When the time-share marketplace came to a halt in the late 1980’s due to issues concerning unscrupulous practices by various developers, Marriott seem to rescue the industry with their foray into the time-share arena and subsequent vacation-club opportunities.

Marriott International Inc’s disclosed it will cease developing new time-share and luxury residential projects. In addition the company will write-down the value of their under construction projects by $760 million. A major shake up in the vacation-home arena.

While not surprising as the major players including Starwood, Wyndham and Marriott has been placing less emphasis and marketing towards their time-share projects, Marriott’s decision to cease development until the market recovers and dropping prices on existing inventory is most troubling for the time-share industry.

At present, Marriott has 21 projects under development in North America, Europe and Asia including time-shares, fractional-ownership projects and luxury-residential projects marketing under the Marriott and Ritz-Carlton labels.

Wile Marriott has commented it will permanently exit the luxury-residential market; they plan to return to building new time-share and fractional-ownership projects when the market demand returns. For the first 6 months of 2009, as the vacation market was in the doldrums, Marriott logged $338 million in time-share sales. Many attribute this to an affordable opportunity for a vacation residence and the excellent reputation of Marriott.

Of interest will be the actions taken by Starwood and Wyndham, the other major players in the management and development of time-shares, fractional and luxury vacation home marketplace.

As the economy stabilizes and people again look for diversity concerning their investments and lifestyle, we appreciate the many options associated with vacation home ownership. No matter what type of ownership you consider, the present time may offer a “buying opportunity” which in the future we may remember as an opportunity missed.

For many prospective vacation homeowners, fractional and interval ownership opportunities offer many advantages and access to a vacation residence at a much-lower price point. While the “time-share” industry suffered from bad publicity during the 1970s and 80s, the industry has changed. Major players include Ritz-Carlton, Four Seasons, Marriott, Wyndham and others. In addition, updated real estate safeguards have made interval and fractional ownership as secure as fee-simple ownership.

There are many legal and technical differences concerning leased and deeded interval and fractional ownership. However, the common denominator for most is the luxury of usage. While a weekend home within close proximity to one’s primary residence may receive 100 nights of usage per annum, most vacation homes located beyond150 miles receive on average just 23.5 days of usage per year.

The interval and fractional ownership opportunity should be considered by those who may be using their vacation residence for less than one month per year, desire a maintenance-free property and are looking for ownership at an affordable entry point.

Fractional and interval ownership arrangements have many advantages, yet are not correct for every purchaser. If considering the purchase of a vacation residence, the first and foremost thing to consider is the amount of usage. This includes your immediate family, friends, and associates and of course, we would be remiss if we did not mention possible rental income from nights of non-use.

Fractional and interval ownership may be more complex versus fee-simple ownership. We strongly suggest you consult with local real estate brokers in the vacation community you are considering as well as with your attorney and/or tax advisor as each ownership option has difference tax advantages and consequences.

As the economy begins to stabilize, we at The Society have enjoyed an increase in calls concerning our marketing services for vacation home rentals. Yet, before considering a purchase and/or interviewing management companies, it may be best to “Try Before You Buy”.

Let’s face it, we have all been on vacation and while enjoying ourselves, we begin to fantasize about the possibility of a vacation home purchase and start looking in the windows of real estate offices next door to the tee-shirt shop. While ownership can take many different forms from interval-ownership, time-shares, full ownership, partnerships and so forth, we suggest you “rent before you buy”.

1) Learning the Lay of the Land: Recently I enjoyed a vacation in Costa Rica. We stayed at a wonderful resort community and were truly enjoying the exemplary service provided by the management company representing our vacation home rental. We opened a dialogue with the management company assuming they would be most proactive in assisting us with a purchase and management contract in the community. To our surprise, the management company advised us 1) High-season is vastly different than the time we were visiting and 2) they suggested another area of Costa Rica to visit and 3) consider visiting at different times of the year. The management’s suggestions were right on target. We found a neighboring area we were even more impressed with and were assured in-season crowds would be minimal. All of this came about due to my comment “If I have to place a book on my lounge chair at 7AM to reserve it, I will not be a happy camper”.

2) Multiple Visits: From my experience as a real estate broker with experience in resort communities, I suggest visiting 3-4 times before making a purchase. By visiting multiple times, you can assess if the initial “wow-factor” continues on each visit and learn about the different seasons. For example, one of my clients bought in Vail, Colorado for the skiing. Yet, after a summer visit and enjoyment of the many golf courses, the clients now rent their vacation residence during the winter months (through The Society) and enjoy the summers on the golf course and biking the many mountain and paved trails.

As the fractional ownership market continues to expand, we at The Society thought you, our clients may be interested in the Top Ten for this week according to the Luxury Fractional Guide. What does the list mean for you, read between the lines and access based on popularity and demand and the fact that owners of fractional’s are entering the rental marketplace to generate income.

Once known as “time-shares” with one of two fixed weeks of use, the new generation of fractional’s offer their owners inherent flexibility concerning use and many more nights of ownership. It is not uncommon to see fractional’s in 1/8th, 1/4th, and 1/3rd shares, most notably with super-luxury properties. (links are included for in-depth review):

#1 - The Bermuda House (Emerald Isle, NC)
#2 - Gulf Winds (Hernando Beach, FL)
#3 - Villa Bonair (La Jolla, CA)
#4 - Beach Club at Siesta Key* (Siesta Key, FL)
#5 - Crane Residence Club (Barbados)
#6 - Poet’s Cove Resort (Pender Island, BC, Canada)
#7 - Woodhaven Country Club Condo (Palm Desert, CA)
#8 - Santa Barbara Beach Club (Santa Barbara, CA)
#9 - Serenity Cove (Soda Springs/Lake Tahoe, CA)
#10 - Waikoloa Beach Resort Villa (Waikoloa, HI)

Did you know the spend for the cruise industry was the same as the spend on vacation home rentals. By 2010, the spend on vacation home rentals will exceed the cruise ship industry on an annual basis.

As mentioned in the July 7th newsletter, summer airfares have been skyrocketing. With increased demand and decreased capacity, fares were bound to increase. However, the Fall season, beginning after Labor Day, flights seem to be at bargain rates. Fall historically is a slower travel season i.e. kids in school; summer vacation is over, others preparing for the December holidays.

However, if you are able to travel during the Fall season, bargains are to be had. In addition to airfares, many of our property management partners run specials during the post-summer season. Europe is glorious in the Fall. The Southern Hemisphere is entering their spring, a great time to consider crossing the equator. For guests vacationing in the Caribbean, Mexico and Latin America, once crowded beaches become secluded pre-December holiday rush. The Rocky Mountain West is alive with the changing of the Aspens against the backdrop of snow-covered peaks. If not now, when?

In one of the respected hospitality journals I almost skipped an obscure article mentioning hoteliers and resorts in beach destinations are actually reaching full occupancy and many are either sold-out for August to Labor Day or have raised rates based on demand. A couple of ideas from The Society:

1) Availability: Contrary to the above there is still availability if you are willing to be flexible. Of course beach properties within close proximity of major metropolitan areas have witnessed increased demand from their “drive-time” markets. Thus, consider beach destinations beyond the 2-4 hours of a major city or even better, consider a destination beach. The beaches of The Rivera Maya (check out options from Akumal-Villas, please mention The Society) are glorious during the summer as are many options in the Caribbean with rates in-line with their mainland counterparts.

2) Location: While beachfront and within walking distance of the beach is always in demand, consider “biking distance” from the beach. For example, in East Hampton, NY, by crossing Main Street, rates drop, yet you are still within biking distance of the beach. If driving distance, even with attractive pricing, be sure to ask if a) parking is available and b) if a permit or related is needed and provided by the homeowner or management.

3) Post Labor Day: Granted, not a true summer vacation, post Labor Day can be most attractive. For beaches along the Atlantic Seaboard, the water temperatures are actually highest in September and October. Bermuda is glorious during September and October as the crowds depart and the beaches become a private sanctuary.

4) Last-Minute: When searching TheSociety.com, be sure to call the management companies. While the house you desire may be booked, be sure to ask if an alternative may be available. Be flexible, while the 3-bedroom may be booked, consider a 2 or 4 bedroom, you never know the deals which may be available.