Condo-hotels are a rich person's time share scam

There are some of these in NY like 1 CPW, where the hotel rooms are worth the same today as in 1995, or the Carlyle and Sherry Nederland where the common charges are the highest in the city and apartment prices low to reflect it.

Who could possibly think it's a good idea to buy a property where you're committing to pay a for profit entity whatever they demand into perpetuity? At least if you're actually staying at the Four Seasons you can leave and stop owing. Condo-hotel owners are stuck in Hotel California, forever at the mercy of some management company who sees them as cash cows to be milked.

I would never buy into one of these, but I am guessing part of the appeal to buyers is that they can rent out their unit through the hotel when they are not using their unit, rather than had they owned a condominium , they would have to become a landlord and manage the rental process or hire a property manager to do so. Also many condos have restrictions on minimum lease duration such as no rentals less than 30 days. I am guessing for many hotel condos there are no such restrictions. But I’m guessing in these hotel condos, the management takes a large portion of any rental to guests when not in use, and the owners doesn’t make very much at all. Also I don’t understand the argument that buyers want a condo with “hotel style” amenities. Many luxury condos in NYC and elsewhere have luxury amenities and aren’t hotels. You just have to willing to pay for said amenities…

George/Turbo, Agree. It is all a sales job on projected numbers and there are always suckers. The number are usually reasonable at the beginning but over time, more and more of the maintenance get shifted to the unit owners and "promised" high occupancy when they aren't using their condo doesn't materialize. Units also get old and don't get the same rental price increase as the maintenance.

Seems like the obvious here is that if operating the units as a hotel was so profitable, they’d not be selling the units on to individuals ..

Instead they are selling onto individuals while maintaining management control so it’s like unit owners are playing in a casino against the house.

I should also mention when I did listen to the sales pitch for one of these hotel-condos (in Montreal), I was told certain dates were blocked out to owners, ie, during holidays like Christmas and New Years, owners could not use their units. So it seems the management was retaining the option to operate the room like a normal hotel during the most profitable/popular times like certain holidays, then during the slow season they make then available for the owner, when they might otherwise simply be vacant. So it’s win-win for them. If I were to buy one of these I want the right to use it whenever I want

The only positive amenity I see in condo-hotels is the maid service. The rest of it, I can get elsewhere.

Speaking of unprofitable hotels and business plans that rely on others picking up the bill:

https://nypost.com/2024/06/17/business/nyc-four-seasons-to-finally-reopen-ending-battle-for-ty-warner/

At least that bit of 57th St will now be active again (and I really liked the lobby lounge/bars).

I’m sure those maintenance fees will have people beating down the doors to buy...

It all comes down to the governing documents; there are those where the owners are in control, and there are those where the owners have no hope of ever gaining control. This is not unlike the state of play with failed new developments where the developer turns large swaths of the unsold development into rental units and retains control over the board (and all the amenities, and thereby the monthly CAM) with the Jennifer Realty disclosure in the offering plan. Early buyers in a failed development are at the mercy of the developer-controlled board in what is effectively a rental building.

The Four Seasons people said the quiet part loud:

The new units “would stabilize the operating costs with full-time residents paying hefty maintenance fees,” the source said.

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I looked at 1CPW several years ago. The Trumps charge a huge management fee when they rent it out, and they charge you for every day that you occupy too - I think it was $125 or so. Then you also pay common charges and taxes. There was no way to get the numbers work even if the places were free. Which is the case for most timeshares or "fractional ownership opportunities"

@George - When you say "no way to get the numbers to work," I think the only way the numbers make sense is if you view fractional ownership as a hotel substitute and you would otherwise stay in a $1000/night hotel room in whatever city you are looking at for at least 60 nights per year. The Phillips Club is the gold standard in this area, and even the outfit behind that operation (Millenium Partners) has abandoned future projects because the small TAM has already been addressed.