Fractional Business Sense

Fractional ownership is a simple concept to understand and is hopefully becoming easier to appreciate now that you are with Fractional Life. If you have already been through the process of buying a brand new supercar, using it two or three times a month and then selling it 12 months later, only to take a colossal dive to the wallet thanks to insurance, depreciation and maintenance, you'll know exactly what I'm writing about.

The concept is nothing new; pilots and boat owners have been doing it for decades. In theory, it works and makes undeniable sense, but it can be a difficult step for someone to take, especially when dealing with supercars and high-end luxury items, which a huge number of people harbour lifelong dreams of owning and loving. However, consumption in the luxury marketplace is currently changing in that a lot of consumers are hankering for more luxury and perhaps 'unique' individual or group experiences. Full ownership isn't necessarily the piece of utopia that everybody once craved.

"Luxury consumers are spending more, in many cases lots more, on life-changing experiences, while their need for luxury goods is waning. Spending on luxury experiences in the US, including travel, dining, entertainment, spas and beauty services and home services, nearly doubled, from an average of USD 11,632 in 2004 to USD 22,746 in 2005: a 95.5 percent increase." (source: Pam Danzinger, Unity Marketing)

As such, a new socio-demographic group has emerged known as 'transumers' or 'Fractional Lifers.' (source: http://www.trendwatching.com/trends/transumers.htm)

As Wikipedia states:

"Fractional Lifers are consumers driven by experiences instead of the 'fixed,' by entertainment, by discovery, by fighting boredom, who increasingly live a transient lifestyle, freeing themselves from the hassles of permanent ownership and possessions. The fixed is replaced by an obsession with the here and now, an ever-shorter satisfaction span, and a lust to collect as many experiences and stories as possible." (source: http://en.wikipedia.org/wiki/Fractional_life)

As this trend slowly moves through the luxury world, it is easy to understand why fractional ownership is becoming popular with the consumer and a very sensible option for businesses. The warm feeling of 'ownership' is irrelevant and the costs of maintenance and depreciation are far more apparent on the balance sheet. Employees' time is also a consideration that often gets overlooked. Think of the scenario; you are a high-rolling executive based in the City and working all the hours to make millions for your employer each month. The company has a choice on whether to send you on a flight from Heathrow to Paris or to put you on the fractionally owned jet that is only 15 minutes away and waiting for you on a local runway. The answer is obvious-lost time is lost money, so the effective use of your time is real money!

Businesses can also find innovative ways of using fractionally owned assets during their downtime throughout the year; how about rewarding clients or employees with a luxury weekend away in Europe or taking out a corporate account with a supercar club? Impressing shareholders and the company accountant has never been so easy!