Revenue Management in Condo-Hotel vs Traditional Hotel

cropped-revenue-management-professionals2.jpg Richard B Evans, CHA, CHAE, CRME

This screen cast will discuss the differences between managing & optimizing revenues in the condo-hotel vs that of a traditional hotel.  Some deviations are subtle while others can be challenging and time consuming.  All in all I think you’ll find it an interesting comparison.

Posted in Uncategorized | Tagged , , , , , , , , , , , | Leave a comment

The History of Condo Hotels – Part 1

The condo hotel concept initially became popular in the 1970’s in the US, primarily due to the tax benefits available for Unit Owners.  Many of these tax benefits were rescinded in 1986 but the concept again gained popularity in the late 1990’s and early 2000’s as conventional financing became difficult to attain by developers.  Unit owner deposits and commitments were used to attain loans and also finance projects.  The following is the story of the history of condo-hotels in a three part series.

I’d like to thank Paul Courtnell JR, Equire, one of the pioneers of condo-hotel law, for providing me with the article that became the basis of this screencast and will also appear as the first chapter in my book – “the Definitive Study of Condo Hotels”.

Posted in Uncategorized | Tagged , , , , , , , , , | Leave a comment

Condo Hotel – Owner Statement – Deductions & Accounting

logochp- small logo  Richard B Evans

Sometimes the Condo-Hotel Owner Statement can be confusing both to the Unit Owner and the Accounting Department.  This screen-cast provides a blow-by-blow look at all deductions, BEFORE and AFTER the Rental Management Agreement Multiplier and what effect they have.


Posted in Uncategorized | Tagged , , , , , , , , , , , , , , , , , , | Leave a comment

Is Dubai UAE leading the world in building condo-hotels?

logochp- small logo Richard B Evans

DUBAI UAE, Leading the Condo-Hotel charge…

Condo Hotels are referred to as Apartment-Hotels here in Dubai and the building boom in the UAE sees them being built everywhere.  Apartment sales, average daily rates and occupancy percentages are close too if not the highest in the world with STR Reports showing Dubai with a $1,500+ Dirhams (32 cents to the Dirham, US) with occupancies of 88% to 92% year round.  I am just completing my journey and will be providing contrasts of what is happening in the US to here in the next few screencasts.

Posted in Uncategorized | Tagged , , , , , , , , , | Leave a comment

Comparing Condo Hotel and Traditional Hotel Metrics

logochp- small logo

Metric studies compiled by Smith Travel and PKF Hospitality are the pillars by which traditional hoteliers compare their results to standard results.  While only SEVEN  line items on the Profit and Loss Statement of the Condo Hotel deviate from the traditional structure, they make studies from these institutions ineffective.  We are currently striving to have Smith Travel and PKF (as well as the Board of Uniform System of Accounts) note format changes that need to be made and to collect specific data on these SEVEN line items.

Posted in Uncategorized | Tagged , , , , , , , , , | Leave a comment

Maintenance Department: A Business Within A Business

logochp- small logo Richard B Evans, cha chae crme

honored inclusion May 16, 2013: Hospitality Net 360


[Left Click on the Above Prompt Please]

Breaking from the traditional hotel financial model, Condo-Hotels are inching toward profitability in P.O.M. Departments.  With traditional US hotels running an average POM cost of 4.9% to 5.5% of total hotel revenues (STR HOST 2012), tightly run Condo-Hotels are offsetting the majority of cost in this department;  1.0 to 1.5% seems achievable though Job Orders and Monthly Maintenance Fees.  See metrics presented in the screen cast for more information…

book 2

Video | Posted on by | Tagged , , , , , , , , , | Leave a comment

The right “Owner Relations Manager” is worth their weight in gold

  logochp- small logo

          Choose Owner Relations Manager Carefully 

honored inclusion May 06, 2013: Hospitality Net 360

     <please left click the prompt above>

Aside from the General Manager and Chief Financial Officer in any Condo-Hotel Program,  the Executive whose background must be equally vetted, whose skill set and strengths carefully analyzed, and whose abilities sufficiently weighed , is the Owner Relationship Manager or Owner Coordinator.

This Executive becomes the face of the hotel program and, in so being sets the tone and perception toward the quality of the hotel.

Owner Relations Manager Duties:

·         Maintain copious notes on all unit owner communication in Owners Ledger in PMS System

·         Send newsletters to owners in hotel program.

·         Provide updates on Board of Director meetings and issues discussed.

·         Attend BOD meetings when possible and when critical issues are happening at the building.

·         Provide Unit Owners with recommendations on the hotels preferred candidate picks for elections.

·         Solicit pro RMA unit owners to serve on the Board of Directors.

·         Collect necessary absentee ballots and track vote envelopes received for annual elections.

·         Respond to all owner communication within 24 hours.

·         Notify unit owners if and when unit needs to be taken out of rental rotation for 2 days or more.

·         Share Oversight responsibility of bringing units back in rental rotation in a timely manner. 

·         Control timing when possible of removing units from rental rotation.

·         Prepare in advance to remedy issues in units at appropriate times.

·         Communicate any and all discontented owners or mishaps to the General Manager.

·         Attend a weekly Revenue Management meeting to answer owner questions about market conditions


·         Introduce new unit owners to hotel program

·         Review RMA contractual specifics with potential owners considering the hotel program

·         Take physical inventory of unit before entering into hotel program.

·         Schedule installation of equipment and services to units entering the hotel program

·         Recruit NORMA units (no RMA) owners to participate in hotel program.

·         Make arrangements to use NORMA (no RMA) units when hotel is oversold.

·         Insure that all NORMA units borrowed for rental use have appropriate insurance in place.

·         Negotiate with NORMA unit owners on rates to be paid for borrowed units (if and when needed).

·         Make sure that all liability insurance policies are in place BEFORE units are placed in the program

·         Make sure that all liability insurance policies remain in place.

·         Make sure that liability insurance policies are appropriately endorsed.

·         Remove any unit from the program in which insurance is not in place, for any reason.

·         Track periodic reports from the housekeeping department about the condition of each unit.

·         See that extermination services are scheduled and provided

·         Schedule heavy duty cleaning and scheduled maintenance and bill the same

·         Bill owners for services performed under the dollar threshold amount in the RMA

·         Bill owners for replacement parts needed in units (i.e. batteries, bulbs, air filters, etc.)

·         Bill owners monthly fee to cover replacement parts.


·         Schedule at least one capital project per year to accomplish in all units (i.e. – carpets, tv’s, etc.)

·         Contact Unit Owner for permission to take bids or repair items that need attention in units.

·         Order FF&E when needed and when permission is received

·         Discuss the use of Reserve Funds for annually scheduled projects and other possible needs.

·         Track and report the balance in Owners Reserve Accounts (in room).

·         Reserve funds lacking, discuss whether hotel program can provide unit owner with 3 month terms as

o   an incentive to renovate units.

·         Update prices on all in room Furniture & Equipment addendum that is attached to RMA annually.


·         Adhere to RMA requirements in assigning the complementary use of units.

·         Adhere to RMA requirements in allowing owners to occupy their own units.

·         Accept and track Owner Reservation requests and owner guest reservations.

·         Inspect and insure superior condition of unit before owner visit and periodically during year.

·         Inspect all units in the hotel program at least once a year and record blemishes and work necessary.

·         Schedule meeting with Owners visiting property to discuss conditions and revenues.

·         Provide General Manager with advanced notice of owners visiting or staying at property.


·         Adhere to any agreements to pay condo maintenance on behalf of Unit Owner.

·         Manage and block reservations

·         Manage and track distributions

·         Manage and track all fixed income rooms.

·         Work with Chief Engineer in preparing Work Orders for repairs and maintenance

·         Insure that all Work Orders include agreed upon profit markup.

·         Prepare labor and material estimates on all quoted jobs.

·         Reconcile all Work orders at each periods end         


Posted in Uncategorized | Tagged , , , , , , , , , | Leave a comment

The One Year Expedia Bump – Data crunchers beware! screencast

4923_4x6@72 - Biz 1  Richard B Evans CHA CHAE CRME              logochp- small logo

honored inclusion April 19, 2013 Hospitality Net 360

A new commission collection model is being put into play by Expedia in 2013 that will affect what unit owners in condo-hotels see on their Owner Statements and what hoteliers see on their STR Reports.  Both condo-hotel and traditional hotel executives be aware of the “bump up” of Average Daily Rate & RevPar from 2012 to 2013 due to Expedia’s business model change.

Posted in Uncategorized | Tagged , , , , , , , , , , , , | Leave a comment

The One Year Expedia Bump – Data Crunchers Beware! – narrative

4923_4x6@72 - Biz 1 Richard B Evans, CHA CHAE CRME                               logochp- small logo

 “The One Year Expedia Bump”

Expedia’s Collection Model Changes – Data Cruchers Be Aware!     


i). Changes that the condo-hotel unit owner will see comparing year over year results.

ii). Intellectual Considerations – Year over year changes effecting STR Report data & analysis

Our metric model shows the ‘cause and effect’ analysis (exhibit C) of Expedia’s change

What if I told you that the ADR and Rev Par changes on Exhibit C (below) were ALL due to the change in Expedia’s Commission Collection Model?!

A new commission collection model is being put into play by Expedia in 2013 that will affect what unit owners in condo-hotels see on their Owner Statements and what hoteliers see on their monthly STR Reports.


The On-Line Travel agent (OTA), introduced a different commission collection model upon entering the market a number of years ago, in which guests booking reservations through the website are required to pay the hotel directly and in full at check in.  In turn, the condo-hotel (or traditional hotel) would be required to pay the percentage fee commission owed to, by cutting a check for the established percentage rate agreed upon and multiplied by the Gross Room Revenues received.

Since inception, (and most other OTA’s) collected gross room revenues directly from guests and, in turn, would remove their commission fee before paying the condo-hotel (or traditional hotel) for the guests stay.

Sales tax challenges experienced by OTA’s (because they have been collecting revenues directly from guests) are believed to be a significant factor in making this change to the commission collection model.    In effect, the move no longer will require Expedia (or any other OTA who follows) to be looked to for sales taxes.

i). the Gross Room Revenue change in revenues reported to condo-hotel unit owners.

Exhibit A                                                                              Old Model          New Model

Gross Room Revenues Collected by OTA:                              $1,000                   $       0

Gross Room Revenues Collected by Hotel                                       0                   $1,000

**Fess Removed by OTA:                                                             <  250>                           0

Owner Statements in 2012 showe                                 $  750                            – 

Hotel pays Expedia &                                                                        < 250>  

Amount collected by hotel for reservation                 $  750                     $  750

**IF commission were equal from both OTA’s the aforementioned would be the result.  Commission, however are not always equal.

 THE ONLY CHANGE that will be seen is the appearance that Gross Room Revenues in the Condo-Hotel have increased.   THERE SHOULD BE NO NET CHANGE TO THE OWNERS CHECK.

Exhibit B    

Condo-Hotel Owners Statement                      Before-2012                     New-2013

Gross Room Revenues from Expedia              $         750                            $  1,000

Less: Travel Agent & OTA commissions          <         50>                           <    300>

Less: Reservation Fees                                         <        10>                            <      10>

Less: Credit Card Fees                                          <          5>                            <        5>

Total Deductions from GRR                               <        65>                            <    315>

Net Gross Room Revenues                                          685                                      685

Percentage Representing Unit Owner Share            46%                                     46%

Amont due to owner before deductions                     315                                       315

Linen Fee, etc.                                                           <      15>                               <      15>

CHECK TO OWNER                                            $    300                                 $   300

ii). Intellectual Considerations – the one year Expedia bump!

The real change that takes place in looking at data in 2012 and 2013 (from the Expedia Commission Model Collection change) comes about when analyzing your Average Daily Rate and Rev Par results each month in reports like STR, where even small dollar jumps can be deemed to be significant. Further comparisons to your competitive set will also change year-over-year depending upon each hotels sales mix.

Condo-hotels (and traditional hotels) with excessive reliance on OTA channels (of which Expedia always is a significant part) to generate Gross Room Revenues will show a higher 2013 Average Daily Rate and REVPAR rate, even if sales have been the same as the prior year.  The difference will be the 20% to 30% fee commission paid to Expedia.

As no one can ever know what each member of your competitive sets sales mix is, for one year you could see a “superficial” bump up of ADR and REVPAR.

Our intellectual review also shows that the “Expedia One Year Bump” will have an effect on components relating to Incentive Bonus Plans in many Hotel Management Agreements!

Exhibit “C”


Posted in Uncategorized | Tagged , , , , , , , , , , , , | Leave a comment

How Important is Owner Distribution Percentage?

logochp- small logo                                                             honored inclusion: Hospitality Net 360

book 2    4923_4x6@72 - Biz 1  Richard B Evans, CHA CHAE CRME

Posted in Uncategorized | Tagged , , , , , , , , , , , , , | Leave a comment

Comparing Condo-Hotel and Traditional Hotel Metrics


logochp- small logo

Posted in For the Hotel Operator, Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

SEC Allows No Pooling of Revenues or Expectations of Profitability in Condo -Hotel Sales

logochp- small logo  4947_4x6@72 Biz 2   Richard B Evans CHA CHAE CRME

Written: February 5, 2013

            The offer and sale of a condominium by a developer can constitute the offer and sale of “securities”, subject to both federal and state securities laws, if the “totality of the circumstances test” is not met.  This test has become increasingly more difficult to define and understand (as of the summer of 2011) when an appeal was made to the 9th Circuit Court.


The totality of the circumstances test:  A test used to determine whether certain constitutional rights of a defendant have been violated.  The test looks to all the circumstances surrounding the alleged violation, rather than to any particular factors; as had been the case before.  While some factors may recur more frequently than others, the relative importance of any one factor depends upon the particular facts of a case.

The Definition of an Investment Contract:  a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or third-party (hotel operation); Or, when a purchaser is no longer buying real estate, but “investing in a business enterprise“ and can therefore be deemed to be purchasing a “security”.

What would happen if condo-hotel sales were deemed to be “securities”?

(1)     The registration of securities by developers would be a costly, time-consuming and would likely drive the price of condo-hotel units higher.

(2)    Claims made based on misrepresentation or fraud would look to securities law for remedy.

(3)     Salesperson would need to be registered as broker-dealers

Guidelines being observed, by the majority of developers of Condo-Hotels today in selling units.

1). under no circumstances are revenues in a rental management program to be pooled with other participants. The pooling and distribution of revenues to unit owners, whose unit may or may not have been occupied during a specific period, constitute the sale of an investment contract and not the sale of real estate.

2). the purchaser of a unit in a condo-hotel cannot be required to enter any Rental Management Program.  He or she must be given the option of allowing competing vacation rental companies or realtors to bid for their business or the owner must be given the option of renting his/her unit themselves.

3). The purchase of a unit in a condo-hotel cannot be “intermingled” with the specific enticement of a rental management agreement that will bring or estimate revenues or tax benefits.

4).  The real estate sales person and the rental management sales person must be exclusive and no compensation may be paid to the real estate sales person if a rental management agreement is signed.

5).   advertising, sales literature, promotional schemes, and/or oral representations may never promise economic inducement or benefit derived from the promoter or a third-party.

6). No significant restrictions can be placed on the purchaser of a unit in a condo-hotels use.

7). The Sales Agreement and a Rental Management Agreement must be separate.  Prospective buyers that ask for more information about the Rental Management agreement should be given options and sent to companies who may represent details under certain circumstances and provide “raw data” on what comparable property rental management programs are producing.

8). There can be no expectation of PROFIT.  The acknowledgement of NO EXPECTATION OF PROFIT is often required by developers and signed off on by the buyer.

9). Rental Management Agreements are executed after the Sales Contract is executed.

** the Developer of the Condo-Hotel project CAN voluntarily register with the SEC and have his/her Realtors do the same (becoming certified to sell securities), enabling them to sell units at the project deemed to be “security” transactions.  In this case the property may POOL their REVENUES and share them amoungst unit owners. Keep in mind that this is an expense proposition for the Developer. 

More information on the subject can be obtained from Mark F Grant Esq., Greenspoon Marder 954-527-2404 or



SEC v. W.J. Howry Co. (1946) – HOWRY provided the test for determining whether a transaction qualified as an investment contract and hence, a security.

1973 SEC Public Release NO 33-5347 – “Offer and Sales of Condo or Units in a real estate development”

2002 Intrawest No-Action Letter – one of the clearest descriptions of how to conduct a condo unit sale w/o stepping over the line.

MAY 15 2012 – Salameh et al v Tarsadia Hotels, et al – California

2011 US District court for Southern District of California dismissed the above referenced complaint.

Appealed to the 9th Circuit 2011 – disregarding past Intrawest No-Action letters by SEC.  SEC argues that the overall product structure should be analyzed; not just the meticulously followed sales process.

References used for this article:

The Condo-Hotel: When Might the Securities Laws Apply?   By Bart Bartholdt ©2005 Graham & Dunn PC

Condo-hotels: stuck between a Hard Rock and the SEC rulings.  By Christopher Payne; Ballard Spahr LLP, Denver

Posted in Uncategorized | Tagged , , , , , , , , , , , , | Leave a comment

Exit Surveying Guests at Condo-Hotels

logochp- small logo  4947_4x6@72 Biz 2  Richard B Evans CHA CHAE CRME

Posted in Uncategorized | Tagged , , , , , , , , , , , , , , | 8 Comments

Having trouble viewing screen cast videos? Here’s a quick fix

Posted in Uncategorized | Leave a comment

Condo-Hotel Program vs. Realtor vs. Homeaway (, etc.)

logochp- small logo    4923_4x6@72 - Biz 1  Richard B Evans, CHA, CHAE, CRME

Apartment owners in Condo Hotels often ask whether they should place their unit in the hotel program, have a realtor manage the unit or manage the unit themselves in using Homeaway, VRBO or the like.  This analysis provides insight into those choices.

See Screen Cast below…

Posted in Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , | 4 Comments

Condo Hotels – the Good, the Bad and the Ugly – taking the Mystery out of Condo Hotels and addressing Myths and Misconceptions

logochp- small logo     Richard B Evans, CHA, CHAE, CRME

The Definitive Writing on Condominium Hotels – Secrets unlocked…. here!

For the past 12 years (of a 25+ year hotel executive career) I have dealt with every aspect imaginable with regard to Condominium Hotels.  Certified in Hotel Accounting in 2002 (CHAE), Hotel Administration in 2003 (CHA), Hotel Revenue Management in 2009 (CRME) and participating in Executive Training at Cornel University in 1994 (GMP) I now serve as an EXPERT in the Condo Hotel field.  Currently my roles include that of Asset Manager, Advisor, Advocate, Owner Representative and/or Consultant for 3 and 4 diamond properties and in conjunction with Unit Owners, Board of Directors, Hotel Program Owners, Receivers, Judges, Attorneys and Certified Public Accountants.

12 years of condo-hotel service has provided particular insight into where Hotel Programs go astray, why owners have such mistrust and, I dare say, areas in which some hotel programs have not been forthright or transparent.  I have written Hotel Management Agreements (“HMA”) and Rental Management Agreements (“RMA”) with attorneys specializing in the same; providing important insights from the hotelier and also from the Unit Owners perspectives in order to provide for fair and balanced agreements.

     Condo-Hotels do work when carefully managed!  If the metrics in your particular condo-hotel are not working and adequate returns are not being provided to owners it means that (1) revenues are not being correctly driven to the property, (2) expenses are not being kept within historic standards established and proven in the industry and (3) quality control throughout the property is not maintained.  This all can be fixed.

     Many condominiums are now considering the acquisition of their hotel programs and in so doing, taking the reins of the hotel business in hand and, in turn enabling the realization of higher profits.  These profits are seen through (1) higher distributions to unit owners in the hotel program and/or (2) sharing in the profitability of the “ancillary revenues” (valet, restaurant, beach and gift shops) by all.  What’s more, new Hotel Management Agreements can be drawn that are fair and new RMA’s can be written enabling those who participate to earn the maximum allowable after a fair Management Fee (Operator Fee) – 3% to 5% of gross revenues.

The purpose of this BLOG is to provide the reader with insights that were never before available about the inner workings of the Condo Hotel.  Areas to watch, ways to increase your return and MEASURABLE STANDARD METRICS in the industry that you can compare your program too will be provided.   Answers to age-old questions like how much should my unit be generating, are we generating amounts equal to similar condo hotel properties and are the rates being charged high enough, will all be answered.

I am pleased to tell you that I am writing a book entitled “The Definitive Study of CONDO-HOTELS” (to be released on April 1, 2013) and working with several universities in creating ciriculums on the same.

The best BLOGS are ones in which people share their experiences so please do not hesitate to do so.  I can also be contacted at . Thank you for your interest.  I will update our BLOG on regular basis.


Richard B. Evans, CHA, CHAE, CRME, 786-897-0652,,

Posted in Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , | 7 Comments