Feature: The Fractional Market
January 1, 2004
“It’s a pretty
fantastic creation, especially for a family with kids, because when you travel
you always need more than one room,” says Manley, who paid a membership deposit
(Exclusive Resorts’ membership ranges from $200,000 to $325,000, which is 80
percent refundable upon termination) and annual dues of $16,000 to become one of
only 200 members. “If you are upper middle class, you are accustomed to paying
$2,000 for the right hotel accommodations, and then you’re treated like every
other guest.” Exclusive Resorts was different from the start, he says. “They
didn’t just mail us the keys and say this is what you do with them when you’re
done. The homes include staff and every amenity. You get all the benefits of
second- and third-home ownership without the hassle and the expense.”
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Private Retreats partnered with Abercrombie & Kent to offer members the choice of villas (Villa del Sol, Cabo, below), jets or yachts. (Click image to enlarge)Exclusive Resorts is one of a handful of residence clubs set up by private
investors and luxury hotel chains over the last decade to help affluent
vacationers eliminate some of the burdens and limitations of second-home
ownership. A by-product of the time-share concept, in that members share homes
for a given amount of time, the idea has been vastly elevated in terms of
benefits, services and even the amenities found in the homes
themselves—everything from big-screen plasma televisions and extensive DVD and
video game libraries to private pools—to make membership much more compelling to
the well-heeled traveler. ; function voidFunc() { } voidFunc();)
Although the perks and privileges vary depending
on the club, buyers essentially have two options. The first is to spend anywhere
from $84,500 to $635,000 plus annual dues to purchase a wholly owned or fractional-deeded property with a luxury
hotel brand such as the Ritz-Carlton, Four Seasons or Marriott. For their
investment, owners are given more than double the staytime of a typical
time-share, with the added bonus of accruing tax and equity benefits and, in
some cases, even rental income from second-home ownership. And, at least in
theory, owners have the right to will or sell their deed at any time. As hotel
residents, they are also entitled to use all of the amenities—spa treatments,
24-hour concierge, valet and maid services, even a private wine cellar—found at
a five-star resort. (Click image to enlarge)
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