The Monumental Movieland Hotel on North International Drive will be rebuilt as the 35-story Parkview Resort next year if city officials approve, and will offer a five-star experience to timeshare owners at a lower price than Orlando's ever seen, a lead executive with the New York-based owner told GrowthSpotter.
Northern Star Realty NY, which bought the property in 2006 at $12 million, has slowly refined remodeling plans for a semi-luxury timeshare hotel on the site since 2012, following efforts in years prior that were snuffed out by the recession.
Vice President Howard Cheng said his family was spurred to act on development plans earlier this year after seeing Orlando's record-setting 62 million visitors in 2014.
"It just blew my mind at the time that Orlando knocked off New York City by so much in tourist figures last year, almost 10 million more visited Orlando than NYC," he said. "Orlando has so many exciting projects coming up. We think the demand will only continue to grow, especially if Chinese investment (in the U.S.) is allowed to open up more."
But conversion of Monumental Movieland comes first. Located at 6233 International Dr., it lies directly across the street from Wet 'n Wild Orlando, 0.7 miles from Universal Orlando, and currently offers 261 rooms on four floors with a 9,968-square-foot Black Angus restaurant. Average Daily Rate (ADR) at the budget hotel is currently $49 for mid-August.
As reported by The Orlando Sentinel on July 2 when a new master plan application for the property was made public, Parkview Resort will be a 35-story hotel with 809 hotel rooms (548 more than the existing hotel), two restaurants, five levels of structured parking and a 500-seat banquet hall. That plan faces a hearing before the Municipal Planning Board on Aug. 18.
Despite redevelopment of North I-Drive that includes the luxury iSquare Mall + Hotel, a boutique hotel planned for Skyplex entertainment complex and renovations at other properties, Cheng sees his primary competition in the immediate area as budget properties charging $100 or less.
That puts Parkview Resort in the tough position of delivering a semi-luxury experience at an accessible price point.
Cheng's family researched the fractional ownership model in recent years, and concluded that timeshare developers and managers were charging exorbitant entry fees and annual fees that far exceeded daily maintenance costs.
"For union-run hotels we have in Manhattan, our average daily maintenance cost for a room is well under $100, where costs far outweigh those of Orlando," he said. "We've run our (Parkview) operating cost projections through four analysis firms and all checked out, so I can't understand why other timeshare companies are charging so much."
Parkview's system will be similar to the standard timeshare structure. Their projected upfront investment of $3,000 to $5,000 to acquire a deed for a certain number of days per year is lower than most timeshare products in Orlando, though investors with Parkview will likely be limited to stays at this property.
Annual maintenance fees will also be paid for those days, but Parkview's fee will be around $70 per day, based on Cheng's current estimates. It's the only cost an owner will pay to reserve their dates.
"If it costs us $70 to maintain a room each day and that is coming in from owners, we are on our way to 100 percent occupancy for that room," Cheng said. "Hotel-wide you typically need 70 percent occupancy to profit, but the more fractional interests we sell, the closer we are to 100 percent occupancy for each key. As we approach full occupancy, we reduce operational costs per key, hotel management has its cost and profit covered, and management works directly for (individual) owners."
Parkview won't have a vacation club structure, won't charge usage fees to book, and will rent out nights for owners on their behalf if they can't use them during the year.
The result, as currently proposed, would be $70 nights for owners in a one-bedroom suite with jacuzzis and other five-star amenities, while non-owner guests pay in the $220 to $250 range. Owners would profit if they let the hotel rent out their allotment of nights, based on expected ADR.
Cheng declined to estimate a construction budget for Parkview Resort, saying his firm is still working to reduce costs and line up investors to make individual cost of ownership as low as possible. The project will likely source 40 percent or more of its funding from Chinese EB-5 investors.
Show-Lain C. Cheng, founder and CEO of NSRNY, was in China last week speaking to EB-5 investment advisers. Fundraising may take six to 12 months on the EB-5 end, said Howard Cheng, who estimates groundbreaking could start in August 2016 if financing lines up at the pace he expects.
Monumental Movieland Hotel would be demolished on the property at some point in 2016 before construction on the new Parkview Resort begins, he added.
Show-Lain C. Cheng immigrated to New York City from Taiwan in the early 1970s and pursued a dream of property development in the 1980s with small residential projects.
Her family firm has since grown into a mid-level commercial developer with six residential properties, three commercial buildings and three hotels, most of which are in New York. Two of the hotels are on Orlando's International Drive, and an inactive commercial site is owned in Kissimmee.
VHB is the engineer and land planner for Parkview Resort. The Cheng family worked on architecture designs for the property in recent years with Baker Barrios, and may favor that firm for future work.