Condo hotels need management

A leading tourism expert has hit out at criticism of the condo-hotel market, saying a few unprofessionals are tainting what is essentially a sound property investment.

Critics have claimed that the increasingly popular condo-hotel industry, particularly in Las Vegas and Florida, is a bad investment as developers are effectively shifting the financial risk to individuals.

Promises of rental income have not materialised and units in Las Vegas are under foreclosure. Potential investors have even walked away leaving deposits behind.

But Jean Robert Reznik, former CEO of Club Med and Accor and currently advising the Moroccan government on tourism and chairman of Kasamia, believes a few unscrupulous players are responsible for tarnishing the whole sector.

'It's unfair to just throw a stone at this sector when there is a sense of crisis across global real estate in general. Too much construction, too many people doing the same thing at the same time, and the same applies for hotels,' he said.

'What this short term crisis will do, however, is wheedle out the unprofessionals who have over promised and have no serious management company in place to ensure the ongoing success of the hotel establishment. It is these unprofessionals who have tainted the marketplace.'

He believes Condo-hotels are a good long term investment. He advises potential investors to make certain they know who is managing and marketing the product.
'Hotel services should be offered at fair prices and there must be a strong distribution system in place to attract guests,' he explained.

He also warned about companies claiming they can guarantee rental returns of up to 8%. 'They either don't know the business, are inflating the asking prices or are dreamers,' he said.

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