What Apartment/Home Owners are Paid

Like owners who place their apartments in Vacation Rental Company programs, Condo-Hotel apartment owners place their apartments in Condo Hotel rental programs.

This video shows how condo-hotel rental companies (sometimes your competitors) pay owners in there programs.

Vacation Rental companies typically will pay owners 25%-35%.

Condo Hotel Programs first apply deductions stated in the Rental Managment Agreement before applying the percentage they share. This percentage is usually stated to be close to 50%. After the deductions, however, the real amout is 43% to 47% of gross reservation revenues.


To reitereate, once you remove "the deductions" (before the multiplier) the condo hotel programs are actually paying apartment owners (3 diamond - 46-47% and 4 diamond - 43%-45%) in comparison to vacation rental distribution of 65%-75%.

An expert witness in appropriate distributions

If you have vacation rental units in condo hotels you will find this intereting.

 

In 2015 the Hardrock condo-hotel in San Diego was challenged by thier apartment owners in a landmark case in which they declared that the Hardrock was not paying them a fair distribution at 43%.

 

The Hardrock attorneys hired me as thier expert because of the many metric studies I had done and published on "what is a typical and fair revenue distribution for condo-hotels.  

 

The Hardrock Condo Hotel won the case because the apartment owners were receiving 43%. This amount enabled the hotel and unit owners to fairly split proceeds.  4 diamond condo hotels typically distribute 43%-45%.

 

It is important to note that condo owners purchasing units in 2005-2006 purchased at highly inflated values before the real estate market collapased.  Those owners may never realize a positive cash flow when mortgages are included.

 

 The reason vacation rental companies are able to distribute so much more to apartment / home owners is because they DO NOT carry the high overhead of the condo hotel program who owns specific commercial units in the condo.

 

Vacation Rental Companies can make the same profit as a hotel (15%-20%) if they guard profits carefully.   

 

About Distribution %'s Paid by Your Competitors

Here again, I provide a screencast so you can see the way we look at your competitors in the market, condo hotels, and what they are paying apartment owners in thier rental programs.

This screen cast was done a number of years ago (2012). It is still relevant. Once again, with regard to other condo hotel videos and metics posted, it does not directly speak to the Vacation Rental business. But because of the extremely similiar attriubutes between each of the business models I think you'll find a lot of it very relivant to understanding specific relevant components. Hope its useful.