STRUCTURE / SET-UP                                                          
From an administrative point of view, the condominium/residence hotel is run quite differently from a standard hotel project. Due to the diverse ownership and titles involved, the condominium project is divided into two completely separate legal and financial entities.

Condominium Corporation
First, the Condominium Corporation is a legal corporation comprised of the owners of all condominium apartments within a given building. During each year of operation, the Board of Directors coordinates with the Operator on all policies and procedures and monitors the financial performance of the corporation. The Condominium Corporation is a non-profit entity with all revenues derived from the owners’ association dues and rental income. Expenses involve employee payroll, maintenance and materials, contracted services, utilities and facilities up-grades and repairs of all the property’s common areas.

Rental Pool
The second legal and financial entity is the hotel or rental pool operation. Only the actual apartment owners that have signed management agreements with Hospitality International, Inc. participate in the revenues and expenses of the condominium hotel operation. All revenues are derived from the rental of apartments and other income associated with the rental operation such as telephone income, room service commissions, mini-bar service, currency exchange and others.

All expenses are limited to those directly involved with the condominium hotel operation. Operation services include the front desk, PABX, bell service, sales and marketing, in-room maintenance, accounting, housekeeping and administration. The extent of services, and therefore revenues and expenses, can change based upon customer demand, the size and amenities of the property and the local competition within the neighborhood.
Both the condominium corporation and hotel rental operation have separate bank accounts and separate sets of accounting records, with no co-mingling of funds allowed by standard accounting procedures and law.                                                                                
                                                                                                                 next>