Claude Attala, Northcourse
As global managing director of property consultants Northcourse, Claude Attala has an in-depth understanding of the shared ownership market as well as the intricacies of Middle Eastern real estate development and tourism. His company provides advisory, research and sales and marketing services to developers and investors worldwide, working with both experienced developers and new entrants in resorts, hotels, timeshares, fractionals, condo hotels, private residence clubs and destination clubs. Prior to NorthCourse, Attala served as head of planning and operations at the Qatar Tourism Authority, and has also held senior level sales and marketing roles with Rezidor SAS, Intercontinental Hotels, Meridien Hotels and Resorts and Sheraton.
Attala points to research by the UNWTO which predicts that consumers in 2010 and beyond are increasingly likely to favour domestic and short haul travel over long distance flights. This, he maintains will see most European fractional buyers looking at locations within a four-hour flight time of their permanent home. He also says that the most successful fractional schemes will be the ones in locations beyonf the reach of traditional homebuilders, which make the most of their surroundings in terms of natural beauty, sports and leisure facilities, and urban centres.
Gregg Anderson, the Registry Collection
As managing director of exchange network The Registry Collection, Gregg Anderson provides strategic direction to a team of product managers in eight regional offices, evaluating partner and affiliate opportunities. He also sees himself as an ambassador for the luxury shared vacation ownership sector and is a frequent speaker at industry conferences.
Anderson, who has held positions at Intrawest, ClubCorp The Walt Disney Company says: “I agree with the financial and development experts I’ve spoken with that we will see a gradual recovery in the second half of 2010. Both lenders and buyers will scrutinize opportunities more closely in regards to location of the project, track record of the developer and project team involved with the development. Developers who have 'A’ locations, who have a track record of development success and are aligned with an experienced team of partners will see a great advantage as we come out of this financial downturn. More potential buyers than ever will evaluate deals based on usage versus investment which will put more emphasis on developers delivering a comprehensive amenity package and choosing the right operator who can deliver the exemplary service this affluent traveling demographic demands.”
Philip Bacon, HVS
Madrid-based Philip Bacon has more than 25 years' experience in business advisory services, including a 10-year spell with Price Waterhouse in London and Barcelona, and positions as financial director for two Spanish resort development companies. Now at HVS, he launched the company's Shared Ownership Services for EMEA & Asia division, which specialises in all forms of shared ownership, from fractional interests to branded residences, particularly within hospitality-based mixed resort developments.
Bacon says: “The fractional property business will continue to offer opportunities to both developers and operators who are looking to take advantage of an increasing awareness on the part of the customer of the need to achieve true value for money for high ticket items. We will probably see increased concern over the benefits of speculative real estate investment. So-called 'time poverty' will continue to be part of daily life but the buying public will also be more demanding in terms of credibility and the matching of promises made during the sales process with eventual product and service delivery.”
Robin Barrasford, Barrasford and Bird Worlwide
Robin Barrasford is managing director of agent and developer Barrasford and Bird Worldwide. He was one of the first UK agents to realise the potential of Bulgarian property market and formed his company to bring this emerging market to the UK and educate potential UK purchasers about the opportunities in emerging overseas markets. He is a founder member and board director of the Association of International Property Professionals. Barrasford is a keen proponent of the fractional ownership model, and is currently selling fractions in Greece and the UK, with a French scheme in the pipeline.
“Fractional ownership is a great model but what worries me is that there are a lot of people coming in to the fractional market who are telling developers to add a 50 to 100 per cent premium to their prices. Fractional property has to offer value or they are going to give all of us a bad name, and it will be like the dark days of timeshare all over again. One area I can see really taking off is the up-selling of fractions to existing timeshare owners – that's a very good idea,” he says.
Christian Jensen Broby, Marriott Vacation Club International
Christian Broby is chief customer officer and vice president for Marriott Vacation Club International's activities, covering Europe and Middle East. He has principal responsibility for ensuring the positioning and strategic direction of the business lines across all disciplines and leads development efforts, including project management and analysis for new developments, in these regions.
Broby says: “The perspective for the fractional and residential club sector will mirror 2009 levels…and it isn’t pretty! The buyers’ market remains sluggish, in lieu of prolonged discretionary spending concerns. The ultra-wealthy segment will continue to have the ability to invest in lifestyle-enhancing additions, with even greater purchasing power and advantages, as exaggerated discounts and incentives are extended to maintain some minimal level of sales pace.
While the 'upper aspirationals' are forced to become more selective with discretionary lifestyle spending patterns, developers will be under increased pressure to fund development and commercial activities, as a result of downward pricing pressure extending into 2012. Prolonged steep discounting and erosion in margins will affect the eventual economic viability of projects, resulting in an overall inventory supply side contraction over the longer term. Brand perception and credibility in the market place will become more important than ever, as the developer’s financial solidity will be on the forefront of any buyer’s check list.”
David Burden, Timbers Resorts
David Burden is CEO of Timbers Resorts, a company synonymous with high-end fractional resorts such as Castello di Casole in Tuscany and One Steamboat Place in Colorado. Burden describes Timbers, launched in 1999, as “ground-up developers of some very special resort projects throughout the world – including the design, local approval, construction, sales and marketing, as well as in some cases, the operator of these wonderful properties. We also offer our services in all of those areas of expertise to certain groups and investors for resort projects where we can make a difference and achieve success for the owners.”
Burden predicts: “The residence club and fractional properties trends and opportunities in 2010 will likely follow the settling and shake-up of various markets in 2009 with some well positioned properties starting to experience momentum as the markets in which they reside start to recover. The market is very interested in traditional destinations and may gravitate toward residence club offerings as making more sense than whole ownership. As always though it will first depend on location, finished product and its operation as well as reputation versus just a great deal.”
David Clifton, Interval International and Preferred Residences
With more than 30 years' experience of the shared ownership industry, Clifton has held positions at Hilton Grand Vacations and Welk Park North. Now based in Dubai, he is managing director for Europe, Middle East, Africa and Asia for Interval International,responsible for implementing all business development activities in these regions. These include affiliating resorts with Interval’s and Preferred Residence’s global networks, developing and directing all sales and resort marketing strategies, as well as managing developer/client relationships.
Clifton says: “More consumers, developers, and governments today understand the fundamental concept of fractional ownership, its key benefits to all stakeholders, and the strong value proposition that the industry provides to consumers. Additional developers today are embracing the concept due to the current economic slow down hindering their ability to sell whole units. This has coincided with enhanced consumer awareness of the benefits of fractional ownership – the appeal of second home ownership has diminished greatly over the past several years as real estate costs continue to escalate in prime vacation markets.”
Jerry Cobb, Fractional Ownership Consultancy
After a successful career in the finance industry, Jerry Cobb came into contact with fractional ownership through working with resort in the Western Algarve. He is now CEO of the Fractional Ownership Consultancy, offering specialist advice to developers and consumers.
“I still think the market for fractional is huge,” says Cobb. “Despite the economic downturn, or indeed perhaps as a result of it, ultimately fewer people will want to buy a property abroad outright and would prefer to know that their costs are shared. This year, we will see most of the activity in the lower end, with evidence that people are happier to commit £20 to 25,000 on a fractional purchase rather than any more. There is currently some reticence in dealing with Euros and evidence from our figures shows people are also tending to prefer to buy in their own currency.”
“Fractional in the UK is now taking off. People know what they are dealing with. This market will grow impressively over the next few years and I predict that by 2011 we will see a return of the aspirational lifestyle second house purchaser, and from then onwards, fractional is going to boom.”
Steve Dering, DCP International
Steve Dering is the founding partner of DCP International, which pioneered the world's first residence club – the Deer Valley Club in Utah, which opened in 1992. At DCP, he evaluates potential residence club projects and works with developers to structure, market and sell resort and urban clubs in international destinations.
“More buyers will come into the vacation home market as consumer confidence slowly returns and pricing is adjusted. Fractional ownership will lead the rebound. A vacation home is, once again, a lifestyle purchase rather than an investment, and the inherent logic of fractionals will be magnified by post-recession practicality. Sales at fractional projects already in the market will increase but buyers will be 'deal-driven' and compelling sales incentives and/or discounting will be required. We saw encouraging increases in sales activity at several of our projects during the last quarter of 2009. Most 'new' fractional developments will be conversions of whole ownership condominium projects. However, as was the case prior to the meltdown, the fractional concept will not be strong enough to overcome bad real estate or unrealistic pricing,” says Dering.
David Disick, David M Disick Associates
A former Wall Street attorney, a pioneer of the PRC industry, and a regular author and commentator on the fractional ownership industry, David Disick is CEO of David M Disick Associates, a strategic consultancy involved with fractional real estate. He was responsible for the launch of one of the first ever PRCs, the award-winning Franz Klammer Lodge in Telluride, Colorado, in 1994.
He is currently involved in creating Club Elysée, a multi–site fractionally owned Private Residence Club. The club is looking to sell 144 memberships – nine per property across its sites, which will include locations in the US, the Caribbean and Europe.
In the forthcoming year, Disick predicts the main issues for the fractional industry will be “the enhanced opportunities presented by fractional property; including how to successfully raise financing, and how to market and sell in the current economic and psychological climate. There will also be an increased focus on the top tier of the market.”
Peter Kempf, Peter Kempf International
Peter Kempf is one of the most experienced individuals in the luxury international real estate market. Before founding PKI he served as vice president and Midwest regional director for Sotheby's International Real Estate, director of international real estate for Christie's Great Estates and CEO-Europe for DCP International.
Looking forward he says: “Overall, I am optimistic. Sales in Q3 and Q4 of 2009 improved for high-end projects and I think this will continue on a modest level through Q1 and Q2 of 2010. I think Q3 and Q4 will show even more improvement. Typical institutional lending for developers will continue to be non-existent causing further delay in the launch of new product. However, developers with access to private capital should consider beginning project planning now because by the time they have all their approvals the market will have returned. The demand will improve in Europe because as the concept becomes better known, the acceptance of it improves. Also, the economic collapse caused a change in the way people look at their resources and will now consider fractional, something they never would have done before the crash.”
Bryan Lunt, Absolute World
Bryan Lunt is CEO and chairman of the Absolute Group, which has seven subsidiaries – including Absolute Fractional – and more than 850 employees. His company is pioneering fractional ownership in Asia, and has partnered with brands such as David Lloyd Resorts and yoo.
“It has become apparent to us that in Asia there is huge demand for a product in the middle - not a vacation club membership and not full ownership - our clients were starting to look for half shares or quartershares. The length of fractions has been decreasing and we found that four week shares are now proving popular,” says Lunt.
“Exchange programmes are important to fractional sales – we have six resorts with The Registry Collection and a new one coming soon – we see a great business unleashing naturally due to market demands. We have some extremely wealthy clients who often own several overseas properties, but still find fractional ownership one of their preferred investments and also preferred vacations. I believe there is a massive future throughout Thailand and Asia in general for the sales and marketing of fractional ownership products.”
Lisa Migani, FNTC
Lisa Migani is director of business development in Europe, Middle East and Asia with fractional ownership consultants First National Trustee Company. She has worked for the firm for a decade in Italy where she is based. Before joining FNTC she worked for vacation exchange programme Interval International, heading up their Italian operation for seven years.
Migani sees fractional buyers coming from new source markets in the next few years, particularly Russia: “If you had the right product in the right location for the Russian middle income market – which is usually something very different from what the Brits would buy – you could really do very well.” She also thinks significant numbers of British buyers are looking at affordable fractions at a price level where financing is easily available. “They're looking at year-round sunny destinations like the Mediterranean. If you look at Turkey, where you have also got brilliant golf, the cost of real estate isn't high. Cyprus is another good option for what I call low- to mid-market fractionals.”
Byrne Murphy, Palazzo Tornabuoni
Byrne Murphy has a track record of bringing American business models to sometimes hostile European markets and making them work. A private equity investor and developer of real estate, he is co-owner and co-developer of the Palazzo Tornabuoni residence club in Florence, Italy. He also has a data centre operation in Scandinavia; an engineering company in the UK, and other interests in the US.
“The iconic high end projects will be selling again albeit it at a slower pace than before the downturn, with on-again off-again momentum. It will not be just 'luxury' which attracts the buyers (there's plenty of that everywhere) but those projects which provide 'experience'. The more unique the experience the more attractive it will be to a specific niche of buyers. Finding those buyers though will require more customized and more expensive marketing. There will be more collaborative marketing efforts as well, whether through more innovative exchange programs or marketing campaigns amongst projects/developers that have not collaborated together in the past,” predicts Murphy.
Howard Nusbaum, American Resort Developers Association
Howard Nusbaum spent ten years with American Hotel & Lodging Association and was VP of sales and marketing for Janus Hotels and Resorts before becoming president and CEO of ARDA. In his current position he ensures ARDA is a vocal advocate for all forms of shared ownership.
He says the market is in for “ a thorny short term, but the long term picture is still quite bright with strong demographics for the foreseeable future. The fractional marketplace will re-emerge with stronger fundamentals from lessons learned from the credit crunch, pent-up consumer demand and a savvy purchaser more conscious of wanting to pay for only the slice the of vacation real estate they have the budget and appetite to enjoy. As an industry we need to take advantage of this lull in the market place to come together and create a strategic recovery plan that will support the concept of shared-use as the alternative to second home ownership. Today’s rational rich want the experiences that come with owning a vacation home but without the headaches and overhead. Fractional ownership is well positioned once this recovery is underway to capture more market share.”
Richard Ragatz, Ragatz Associates
A name inextricably linked with fractional ownership, Richard Ragatz is the founder of Ragatz Associates, a consulting and market research firm in the global resort real estate industry. The company has worked on more than 2,500 assignments in 72 countries since its formation in 1974. It specialises in feasibility analyses, business planning and consumer research for shared-ownership products, including fractional interests and resort timeshare.
Ragatz says: “Due to ever-changing global economic conditions, it's difficult to predict performance of the fractional interest industry for 2010. Most likely, sales volumes will increase perhaps 25 per cent or more over the down year of 2009. Most of the increase will come from sales of existing inventory rather than from new start-up resorts. All of our consumer research still finds definite consumer interest in the concept, especially in comparison with whole-ownership and resort timeshare. Financing will remain the biggest challenge, including consumer, debt and equity. We will most likely see more sophisticated approaches to marketing, more innovative products and more rational pricing. Performance will not approach the record year of 2007, but we should be on an upward growth pattern again.”
Sarah Rezak Glasgow, Rezak Resort Consulting
As president of Rezak Resort Consulting, Sarah Rezak Glasgow works with various clients regarding their proposed fractional interest luxury real estate offerings. This can include consumer market research, feasibility analyses, creation of use plans, and/or facilitation of a client's entry into the fractional business. She also works with various partners to launch marketing and sales efforts and successfully monitor them from the outset.
A former senior consultant with Ragatz Associates, she says: “I expect that the credit markets will eliminate or at least significantly postpone most new fractional real estate construction plans in North America in the short term. I also think that the fractional real estate model needs to be slightly adjusted. Developer financing is a new necessity and should be considered when analyzing financial feasibility of a conversion or existing fractional product. I strongly believe the ability and willingness over the next three years to hold consumer paper for at least five years will separate the wheat from the chaff. I still feel strongly that the concept of fractional real estate will be successful in the long-run.”
Nick Turner, The Registry Collection
Nick Turner is vice president of business development at The Registry Collection. Has has more than 20 years' experience in the international, hospitality, leisure and travel sectors. In his current role he is responsible for growing the Registry Collection brand and overseeing new affiliates in Europe, the Middle East and Asia.
Turner says: “In 2010 we will see a lot of activity, lots of launches of new developments to the market. The primary consumer will be that middle-income consumer who has been squeezed over the last few months but is possibly slightly better off due to low interest rates, but still wants a place in the sun.”
There will be new product types coming to the market, including lots of conversions where whole ownership resorts will start selling fractions. We are also seeing a growing number if developers who are incorporating fractions in mixed-use developments from the planning stage. These projects are in locations as diverse as Montenegro and North Wales. Sales pace will come down to the age-old challenge of delivering a really good quality product in a triple-A location, providing a broad range of amenities on site which consumers can pay for on an a la carte basis.”
Preben Vestdam, Valhalla Associates
Preben Vestdam is the president of Valhalla Associates, an advisory and management company servicing developers of luxury mixed-use hotel and resort properties in the areas of development strategy, project feasibility and implementation planning of leisure real estate products. Valhalla also implements and manages the sales & marketing operation of fractional ownership products and Private Residence Clubs.
“2010 will be a very active year for the fractional ownership industry. We are currently experiencing a growing number of luxury leisure real estate developers interested in exploring the fractional ownership model as a complement to their whole ownership offering. And with a further recovery of the financial markets giving access to reasonable project finance, we can expect new project developments returning in key markets. In the resort projects where we are involved in the sales and marketing of fractional ownership products, we have experienced that the fractional buyer is returning faster than the whole ownership buyer. So as the consumer confidence recovers, fractional ownership is a strong product to lead with.”
Veranne Wilkinson, Hutchinson Group
Veranne Wilkinson is managing director for the Hutchinson Group in Europe, which includes Citadel Trustees Ltd. One of her principal objectives is to develop the Citadel brand, with a particular focus on innovative investment projects such as fractional products and Unregulated Collective Investment Schemes, which Wilkinson says represent exciting and increasingly lucrative business opportunities.
Wilkinson says: “Despite the economic downturn, we have heard many success stories in 2009 and I believe that we will experience a steady and positive growth in 2010. Our developer clients are expanding their activities into new and more innovative products, with a fast-growing interest in fractionals and similar projects involving an element of investment, pooled-income or shared profits, and the number of new enquiries is still on the increase. Yes, the year ahead is going to be challenging but there is certainly very strong interest in the fractional property market across Europe and much enthusiasm within the industry. The major element yet to be added is consumer finance for the higher value fractions – once this has been addressed, there will be more success to come.”
More than 250 fractional property industry professionals gathered in London last week for the fourth annual 
Piers was followed by one of the most respected figures in the fractional and resort development world, Dr Richard Ragatz. He presented his “Fractional 101” model, which gave a concise and honest representation of the pros and cons of fractional schemes for both consumers and developers.
Gregg Anderson of 
Any cobwebs which might have resulted from Thursday’s Johnnie Walker whisky tasting night were soon blown away during the first session of day two, when Valerie McDermott of 
The winners of the 2010 Fractional Life Awards were then presented with their prizes, with Pestana Golf, yooPhuket and The Registry Collection the triumphant trio this year. 
