What do esteemed luxury brands such as Four Seasons, Ritz Carlton, Hyatt and St. Regis all have in common? All are players in the global surge in fractional ownership, and it's a trend that is growing in the worldwide property market.
Upscale brands are increasingly becoming commodities and their quest to gain further market penetration they are seeking out niche products to grow the brand and the core operating business.
From a historical perspective, fractional ownership is an offshoot of the timeshare industry, coupling its ambition to attract a lucrative higher-end targeted customer base together with more a traditional real estate investment vehicle.
Typically fraction * sold on usage rights for owners from two weeks per year (1/25*) up to 13 weeks (1/4*). Ownership structures vary but in many cases, as legally allowed, buyers are able to secure a deed and an undivided interest in the property similar to a strata title. In the case of a 1/4th fraction this would be a 25% ownership.
When comparing timeshare to fractional ownership it's more of a real estate investment than a lifestyle purchase. Unlike timeshare which is more focused on the mass market, fractions are aimed at rich individuals and prices for the shares are often in the range of 3.32 million to 33.2 million baht (US$ 100,000 to US $ 1,000,000) or more.
Upper tier brands are required to service both the owner's personalised service needs and to drive sales based on brand recognition and appeal. The more recognised the brand the greater the premium that can be charged, with pricing differentials often in the range of 30 – 50 % above non-branded projects.
The ability for owners to schedule usage time is of primary importance to the buyers. In general terms, schemes range from rotating calendars throughout the year to a set calendar or fixed weeks and in many instances a lottery or rotating calendar plan wherein owners can register interest in multiple periods which may fit their individual schedules.
Another common system once owners have all registered their interest for a year in
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