Recommendation on the preferred structure of the community

Reference no: EM132972670

In Recreational Amenities - Module 5, we learn that amenities are features that are attractive/appealing to a given market and add value to the land. Amenities can take a variety of forms in a Resort, i.e., golf course, tennis courts, water feature (swimming pool, lazy river, water play area, etc.), spa, marina, etc.. The upfront costs of these amenities can be recouped through the value that they add in terms of higher occupancies, higher ADRs (average daily rates), ad/or differentiation (or competitiveness) within the market that draws individuals and groups to your property. As we learn in the module, the key for a profitable resort/business is to find the right balance between the cost of providing the amenity and the profitable revenue that it generates. When the amenity is no longer profitable, ownership and management of that amenity can be transferred to an appropriate group or body.

Presume that the resort where you are working is a mixed use resort (a combination of permanent (timeshare, condominium, whole ownership (homes)) and transient (hotel and/or short or long term rental) guests). In addition to the 500 room hotel, there are 64 condominium units and 48 whole ownership (homes) units. The resort's residential units are 100% sold out. All of the hotel guests, as well as the condominium and whole ownership residents have access to the resort amenities - paying a fee each time they use them.

The resort sits on a beautiful 18 hole Arnold Palmer designed PGA championship course. The course hosts one of the PGA FedEx Cup Championship tournaments annually and has done so for more than 20 years. Within the last four years, the course's carrying costs have become too great for the Resort to continue to absorb as they are adversely effecting the overall profitability of the resort. Therefore, it is time for an orderly transfer of the amenity.

Fortunately, the developer of the mixed use resort had his lawyers write the legal documents in an ultimately flexible way that would allow the developer to choose the Community Management Structure of the golf course, should the orderly transfer opportunity be executed. However, there MUST BE a Community Management structure - the condominium and whole ownership residents purchased their residences with this promise in writing -- if the resort amenities were to be transferred, they would be transferred to the Community, rather than a governmental body or non-profit tax exempt organization.

Considering the information provided in Chapter 8 of the text (particularly pages 218 - 225; as well as the information provided in the Quick Getaway 8.4 on page 226), make a recommendation on the preferred structure of the Community Association so the 18-hole golf course can be transferred to the resort community AND why this is beneficial to the developer, the resort hotel business, and the residents (condominium and whole ownership owners). Your recommendation should include

Reference no: EM132972670

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