What follows are a few important points to be taken into account with this style of development, gleaned from many years of problem solving. They stem from experience with some enlightened owners and developers who have been ready to acknowledge they know little of the complexities and unforeseen elements of the business and want a guide through the maze.

The known advantages of the condo hotel model include:

• By raising and using condo purchasers' funds there is less need for bank finance, thus reducing the overall development cost.
• Stage payment purchase plans for purchasing condo units encourage selling off plan prior to and during construction, making it easier to get an inflow of funds -- this means that a development gets started quicker and the developer receives purchasers' funds at strategic stages of the construction process.

1. Create the structure of the development and rental and associated agreements so that they are fair and equitable for both unit owners and developers. Inequitable agreements usually cause serious trouble downstream.
2. Treat owners with respect and create positive, open, sincere and active channels of communication. Your owners are your ambassadors. To have owners speaking positively about you and your development speaks well for the future of this and successive projects.
3. Develop a strong service culture within the development company. Ensure that this culture is standards-based, honest and respectful; holding all to account for excellent customer and employee satisfaction.
4. Consider carefully and plan for all aspects of the customer experience. A deficiency, even a small error, in one single aspect can have a detrimental effect on the entire project.
5. Understand the reasons and motivation of the potential owner for the purchase -- personal use, lifestyle, rental revenue opportunities, and capital appreciation. A combination of these works well; they seldom work as a pure, passive investment.
6. Recognise that condo hotels/resorts generally work best in leisure and vacation destinations. The model is typically successful in an upward market, and can be value destructive in a market turning down. Here, diminishing room rates make for a lesser amount of room revenue available for distribution; also condo unit sales are less likely and existing condo purchasers may not complete their purchase if market conditions become difficult.
7. Make sure the unit owners understand the difference between a resort programme and an apartment rental. Many condo resort owners tend to confuse the two.
8. The net room rate revenue is shared by the management company and the purchaser, perhaps making it difficult in challenging times for the management company and the condo unit owner even to cover costs, let alone to make a decent return.
9. The resort operator or Management Company must understand and appreciate the need to work successfully with unit owners, maintaining awareness that it has to deal with several owners - the condo purchasers and not just one traditional hotel owner. Simultaneously the management company must both work with the Property Owners Association (P.O.A or Strata) and create a sense of community.
10. The management company needs to run the hotel operation and the condo owner's association (P.O.A or Strata) and keep accounts for both operations. All expenses must be justified and apportioned fairly between the hotel operation and the condo operation -- which needs sensitive and logical expertise.
11. Developers and management companies must never become complacent; each property is different from another and can be improved, drawing upon and creatively using the experiences gained.
12. There is no substitute for experience, there are many who suggest they have expertise and in the end only practical hands on experience can deliver value to all parties in very complex environment.