Luxury Hotel Development Leans More on Having Condos in the Mix
Skift Take
When in doubt, condo it out: Investors sleep a little easier knowing there's a more reliable income stream like high-end housing attached to a hotel project.
Developers around the world in recent years trimmed back luxury hotel guest room counts in favor of adding condos to a project to boost profitability. Condos will now play an especially important part in helping the luxury hotel sector grow in an uncertain travel climate.
Developers didn’t shy away from building or proposing new locations for ultra-luxury hotel brands like Raffles, Waldorf-Astoria, and Four Seasons during the pandemic.
Nearly ninety percent of the Four Seasons Hotels & Resorts development pipeline includes a residential component. The 1,049-foot Waldorf Astoria Miami, a 205-guest room and 360-condo project slated to begin construction next year, would become Florida’s tallest building when complete.
Accor leaders maintain the company’s Raffles brand is on track to essentially double its footprint within the next five years. The Paris-based company last year inked 17 mixed-use hotel and condo projects across all its brands, a company record that may be short-lived. Accor plans to beat that figure this year.
There may be uncertainty in when travel demand across all sectors returns to pre-pandemic levels but incorporating more condos into luxury hotels enables developers to offset some of the financial risk. That helps win over investors in a notoriously tight lending market, too.
“One hand feeds the other,” said Ryan Sh
