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The tipping points

Spring 2012 marks a signifi cant tipping point in the fractional leisure home industry. Despite continuing uncertainty in the Eurozone and more than enough negative fi nancial reports in most mainstream media, recent news in the fractional trade press suggests that better days are in the offi ng. OPP’s expert fractional correspondent David Disick looks through the statistics to provide us all with a bit of hope.


recent Fractional Trade article by editor George Sell is headlined, “Ragatz report indicates light at the end of the tunnel.” Ragatz and Associates compiles an annual state-of-the-industry report on active, new fractional development projects in the US, Canada, Caribbean and Mexico.

According to Sell, an expert journalist in the fractional industry, the report cites increases of four per cent in number of fractional sales and in sales volume for 2011 over results in 2010. The numbers are: a) In 2011, approximately 1,925 fractions were sold versus 1,850 fractions in 2010. b) In 2011, sales volumes totaled approximately $552 million versus $530 million in 2010.

This fairly modest four percent increase should not necessarily lead to us all dancing in the streets. However, deeper analysis shows that average prices of fractional interests rose, but average prices of PRC’s (defi ned as properties selling at $10,000+ per square foot) declined as follows: a) Average price for fractional interests increased in 2011 to $131,000, up from $120,000 in 2010. b) Average price for PRCs decreased

in 2011 to $254,000, down from $271,000 in 2010.

Nevertheless, the approximately four per cent overall rise is a positive sign: It is the fi rst increase in total sales volume since the US fractional market peaked in 2007.

In that platinum year ... so long, long ago ... total sales volumes reached a

stratospheric $2.3 billion. It brings to mind the quote “Mais ou sont les neiges d’antan?” … “Where are the snows of yesteryear?” from Francois Villon, the fi fteenth century French poet. Last year’s statistics constitute just a part of the dynamic picture of the fractional industry today. For a more nuanced and current view, it is useful to take a look at what various leaders on the cutting edge of the industry are doing. Their actions will affect the sector in both the near- and long-term. For instance, a signifi cant number of the delegates who fl ocked to London for Fractional Summit Europe 2012 were new to the fractional industry. The introductory Fractional 101 sessions were packed the entire day with delegates eager to learn the basics. And, despite considerable

David Disick is president of The Fractional which helps developers in the U.S. and abroad secure fractional fi nancing

travel time and expenses, highly motivated delegates came from as far afi eld as Cyprus, France, Italy, Ireland, Lithuania, Malta, The Netherlands, Portugal, Russia, Spain, and Switzerland; The Bahamas, Barbados and St. Lucia; the US; the Philippines; Qatar; and the UK. George Sell noted that several attendees were timeshare developers “who are moving into fractionals in a big way.” He observed, “This is a trend with undeniable momentum which will have a major impact on the European market over the next few years.” For me, such widespread

international interest is a good omen for the future as is the entry of “new blood” into the industry. The growth of the industry offers further testimony to the worldwide appeal of the fractional ownership concept.

At the 2012 Summit, Piers Brown, founder of Fractional Life, presented the Award for Service to the Industry to The Registry Collection. And the judges’ comments were: “Much more than simply an exchange programme, The Registry Collection is to be applauded for its efforts to grow the fractional marketplace through developer education.” From my point of view, during much of 2011, The Registry Collection conducted a series of “roadshows” throughout Europe which played an important role in helping to educate developers on the opportunities in fractional ownership.

Ice-breaker | Disick has had a year of discussions with a visionary Russian businessman who wants fractional ownership there

The Registry Collection is among the world’s leading luxury fractional

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