Condo hotel

One of the goals which we are working towards is the re-opening of Isla de Oro as a condo hotel. The idea is not new: In the past, Isla de Oro was already a condo hotel. Now, the condo board and a group of owners - at the initial urging of the owner of unit #813 - are working at making this a reality again.

WHY A CONDO HOTEL?

Bringing back the condo hotel concept to Isla de Oro will increase our property values.

In the late 1990's the owners of an apartment building called "The Mutiny" (in Coconut Grove, Florida) turned it into a condo hotel. The Mutiny had been built in the early 1970's, and by the time it was 25 years old the owners decided to do something new to increase the value of their real estate. They gutted their property and created a condo hotel with tremendous success. The Mutiny’s prices from beginning to sell-out increased a record 10 times.

Condo-hotel units are sold to individual investors who may use their unit when they want and place it into an organized rental program when they’re not using it. Rental revenue is shared with the operator and helps defray the unit owner’s expenses.

Unit owners are more likely to receive a higher level of rental income by being in a rental program than renting it out on their own. In such a program, the owner will not need to worry about any maintenance, upkeep or management issues because these are all handled by a professional management company.

The operator of the rental program, in exchange for a share of the revenue, markets the units as a hotel, takes reservations, operates the front desk, and provides the services hotel guests expect, such as housekeeping, food and beverage, and concierge.

HYATT REGENCY AS PREFERRED OPERATOR

In the past, Isla de Oro was initially managed by Islaservi, an inhouse company not affiliated with any brand. For nearly two years in the early 1990's it was then managed by the Spanish MELIA Group, operators of luxury hotels under the Five Star Melia brand. When the contract with Melia expired, no new operator was brought in.

In 2002, our general manager at the resort was a Spaniard who had previously been the general manager of the Baghdad Hilton, a five star hotel in Baghdad, Iraq.

For our re-launch of a condo hotel we would like to bring the Hyatt brand on board, rebranding Isla de Oro as a Hyatt Regency. We have not yet established concrete terms with Hyatt and no signed agreement exists. In order for us to commit to discussions, the following minimum conditions must first be met:

• Basic infrastructure maintenance must be completed. Part of the work has been completed (such as electrical upgrades) and part of the work is still underway (painting and stucco work on the exterior).
• Commitment from owners to the rental program. A minimum of 40 units have to be available to the rental program, with 20 of those on an exclusive (full time) basis. For this, we need more international owners, and we are currently working towards this goal.
• Units for rental must be upgraded. Note, however, that depending on the details of the agreement which gets negotiated, the hotel operator may be willing to undertake and finance the upgrade in return for rental program commitment. This is the model used by the Best Western chain's Venezuelan operations, among others.

Once an agreement has been negotiated, it will be put to a vote among owners at a general assembly. If rejected, we may re-negotiate with others operators, such as the Viva Wyndham brand which is an informal/holiday-oriented line of hotels operated by Wyndham.

EXISTING LEGAL STATUS: WE ARE ALREADY A CONDO HOTEL

Isla de Oro currently has legal status as a condo hotel. We were founded with government guarantees under an organization called Corpoturismo, for the specific purpose of establishing a condo hotel (or "aparthotel", as the concept is known in Venezuela).

This means that if we re-initiate operations as a condo hotel, no change in legal status or bylaws are required.

The architect of Isla de Oro, Jack Dornbusch, is a leading hotel architect who is affiliated with the Hilton Group. He is also the majority shareholder of the operations of Embassy Suites in Venezuela. When he designed Isla de Oro, he designed it to be a five star hotel and resort. Among things of note, each floor already has a linen room, and connections for washers, icemakers, etc. By renovating and opening a condo hotel on the premises, we are returning to our roots and merely recreating what Isla de Oro already stood for in the past and when the Five Star Melia group operated the property.

WHY THE GOAL OF A CONDO HOTEL?

Appreciation really is the best selling point for condo hotels, in part because there are far fewer condo hotel units on the market than traditional condos. This goes double for condo hotels built on prime oceanfront lots, such as Isla de Oro.

Compared to buying a unit in a straight condominium, a condo hotel is a better investment. When you are ready to sell, you not only have the building’s amenities to offer a potential buyer, but also the services of a quality hotel that you just don’t get in a straight condo. When reselling a condo hotel unit you're selling not only the actual unit but also the lifestyle that comes with an amenity-filled, high-service property.

Unlike timeshare, with a condo hotel you receive fully deeded ownership to the property which is not shared with others. Like a timeshare, you have the option of finding your own renters or placing your condo hotel unit into the rental program. You may participate in the rental program and receive a portion of the revenue it generates any time that you are not occupying your unit, whether it be for one night or 365 per year.

See also:
»The Mutiny, Coconut Grove (FL)
»Why Condo Hotels Are a Hot Concept