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Sol Meliá kicks off construction of its Vacation Club’s $15 million 1st phase

Plans for the Vacation Club next to Paradisus Puerto Rico Resort in Río Grande to include residential vacation club villas & condo-hotel units


23 May 2005
Copyright © 2005. All rights reserved.

Sol Meliá, the world’s largest hotel resort operator, recently began construction of the first of three phases of its vacation club project adjacent to Paradisus Puerto Rico Resort in Río Grande, three ocean-front apartment buildings for an initial investment of $15 million.

The apartment buildings will consist of a total of 27 units, with each floor an estimated 3,000 square feet, said Alain J.A. Grangé, Sol Meliá Vacation Club (SMVC) president & chief executive officer. The vacation club project is to be comprised of apartment units, residential villas, and a condo-hotel. The SMVC project will include Paradisus Puerto Rico Resort services, amenities, and access to its facilities. The units are available for preconstruction purchase.

Grangé said Sol Meliá regards SMVC as a new and important strategic initiative in long-term vacation interests that is set to become one of the company’s fastest growing businesses in the coming years. "The SMVC network either purchases the land adjacent to the resort or simply builds on already purchased land to maximize its value, offer customers the opportunity to purchase long-term vacation interests in existing Sol Meliá destinations around the world, and uses the chain’s resorts," he explained.

"Sol Meliá decided to maximize the [Paradisus Puerto Rico] resort by creating an SMVC real-estate division," Grangé said. The total investment in the local three-phase project is estimated at $150 million, not including the sum invested in the resort. Similar vacation club units exist in Sol Meliá resorts in Cancun, Puerto Vallarta, and Cozumel in Mexico; Punta Cana in the Dominican Republic; and the Panama Canal in Panama.

Expansion plans are expected to include condo-hotel units, the latest real-estate trend worldwide and popular in many vacation destinations. This concept sells buyers the "right to use" a vacation unit for a number of years. When the owner stays in the unit, the hotel charges daily fees during the stay, and during the rest of the year the owner receives payments from the hotel when others use the unit. Condo-hotel units tend to be more expensive than regular condominium apartments; mortgages could be slightly higher; the owner has no say about the decorating; and is required to pay a yearly maintenance fee.

The target market for the local SMVC units are "firstly, local residents and Puerto Ricans living elsewhere, as an offer to access vacation opportunities without the inconvenience of ownership per se." Grangé said. "We are positioning the product as a vacation opportunity for Puerto Ricans outside their main home [either on the island or elsewhere], which capitalizes on their ability to travel, as well as the desire of people from around the world to come and visit the island," he added.

"Our target also is the U.S. [mainland] population as a unique opportunity for this market and culture, plus it is within the U.S., which gives U.S. citizens wanting to purchase vacation real estate an added security unavailable on other islands such as Jamaica and the Dominican Republic," Grangé explained.

Prices for the "right to use" a vacation interval unit for a 50-year period range between $20,000 and $80,000, based on availability, location, and season. Buyers become SMVC network members, with access to resort amenities, such as a pool, spa, tennis courts, casino, and preferred all-inclusive rates. Other services include Budget and Avis car rentals, flexible reservation windows, and travel benefits–on Continental Airlines, Delta, American Airlines, Iberia, Mexicana, and U.S. Airways and cruise lines such as Carnival, Celebrity Cruises, and Royal Caribbean.

"With more than 17,000 members worldwide, SMVC’s demographics is about 50% from the U.S. mainland, 5% from Canada, 5% from Mexico, 30% European, and the remaining 10% are other nationalities," Grangé said.

"People with second homes use it an average of 16 days a year, which makes the SMVC an ideal opportunity. After a one-time payment for the ‘right to use’ the unit or combined units for a 50-year span, Sol Meliá members will only have to pay yearly maintenance fees, which start at about $500 per year, per unit," said Grangé. He added, people who acquire the villas can rent their "right to use," lend it to family and friends, exchange its use for the use of other Sol Meliá locations, sell it, or even will it to heirs.

SMVC members have access to the Sol Meliá network of 350 hotels in 30 countries, which include TRYP Hotels, Sol Hotels, and Paradisus Resorts.

The SMVC Puerto Rico apartment buildings consist of four villas. Some units are one-bedroom suites with a queen or king-size bed or two double beds, living-room area, one sofa bed, kitchenette, and one full bathroom, providing for a maximum occupancy of four people. The two-bedroom lock-off units have a master bedroom and one large bedroom, for a maximum occupancy of eight people. The three-bedroom lock-off consists of a master bedroom and two bedrooms, for a maximum occupancy of 12 people.

Sol Meliá S.A. is the leading hotel company in Spain, Latin America, and the Caribbean; the third-largest hotel company in Europe; and No. 10 in the world. It also is the largest resort hotel chain in the world. The company provides more than 350 hotels in 30 countries on four continents. Its hotel brands include Meliá (luxury hotels; includes sister brands Gran Meliá and Meliá Boutique), Sol (for tourists and families), Paradisus ("all-inclusive" resorts), and TRYP (for business travelers).

The company’s partnership with the Rank Group has allowed Sol Meliá to add Hard Rock hotels in the Americas and Europe–the first opened in Chicago in 2003. The family of founder & chairman Gabriel Escarrer Juliá owns about 61% of the company.

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