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Personal Finance Image: The Plaza Hotel in New York Kathy Willens / AP file Hotel-condo hybrids expanding nationwide Concept lures major hotel owners, baby boomers looking for a second home The Plaza Hotel in New York is being converted so that it can sell some o f its units as condominiums. By Mike Schneider The Associated Press Updated: 5:22 pm ET June 7, 2005 ORLANDO, Fla.
He recently paid $735,000 for his 1,100 square-foot suite. The hybrid concept of a luxury hotel that sells some of it units as condo miniums has become one of the most popular trends in the industry in rec ent years. Condo-hotels in the past two or three years have expanded bey ond traditional markets in ski resorts or Hawaii and into other tourist destinations such as Orlando and Las Vegas. Projects also are under cons truction in urban centers like Atlanta, Chicago and New York, where the Plaza Hotel is being converted. Hotel developers like the concept because they spread their financial ris k among the future condo unit-owners. Individual condo owners like it be cause they enjoy the resort-style luxuries, and in many cases the hotel rents out their units when they're away.
In Las Vegas, high-rise condos are next big thing "Anything is at your fingertips," said Machol, who gets 45 percent of the income when the Hilton-run Fontainebleau rents out his suite. The condo-hotel units that are rented are not the same as traditional tim eshares. A condo-hotel unit is purchased by its owner outright while som eone who invests in a timeshare is only entitled to the time that he or she occupies a unit. Hot topic Smith Travel Research, the lodging industry's leading research firm, does n't keep figures on the number of condo-hotels in the United States sinc e the popularity of the concept is so recent. But the hybrid concept def initely is a hot topic, said Jan Freitag, director of client services fo r the Tennessee-based firm. "Every major player, the major hotel owners in the country, are looking a t hotel condos, hotel condo conversions, hotel condo construction to see if it fits their portfolios," he said. The luxury hotel chains including Hilton Hotels, Four Seasons Hotels an d Resorts and The Ritz-Carlton Hotel Co. have brought new credibility to a concept that was used as a tax shelter until the 1986 Tax Reform Ac t eliminated the benefits. "People have a lot more confidence buying into a Hilton or a Four Seasons because they know the name. They know it must be reputable," said Joel Greene, president of the Condo Hotel Center in Mi ami, a brokerage that sells such units. Ritz-Carlton, in fact, won't even manage a hotel without a residential co mponent because of the lucrative nature of the condo-hotel concept, spok eswoman Vivian Deuschl said. The Chevy Chase, Md-based luxury chain fir st became involved almost five years ago with the concept in Washington, Boston and New York. The company recently opened condo-hotels in Dubai and Berlin. "This is an idea that has reached a lot of acceptance," Deuschl said.
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