When we say the words “living in a hotel,” what’s the first image that comes to mind? Eloise at the Plaza? That one Hugh Grant character in Two Weeks Notice who lives in the penthouse of a NYC hotel? Truthfully, residential hotel life is nothing like the movies—it’s better. Yes, pop culture gets it right in that taking up residence in a hotel does come with all the amenities. But it also offers independent living in your chosen destinations most desirable buildings. Imagine having full ownership of a two-bedroom within a hotel—but never having to change the lightbulbs, and always having world-class chefs working on site. In the current era of domestic and heavily distanced travel, and working from home, the residential hotel market is booming. To learn more about the value of residential hotels, we tapped Tina Necrason, Executive Vice President, Residential at Montage International. She oversees Montage Hotels & Resorts and Pendry Hotels & Resorts’ residential business. With Necrason’s insight, we’ve gathered everything you need to know about residential hotels, and how they’re serving buyers well amid the pandemic—and following the pandemic.
What Is a Residential Hotel?
Buying a suite in a residential hotel gives buyers the best of both worlds; the comforts of an apartment in a luxury building and the amenities of a hotel. “The service extension of the hotel is one important factor however, [the experience is] fully comprehensive. It’s also about property management, care and maintenance, HOA oversight, personal touches, and design, all with the intent to preserve and enhance the real estate aspect of residential hotel living,” says Necrason.
As residential programs develop at Montage and Pendry properties throughout the U.S. and in Mexico (in places like Park City, Utah, Big Sky, Montana, and Los Cabos, Baja California), Necrason has seen how residential hotel residents adapt to “fully integrated and fully serviced living.” She says some residents opt for room service, while others have the on-site chef prepare dinner in their own kitchens. Others rely on the hotel staff to change their lightbulbs or help customize their interiors.
“Everything is catered to personal needs with the freedom and benefit of being uniquely positioned to enjoy the hotel’s services and amenities,” explains Necrason.
Residential Hotels as a Secondary Residence or a Vacation Home
Buyers looking at property in residential hotels are generally looking for a secondary residence, though the amount of time they spend there varies. There are hotels in business hubs like Miami and New York City that service residents who spend quite a bit of their working year in the residence. Within the Montage Hotels & Resorts and Pendry Hotels & Resorts portfolio, the residential hotels are in highly coveted vacation spots guests want to return to consistently, whether for one weekend a month, a month out of their year, or the entire ski season.
However hotel residents choose to approach their property and second home schedule, there is typically some amount of time when their residence is empty. How your investment is cared for while you aren’t present is another big selling point of a residential hotel.
“As a true lifestyle investment, residents have the peace of mind that while away from their home, all is being looked after from property management, with a focus on asset preservation, to fully managing their residence if they elect to participate in the rental management program,” says Necrason.
For residents who opt to have their property included in a rental management program, which is offered through most residential hotel experiences, they have an opportunity to recoup costs by leasing the property back to the hotel. “The program provides flexibility and the opportunity to enhance the associated value of owning their residence and benefits associated with it,” says Necrason. “When our homeowners aren’t with us on property, they can also rest assured that their assets are managed and taken care of with great care.”
Why It’s Appealing to Buyers Right Now
As we continuously report on the changing needs of luxury buyers in the era of COVID-19, one thing is clear: residential hotels check a lot of boxes in 2020. Recently, we heard from Ophir Sternberg, founder and CEO of Lionheart Capital, the developers responsible for The Ritz-Carlton Residences, Miami Beach, who reported that buyers were intrigued, especially amid the pandemic, to have everything they need without leaving the property. At residences like The Ritz-Carlton Residences, Miami Beach, buyers can even buy office space in the building, for example.
Necrason says they’ve actually had a lot of their buyers hunker down at their Montage Residences through the pandemic. “Despite altered services and factors that impacted our resorts, our owners provided the ultimate for us, [our residents] entrusted themselves to our staff to take the best care of them possible and provide the respite they were seeking to keep their family safe,” explains Necrason. “We are humbled by this and have found this experience for our staff and our owners as well to be extraordinarily fulfilling in ways we had never expected.”
Above all, she sees the service aspect of residential hotels as the “key selling factor, now more than ever before.” Buyers are after a second home experience that can facilitate a domestic vacation that feels safe for the entire family.
As Necrason says, “People are recognizing that enjoying having not only a nice place to retreat to is important, but the safety and security of their family is equally as motivating. [Their buying decisions have] a greater emphasis now on family, connection, and simplifying life to focus on things that matter most.”