Condo hotels could work here
Imagine owning a hotel room where you could stay during holidays, and collect rent the rest of the time.
A condominium hotel is a strata-titled hotel unit that is sold to individual investors.
This concept has already taken off in places such as the United States, Europe, Dubai and the Philippines.
At Waikiki in Honolulu, 464 units at Trump International Hotel and Tower were snapped up in one day late last year.
Sales topped US$700 million (SGD1.06billion), with buyers said to pay an average of US$1.5 million for each unit.
This concept could work in strong tourist spots.
If condominium hotels are built here, it would help speed up the provision of hotel accomodation,
and be a catalyst for urban regeneration.
This approach would provide developers with upfront capital, as hotels have very long gestation and payback periods.
Investors would get a low price entry point into the hospitality sector.
It can provide another form of property investment for retail investors.
Returns would be split 50:50 between the hotel manager and the owners, after deducting expenses.
Think through the alternative ownership structure.
There will be legal,taxation and zoning issues.
