'Horizontal Hotel' Concept Coming to Central Florida

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Orlando, with over 59 million visitors annually, has always been an innovator in providing vacation accommodations. The leading hospitality groups all have substantial vacation ownership and timeshare projects featuring luxury two, three and four bedroom apartments in the market.
 
But a new concept called "Horizontal Hotels" is about to change things soon with a new vacation-resort project called Providence.
 
In 2012, a large European hospitality company entered the Orlando market with its vacation town home concept and built and sold approximately 400 townhomes and sold them to individual investors. The demand for these townhomes as rentals is very high with over an 85% occupancy and very high average daily room rates.
 
There are approximately 15,000 single family homes that are available for vacation rentals which are very appealing to large family groups and families who travel and vacation together. The major tour operators are happy to promote and rent these units. The majority of these homes are 4-5 Bedrooms and have a pool designed for family use and are more affordable as an alternative to hotel rooms. (At the high end they have 10 plus bedrooms and include cinemas and indoor golf simulators.)  Nearly all the single family homes are scattered through the many luxury gated communities, a number with golf courses and water parks that dominate Polk, Orange and Osceola counties.   
 
In order to rent these single family homes, all with pools, the major tour operators sub-contract with the local management companies who are responsible for cleaning and maintaining the properties for their individual owners. This means that the management companies have to supervise properties scatted through over 40 vacation home communities, with different floor plans and furnishings etc. This is not an easy task and tends to be inefficient and time consuming. With the recent economic downturn there has been very little new building and the rental homes are, on average, over seven years old and in need of refurbishing and updating.
 
Don Wherrett, the senior partner of the Contempo Group of Companies, has over 50 years' experience in the travel and hospitality industry and his group has an exclusive, long term contract with a major tour operator to provide over 400 single family vacation homes every week. Mr. Wherrett and his partners came up with the very innovative concept of building a "Horizontal Hotel" where the single family homes would be built together in a cluster of approximately 60 units per village, and designed and furnished to the exact specifications of the tour operator who will be renting them. Contempo can also offer a 5 year guaranteed rental program to the individual buyers, if they choose to participate in the program, as these new units are in high demand.
 
Contempo then approached Park Square Homes, one of Central Florida's most innovative developer and builder of upscale vacation and residential home communities, who agreed to build the "Horizontal Hotel" community that Contempo would be managing. Park Square tapped Midlan International Resort Realty to assist in the sales and marketing of the project to individual owners who would be interested in participating in the program. Sales will begin on site in July 2014. It is anticipated there will be many overseas buyers from Canada, Europe and Latin America. Occupancy will begin in the summer of 2015.
 
Michael Butler, CEO of Midlan International tells World Property Journal, "This is a natural evolution. Families began by staying in hotel rooms, then progressed to condo apartments and town homes, and now they desire large single family vacation homes with pools and game rooms. The history in Orlando has been that individual investors would "Buy to Let" these vacation homes and hire a management company to rent and maintain them. Now the major tour operators are specifying new construction with specific design features to appeal to their clients. In this case, the British tour operator specifies kettles, tea pots and tea cups and service, and British sports programming for TV systems. Such upgrades allow for a higher occupancy rate, higher ADR, higher consumer satisfaction, good "word of mouth", higher repeat business, etc, etc. The investors are happy as these factors lead to a higher return on their "buy to let" investment, yet there is the flexibility of using or selling the vacation home property at their discretion. We anticipate the tour operators will seek to construct more vacation villages at other locations with a high family demand".
 
Butler concluded, "As families continue to travel together and rent single family vacation homes this Horizontal-Hotel concept will be the beginning of a new hospitality product."