As many as 15,000 hotel condo conversions could come on the market by 2010, and it could drastically change the vacation home and hotel landscape in orlando. These hotel condo conversions are very unique in that they are individually owned just like a condo or vacation home, but they are set in a hotel setting with a lobby, room service, restuarants, and most are affiliated with a national hotel brand.
Historically hotels have had 1 owner or one corporation which owned all the hotel rooms, now the landscape is going to change by having multiple owners in a hotel. Here is where I see a huge problem for travelers to Orlando in the near future, with having so many different owners the upkeep on most of these properties is going to be a major task. The reason most of the hotels are changing to condo conversions is that the single owner or corporation is not getting the return on their investment that they were hoping for when they bought the property. So now they are flipping these properties into condo conversions and making 50% or more on their money plus releaving themselves of their headace. The problem is that when a corportation could not make the numbers work now they are selling each room for almost double what they paid for it, what makes the new owners think they can do any better.
Can you imagine what is going to happen when an investor of a property purchases a unit for around $125,000, and after expenses of the house keeping and hotel staffs the owner is actually losing money each month. How willing do you think he is going to be to put money back into the unit? The sad truth about the hotel business is that if you do not put money into a hotel they will deteriate quickly.
Orlandovacation.com currently does not work with any hotels which are condo conversions and we do not see this being part of our product mix in the near future. However, with so many new conversions coming onto the market we will probably work with a few, but we will make sure that all properties we sign up meet our high standards.