Condo Hotels in Argentina
Condo hotels are earning a larger space in the real estate industry these days, a method which allows for a careful mixture of residences and business. This niche of the hotel business started in Miami, and has since gained popularity and success all over the world. It is quickly gaining ground in Argentina, and one particular developer in Cordoba is working with a condo hotel chain to build three establishments in its capital city.
Edilicia Suez, the developers group, is working alongside Mégaron Condo Hotels, building Mégaron City Owners & Guest and Mégaron Casiopea, which will be finished near the end of 2011. A third project, Live! By Mégaron, just recently started construction, and will be inaugurated at the end of 2012. The latter is defined under the concept of Branded Residences; that is, high-level residences with the services and amenities of an upscale hotel.
The difference between a hotel and a condo hotel is that, in the latter, the owner can choose to live in the unit, or hand it over to the chain to rent it out permanently or temporarily. The owner can even choose to only have it available during certain times of the year, and occupy it him or herself for the rest of the year.
Between the three projects, 25 million dollars are being invested, approximately.
Condo hotels are named as they are because they are condominiums with hotel-like amenities and services, and each has an individual owner. Their administration and marketing is handled by the hotel chain, which later distributes the profits to the owners, but they are not owned by the hotel. In reality, it caters more to investors, as each unit is owned by a different owner, and some owners have more than one unit. From a business point of view, it is strictly investment and return, but from the guest’s point of view, it continues to be a true hotel — though perhaps a bit more upscale.
At the end of each period, the chain deducts the working and maintenance costs, and the rest goes to the owners in a form proportional to their investment. In this way, the investor could, conceivably, receive a 10% annual profit, while a department may only bring in 6 percent.
Edilicia Suez, the developer on the project, recently made a strategic alliance with Group RCI, which contains more than 4000 luxury establishments. Now, as of 2010, the owners of the Mégaron units can exchange weeks for stays in any destination in the world.
Many may wonder about the differences between a condo-hotel and a time-share, especially when the exchange is involved. According to the vice president of the Latin American business development sector of RCI, they are two completely different investments, although they are complementary, and both bring their own advantages to the table.
The largest difference is that the owner of a condo hotel suite owns the unit in its entirety, whereas the owner of a timeshare only owns 1/52 of the property, and often only for a set period of time, be it 5 or 99 years. In the case of a timeshare, the owner must carefully plan the vacation time. On the other hand, a condohotel owner carries much more flexibility with the property.
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