What is a Condotel in Hawaii? Understanding the Hybrid Model

With its pristine beaches, lush landscapes, and vibrant culture, Hawaii has long been a coveted destination for tourists and investors alike!

The allure of the islands is undeniable. They offer a slice of paradise to those who seek it. In the realm of real estate, Hawaii presents a unique investment opportunity in the form of condotels.

The word itself tells you its meaning— CONDOTEL. Could you guess? This is a mix of hotel rooms and condominium units.

Want to know more? This article provides a comprehensive guide to understanding condotels in Hawaii by exploring their features, benefits, and considerations for investors and real estate enthusiasts.

What is a Condotel?

In straightforward terms, the condotel is short for “condominium hotel” — a hybrid real estate model that combines the autonomy of owning a condominium unit with hotel services and amenities.

In Hawaii, a condotel typically refers to a condominium building with an entrance lobby and a front desk reception area operated by a hotel brand.

You’ll also find maintained common areas and recreational facilities outfitted with shared amenities like resort-style swimming pools and barbecue grills.

This unique arrangement lets owners enjoy the benefits of owning a vacation home and the amenities they would find at a hotel.

Key Features & Benefits of Condotels in Hawaii

Condo hotel concept in Hawaii are distinguished by several hallmark features that set them apart from traditional residential condominium buildings. Here are some of the standout characteristics typically found in Hawaiian condotels:

Hotel Amenities

Condotel owners, guests, and residents are treated to a luxurious experience with access to a wide array of hotel-like amenities. They typically have a stylish entrance lobby, swimming pool, and barbecue area. Some of these buildings in Hawaii even offer other hotel amenities like on-site saunas, hot tubs, state-of-the-art fitness centers, on-site restaurants and cafes, and tennis courts.

Prime Locations

Whether it’s lavish beachfront properties with stunning panoramic views and direct access to the sandy shores or chic urban locations nestled in the vibrant heart of Honolulu’s bustling city life, condotels offer a unique blend of sophistication and convenience in some of the most sought-after spots across the Hawaiian islands.

Flexible Use

Owners of condotel units have the flexibility to use their property for personal vacations while renting it out to guests during their absence. This unique feature allows for a hotel experience and personal enjoyment of the unit as well as generating income.

Create Your Home Away from Home

Whether you purchase a condotel unit that needs to be refreshed or has already been extensively renovated, you can customize it to suit your preferences. Whether you envision a modern, sleek design or a cozy island escape, your property can be designed to be your personal Hawaiian sanctuary.

Same Sounding, Different Property— Condos & Condominiums

Even though condos and condotels sound pretty much the same, they’re totally different. Some people, however, still mix them up, so here’s the lowdown on what sets them apart.

Condotels and condominiums may sound alike, but they’re worlds apart. In a condotel, you can earn passive income by renting out to hotel guests for short-term stays. Plus, you get all the perks like housekeeping, concierge services, and other hotel amenities.

But don’t expect to grab a conventional mortgage for a condotel; you’ll usually need to pay cash. These units come fully furnished, giving you little room to add your personal touch, and are typically bought as vacation homes for short-term stays.

On the other hand, condos don’t really profit from short-term rentals. They might offer hotel amenities like pools, gardens, and saunas, but nothing like the full-service experience of a condotel.

The big win here is that you can snag a condo with traditional homeowner loans. Whether you’re looking for a primary residence, a second home, or an investment property to rent out, a condo gives you options. Plus, as a condo owner, you have full control over the interior style and design, allowing you to make it truly your own.

Condotel Management Options

Good management is crucial for the success of a condotel investment. It’s the key that ties together customer service, property maintenance, marketing, and finances. Investors can pick from different management styles to match their goals, guaranteeing profitability and sustainability for their ventures in the long run.

Self-Management

Self-management can be a viable option for investors who prefer full control over their investments and have the time to dedicate to their success.

This approach entails the property owner managing all aspects of the rental property, such as advertising to attract guests, handling bookings, coordinating housekeeping, and overseeing maintenance tasks to ensure the property is well-maintained for renters.

In-House Condotel Management

This approach involves entrusting the unit to the hotel or resort managing the condotel and is called “joining the hotel pool.” By doing so, you and your guests can enjoy a variety of hotel amenities, including front desk concierge support for added convenience during your stay.

While this arrangement offers such services, the management fees tend to be on the higher side due to factors like elevated operational costs associated with maintaining these additional features.

Professional STR Management Company

Vacation rental owners are increasingly seeking specialized short-term rental (STR) management companies that can provide a reliable, third-party management solution.

Choosing these companies can benefit condotel unit owners who desire high standards and a hands-off experience while getting better returns with lower management fees.

Local vacation rental management companies, like Midway Vacations, offer comprehensive services — from advertising and handling all guest interactions to property maintenance and housekeeping services to ensure a seamless short-term rental experience. These companies have the expertise, resources, and experience to maximize occupancy rates and rental income while minimizing expenses.

Where to Find Condotels in Hawaii?

Waikiki on Oahu is a prime location for condotel investments that attract a diversity of travelers throughout the year!

The proximity to tourist attractions and the strong vacation rental market in the area ensure a steady stream of potential income and visitors for investors. As a resource, you will find a list of Legal Vacation Rentals In Oahu on our blog that includes which buildings are condotels and which are hotels.

It’s highly recommended that you connect with a knowledgeable real estate agent who specializes in this niche market to thoroughly understand condotel investments and identify legal short-term rental investment opportunities.

These experts will be able to provide valuable insights into the condotel industry, helping you choose properties that match your investment criteria and financial goals.

And the best part? At Midway Vacations, our team is your ultimate solution! We can assist you with your real estate search in Oahu and Maui, oversee your renovation projects, and seamlessly manage every aspect of your short-term rental for you.

FAQs

How does a condotel differ from a traditional condo or hotel?

A traditional condo is typically used exclusively by its owner or rented out long-term, while a hotel consists solely of short-term rental units. Unlike traditional hotels, a condotel combines these models, offering individual ownership of units with the option to participate in a rental program typically managed by the hotel operator.

Are there any restrictions on the use of a condotel unit?

Yes, owners may face restrictions on how long they can stay in their unit each year and rules governing its rental. These restrictions vary by property and should be reviewed in the property’s governing documents and rental agreements.

Are condo hotel units a good investment?

The investment potential of a condotel depends on factors such as location, market demand, rental rates, and management fees. While they can provide rental income and personal use benefits, it’s important to conduct thorough research and consider the associated risks and costs.

Let’s Start Your Midway Journey Now

If you’ve been contemplating investing in Hawaii real estate, check out the various options with condotel investments. Plus, with Midway Vacations by your side, you’ll have a reliable team to assist you every step of the way, from property search to management and beyond.

Let’s kick off your Midway journey now and unleash the full potential of your Hawaiian investment property! Reach out to our team today to discover more about our services and how we can support you in making your dreams come true while maximizing your rental income.