What Is a Condo Hotel (Condotel)?

A condo hotel is a hotel whose rooms are owned separately as condominium units and enter the hotel's inventory through a rental program (Miller Nash on how condo hotels work and their challenges).

Last updated: November 2026

How a condo hotel works

A rental program can take the form of a rental pool. The developer or a third party rents each unit while the owner is not using it, combines the rents and expenses of all units in the pool, and pays each owner a ratable share whether or not that owner's unit was actually rented (Securities Act Release No. 5347).

Saddlebrook Resort in Wesley Chapel, Florida, shows the model in a public filing. At December 31, 2020, 508 of its 556 condominium units were in the rental pool, about 91%. The resort keeps 45% of Net Rental Income as operator, and the remaining 55%, after adjustments for complimentary room revenue, funds owner distributions and a maintenance escrow fund (Saddlebrook Resorts, Inc., Form 10-K for FY2020).

Splits vary from property to property. In the early days of condo hotel development, room rental revenue was often simply split between owners and the operator, usually around 50/50 and ranging from 40/60 to 60/40. By 2006, a hotel lawyer described these simple splits as a guess at expenses that no longer worked (Global Hospitality Advisor: Condo Hotel Splits). Saddlebrook's 45% is a share of Net Rental Income, so it does not compare directly with a split of gross room revenue.

Why condo hotels matter for hotel distribution

A condo hotel operator works with a room count it cannot fully fix in advance. Under the SEC's 1973 guidance, a sale that requires buyers to make their units available for rent is a securities offering. To stay clear of securities registration, a developer cannot force buyers into the rental program, so it cannot know how many rooms will end up in the hotel's inventory (Miller Nash on how condo hotels work and their challenges) (Securities Act Release No. 5347).

Owner use is the second variable. At Saddlebrook, the units not in the pool sit in a non-pooling rental program or are owner-occupied (Saddlebrook Resorts, Inc., Form 10-K for FY2020). A Florida condo hotel operator, Provident Hotels & Resorts, said in 2008 that many condo hotel rental programs restrict when owners may use their own units (Top Five Misconceptions of the Condominium Hotel Industry). An owner may also, after buying, sign a non-pooled rental arrangement with an agent that was not a condition of the purchase.

Put together, the number of units a condo hotel can sell depends on choices owners make: whether they join the rental program, when they stay in their own units, and whether they rent through another agent.

Condo hotel compared with hotel, timeshare and vacation rental

Hawaii's official count of visitor accommodation lists condo hotel as its own unit type, separate from hotel, timeshare and vacation rental unit (2024 Visitor Plant Inventory).

 Condo hotelVacation rental unit
Hawaii units, 201410,5607,162
Hawaii units, 20247,97017,531

Over those ten years, Hawaii's condo hotel units fell by about a quarter while its vacation rental units more than doubled (2024 Visitor Plant Inventory). The state counted 83,058 visitor units in 2024, so condo hotels made up about 9.6% of the total, and Oahu (3,835) and Maui (2,882) held the most condo hotel units (2024 Visitor Plant Inventory).

Aparthotels and serviced apartments, which are run as apartment-style lodging, each have their own glossary page.

Frequently asked questions

What is a condotel?
Condotel is another name for a condo hotel: a hotel whose rooms are owned as separate condominium units by individual buyers. Each owner decides whether to place the unit in the hotel's rental program, such as a rental pool run by the operator, which is how units enter the hotel's inventory.
What is a hotel condo?
A hotel condo is a single condominium unit inside a condo hotel, owned by an individual buyer. Owners share many areas with each other and with hotel guests, and the owners' association has to follow the maintenance and decor standards set by the operator. Ownership carries costs either way: at Saddlebrook Resort in Florida, owners pay association assessments whether or not their unit is in a rental program.
Do condo hotel owners have to put their unit in the rental program?
In a standard US offering, no. Under the SEC's 1973 guidance, an offering becomes a securities offering if it markets the economic benefits of the promoter's rental efforts, offers a rental pool, or requires owners to keep units available for rent or use an exclusive rental agent. Since Rule 506(c) took effect in September 2013, a mandatory program is possible in an unregistered offering, but only if every buyer is a verified accredited investor.
How are condo hotel owners paid from a rental pool?
Owners are paid from the pool as a whole rather than from the rent on their own unit, and each program sets its own formula. At Saddlebrook Resort in Florida, owners divide their part of Net Rental Income by a participation factor based on the value of the furnished unit and the number of days it was available to the pool.

Related terms

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Where Jetstream fits

In a condo hotel, many owners' units are sold as one hotel, so the rates and availability on each channel have to follow every unit that is in the program on a given night. Jetstream builds an AI channel manager that keeps a property's rooms, rates and availability accurate on every channel it sells through, managed from one place.

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