The wealthy are increasingly ditching vacation homes for lavish resorts
These guests can be lucrative for the resorts too
Wealthy jet-setters are increasingly trading vacation homes for pricey resort stays.
In the winter version of “summering” abroad, luxury travelers, especially among retirees, are opting for long-term stays are resorts instead of being tied down to one property, Bloomberg reported. The setup offers an array for perks for guests — and can also be a big moneymaker for hotels with nightly rates start at $200 and can rise to $700.
For example, Upper East Siders Adelle and Robert Rathe spent about about 90 consecutive nights at Belmond La Samanna, a luxury resort on St. Martin. Based on the hotel’s starting rate of $545 per night — the couple had a five-figure tab not including food, drinks or activities. Perks at these kinds of resorts can include free daily housekeeping and a full staff to call on.
“Those who choose luxury resorts over real estate purchases such as a condo or home do so not only for the five-star pampering and attentive service, but also the flexibility of choice,” Tara Hyland, a Virtuoso-affiliated travel adviser, told Bloomberg. “Of course, spas, yoga classes, fitness programs, water sports, golf, tennis, and restaurants make resorts even more attractive.”
Snowbirds also give resorts a leg up for forecasting revenue, the report said. Longer stays make it easier to predict spending habits and increase the likelihood that guests will spend on more services. Seasonal guests are also a good source of referrals for these properties.
On the other hand, costs for vacation homes can add up quickly. Owners can end up spending huge sums on down payments, renovations, insurance in hurricane-prone areas and other costs.
“There’s no way it makes sense to own an apartment unless you’re spending a significant amount of time there,” said Miami-based Merrill Lynch financial advisor Patrick Dwyer about South Florida. “But even then, you’re still losing. The myth that you’re going to make money on your property is just that. Interest rates are going up, which makes the opportunity for your capital investment in real estate more challenging. Being able to go from resort A to resort B is better than locking into a fixed cost as you get older.” [Bloomberg] — Meenal Vamburkar