The New Paradigm: Fractional Resorts - A Luxury Lifestyle, Not a Hotel Room
By Tom LaTour Principal, LaTour Signature Group | November 08, 2008
Vacation home ownership is not a new concept in the hotel development world. For decades, time-shares and second residences built in desirable resort communities and quickly absorbed by wealthy buyers have resoundingly demonstrated that people want more than just a hotel room when they vacation in these primo destinations.
Few experts in the hospitality industry would have predicted it earlier this year, but after a brief lull the market for luxury fractional resorts is starting to heat up again.
This is not to say that consumer demand or development volume has come roaring back to the levels once projected for the product, but rather that the investor community has focused on this segment as being one of the most promising opportunities for the decade ahead.
Many reasons have been offered by various industry leaders as to why fractional resorts are garnering so much attention, but chief among these is the fact that few new for-sale luxury resort products are being initiated, while demand among affluent consumers for an innovative vacation real estate model has been steadily increasing.
In the past five years, the fractional ownership buzz has been amplified within the luxury space -- and throughout popular culture as well (nee Hard Rock "condotels"). The result of this attention? Resort owners and developers around the world are tapping into the fractional ownership trend.
By all indications, there's a paradigm shift occurring away from hotel rooms and more toward luxury vacation lifestyle experiences. Consequently, these new ultra-luxe fractional resorts are catching the eye of developers and investors alike who want to be well positioned when the economy regains its strong footing and luxury consumers start flexing their buying power again.