Shared-Holiday Ownership Shared-holiday ownership is a category of leisure-orientated, real estate products that enable multiple owners, or rights-of-use holders, to share long-term usage of an individual villa, apartment or collection of units/properties. • Shared-holiday ownership is typically understood to encompass holiday ownership (timeshare), fractional and private residence clubs. • Buy-to-Use and Let properties are also considered to be shared-holiday ownership products. • Offerings are typically leisure-orientated, often with strong recreational and lifestyle components, offering a variety and authenticity of experience. • Shared-holiday ownership is often a component of a mixed-use project development, including hotel and wholly-owned residential real estate. • While the industry has a great deal in common with other forms of real estate development, it is first and foremost a holiday product for most consumers and should not be sold as a financial investment, but as an investment in a set period of holidays and a leisure lifestyle. • The exchange component, allowing owners to exchange into properties of commensurate quality across the world, using a holiday exchange services provider, such as RCI and The Registry Collection®, is a valued and persuasive benefit for prospective shared-ownership purchasers. • Management services capabilities and hospitality solutions are integral components of successful shared-holiday ownership products. • Shared-holiday ownership can generally be categorised into two main forms: Deeded or Right-to-Use.
• Shared-equity ownerships in leisure real estate are known as fractional ownerships. Typically high-value properties in AAA locations, fractional properties have an entry price point of around £250,000 and are sold in longer use intervals of up to 12 weeks. These properties tend to follow the values of other unique properties in the neighbourhood and, at the end of the contractual period of ownership, if the property is then sold, the owners may well benefit from a return on equity if the property has increased in value over the ownership period. • Loyalty Club business models are, as the name suggests, based on a fee payable to join a club which gives its members access to accommodations, spas, golf, ski and a host of other leisure lifestyle amenities and exclusive club benefits. Club models often use a tiered membership structure so that lower fee-payers can access the introductory products, designed to give new members a taste of the brand experience, building their loyalty and trust with that brand, and affording the developer many different opportunities to up sell to higher membership levels. Up selling and selling more brand products to existing members significantly lowers the marketing costs. • Shared-holiday ownership models are generally known as timeshare or fractional properties, while a hotel or leisure real estate/rental properties operating a timeshare or fractional arm are known as mixed-use developments.
Leisure Real Estate Trends & Opportunities, 2017