A Piece of the Vacation Real Estate Pie: Top 3 Take-Aways from Fractional Summit 2010

Fractional Summit 2010 recently wrapped its annual delegation of the biggest and brightest stars in the international fractional industry. What were the key take-aways from the event?

1. Fractionals are resilient in the current market. We’ve been saying it all along. Fractionals, or shared ownership opportunities (as we prefer to call them), are “the smart buy” when it comes to purchasing luxury vacation properties in today’s real estate climate. Rather than hassling with the headaches of typical home ownership, the affluent can own a piece of the ocean, a slice of the good life in wine country, or a share of the mountain. It’s due to the fact that “fractionals have win-win appeal as both a lifestyle buy and an investment"; while Piers Brown, founder of the UK’s Fractional Life, noted: “Despite the economic slowdown, there are green shoots starting to appear and a week doesn’t seem to pass without Fractional Life featuring news of a fractional real estate launch somewhere in the world.” Where Piers sees green shoots, we see the glimmer of élan… but we both agree that the future looks bright.

2. Fractionals have high levels of consumer satisfaction. The delegation also found that fractional owners in a variety of price points are happy with their investment. It’s easy to see why. When you look at the offerings at fractional private residence clubs such as The Élan Collection, owner-members will have more than their fair share of benefits (forgive the pun): luxury amenities, services, affordability, flexibility, reduced running costs, stress-free management and the potential for capital appreciation.

3. Fractionals are a natural upgrade from a timeshare. Fractionals often get compared to timeshares, but they exist in a league all their own, says Stan Tonkin, Vice President of International Marketing and Sales for The Élan Collection. “Shared ownership private residence clubs like The Élan Collection offer a rare opportunity to own a luxury vacation residence for a fraction of the price,” he said. “It’s vacation home ownership at its best.” According to the delegation, shared ownership "is a viable solution to second home ownership as it fills the gap between timeshare and whole ownership. As Bryan Lunt, Chairman of the Absolute World Group of Companies, commented during Fractional Summit, “Fractionals have lower management fees, more benefits and feel like more of an asset.”

What do you think of the Fractional Summit panel’s findings? Are you seeing more enthusiasm for shared opportunities verses whole ownership opportunities? Are affluent clients embracing the fractional concept in your market?