching 90 percent loan-to-cost leverage. This equates to millions and millions in dollars saved. This allows developers to achieve significant front-end profits on the sale of condo hotels. Lenders also like the condo hotel model. They are more willing to finance condo hotels because they are banking on condo sales that come in the preconstruction phase.

Expect the trend of luxury brands building condo hotels to continue. All the data that's come in over the last few years, continues to suggest that condo hotels are the hottest thing going in the hotel industry and that this form of hotel ownership provides the greatest potential for developers and other stakeholders in a new project.

The locations that most major brands are now honing in on are major urban destinations. Many top brands already have condo hotels in North America's major winter and beach destinations. Now it's a race to put up condo hotels in North America's finest cities. The major cities that have attracted the most attention are New York, Las Vegas, Miami, Chicago, and Los Angeles. Within the next few years don't be surprised to see every major 4 and 5 star brand with a condo hotel in the aforementioned cities.