Forecasting 2008: Six Fractional Luxury Trends To Watch

It was and remains a substantial growth consequence of another Perfect commercial Storm: where emerging needs of many people appear at the same time as an industry that satisfies those needs. In this case, the need for luxury access, for rebalancing family relationships, the need for sanctuary and retreat from a world still suffering from the fallout of 9/11, of 24 hour work days, of a culture darkened by wars, both extant and emergent, the shared residence industry came a the perfect time. It had been tested, the idea wasn't exactly new, but, as anyone saw, it had great possibilities.

The demand for luxury, whether it be fractional interest in high end real estate, access to 6-10M residences offered by Destination Clubs, or, access by jet card to private jets, or fine art, handbags, helicopters, jewelry, yachts, cars or even exotic pets, now all have a fractional, luxury component attached to them. In the fractional interest industry, fueled by the growing desire for luxury access, has grown 4 fold in three years, growing from a 513M industry in 2003 to a nearly 2.5B industry in 2006 ( stats from Ragatz Associates, Executive Summary 2006). However, according to Bloomberg News, (11/30/07). Luxury GOODS purchases dropped 21%, for each affluent consumer in the third quarter, 2007,while spending on buying and renting experiences gained 11%, according to Unity Marketing, a research firm in Stevens, PA. What does this mean? That handbags are becoming less important than a Mountain Trek to Bhutan, where those handbags would be more of a liability than an asset? At the moment, probably. The trend toward the purchase of the experience rather than a distinct product has been called Transumerism, and has been discussed in Trendspotting http://www.trendspotting.com , and the term "fractionallifers" used to describe the socio demographic group, among others . It is a natural outgrowth of experiential marketing strategies, where what you FEEL when using the product transcends the existence and price of the product itself. Below are a few other trends that may appear as relevant as next year imposes and exposes the up and downsides of the luxury access industry.

Democratizing Luxury

l. Luxury consumers are an indefinable, almost nebulous population - it is rumored they spend a Lot of money each year working at remaining that way -- except for the occasional, visible symbols: the car, the home, the handbag, the watch, the Black plastic card. Thus, the symbols of luxury without the essential HNW, can be democratized for many, not just The Few. Going Fractional used to mean buying into a fractional residence, and joining a Destination Club where access to multi-million dollar residences would allow for greater high end vacation options. At the end of the day, and on into next year, it looks as if it may not matter much as to how much money the member has ( over and above the membership deposit and annual dues payment) - both millionaires and billionaires enjoy the large homes, the concierges, the private chefs, the Net-jet cards. The symbol and the reality, the artifice and the authenticity are becoming enmeshed. From the outside, it looks as if everyone is having a good time. From the inside, it is hard to tell who is high net worthy and who has high net worth. At Bag, Borrow or Steal, http://www.bagborroworsteal.com a fractional handbag and jewelry enterprise, a vintage ostrich Kelly bag from Hermes costs $816.00 a week. A new one, which is wait-listed as of this writing, costs $11,000. Democracy in action.

One Of A Kind Experiences

2.While this oddly democratizing, limited- time-luxury -access- trend is taking shape, another is moving in a different direction: mature affluents are moving toward quiet, exclusive, secretive ' one of a kind" experiences. These people seek products, interests and style experiences that are one of a kind and significantly deluxe. As an example found in the destination club industry is Exclusive Resorts' http://www.exclusiveresorts.com Once In A Lifetime Travel Experiences . Designed for families, couples and adventure, just a few include biking through the Loire valley, traveling to Koh Samui in Thailand, skiing in Patagonia, mountain trekking in the Himalayan kingdom of Bhutan, and the like. Similarly, Solstice, within the coming year, is opening a residence in 2008 Warapuru, in the Amazon rainforest.

Together, Together.

3. Accelerating since 9/11, and threaded with a sense of deep anxiety about our present and future, as well as understanding that our world for the first time since the Industrial Revolution has 24/7 work schedules is, the need for deeper community, that includes family, social occasion and inclusion with all friends we know and love. It is the need for time to be better spent than in the production and consumption modes And quite simply, the shared residence industry allows for a powerful antidote: time is the currency of life, and, according to John de Graaf, et al., authors of the popular book, Affluenza, personal relevance comes in not how much we produce, but well we have connected to others. Human connectedness can be well-fostered within the context of the family getaway, in exclusive destinations and large, child friendly residences. A recent survey of American Express Travel Agents revealed a significant rise in luxury travel among families. 82% wanted high end hotels with kids programs and 56% traveled with Nannies ( KWE Marketing Group, 2007). For these reasons, and others, Solstice http://www.solstice.com , and Quintess http://www.quintess.com have both witnessed a rise in multigenerational travel to their properties - where families with children, children's friends, nannies and grandparents all travel together, together. ( private correspondence, Ben Addoms and Graham Kos with author)

4. Growing Green Awareness

BelleHavens http://www.bellehavens.com , a high end quite destination club, decided this year to have the first GreenHome initiative for all the residences in the their club. This growing awareness of the need for light bulb change, recycling, and lowering carbon-emissions offset while vacationing was an idea that emerged with the members, and finally was adopted by the club itself.

Quintess, The Leading Residences of The World, also has created initiatives to help guests create an environment of eco-friendliness. With it's partner leading Hotels Of The World, Quintess joined the Leading Green initiative, with the help of the ecotourism non-profit organization, Sustainable Travel International. In addition, to promote carbon-neutral travel, Quintess offsets members' energy consumption costs in 60+ global locations by making contributions to renewable energy programs that prevent an equal amount of carbon emissions worldwide.

Traveling on a private jet can bring out guilt and remorse by those who worry about the state of the earth. But this year one fractional ownership jet provider, NetJets Europe http://www.netjetseurope.com , announced a major eco-travel initiative requiring all new and existing private jet clients to pay some €4,000 per year to offset their carbon footprints. NetJets also began to fund Princeton University's Carbon Mitigation Initiative, which investigates green jet fuel technologies for commercial and private jet use.

5. Concierges, Personal Life Organizers

The most significant shared residence industry clubs have always had a concierge component while in residence. Quintess/Leading Residences Of the World, were among the first to take this a step further: for example, designed their OnQ services to follow their members outside the vacation realm. When you become a member of Quintess, you receive OnQ Concierge services 24/7, whenever it is needed. Ultimate resort has done the same. These clubs both know that as wealth levels have increased, it is necessary for members to have personal service providers to make the planning and the execution of the vacation, done by others

The Concierge industry has grown so drastically within the past few years. As an example, Quintessentially http://www.quintessentially.com ( no relation to Quintess/Leading Residences of the World Destination Club) is a concierge company in the UK that started out a few years ago, and now has taken on wine, art, and real estate consultancy. The more affluent the members become, the more these types of organizational services will be needed, wanted and provided by mid-level fractionals to the highest end Destination Clubs. More and more focused services will be acquired by many clubs in the coming years.

6. Health, wellness, age management -

The statistics speak for themselves - there are 80M boomers in the US, someone turns fifty each seven seconds, Over 1/4 of the US population ( 26.8%) are Boomers and they have been 2-10trillion in liquid assets. (all AARP statistics). And the link is, according to Ragatz Statistics Executive Summary 2006, the average age of the buyer of the shared residence asset is 51. It is no wonder then that from the mid-level to the highest end Private residence and Destination Club residences have either a resort with spa closeby, or a Spa on property, mainly because their members use and appreciate these services, and view them more as a necessity than as an amenity. The branded residence clubs often have their own branded spas; The Remede at St. Regis http://www.remede.com , the Willow Stream at the Fairmont Heritage Place http://www.willowstream.com/ , and beyond.

Exclusive Resorts is one destination Club that has residences at one of the premiere Destination spas in the country - Miraval Life In Balance, in the Catalina Foothills outside of Tucson, Arizona, is one of the most popular destinations in the whole coterie of Exclusive Resorts' options. It offers integrative services to enhance a kind of gestalt mindfulness of moment-to-moment life nuance, Ayurvedic treatments, Chi Nei Tsang, Shiatsu, and others are part of the 100 treatment option schedule.

The new Capella Pedregal http://www.capellacabo.com/ , a high end Private residence Club at land's End in Cabo San lucas, Mexico has Auriga, a signature spa and wellness center that includes the tradition of Mexican folk healing. The treatment environment range from treatment pods within the resort area itself, to the Curandera's ( the healer's) cottage on a hill above the resort. Often, these services are inspired by the phases of the moon, and encourage guests to attune their wellness routine to their ebb and flow.

John Cage, a great American avant-garde composer once said, " The greatest luxuries are time and space." It was true in his time but with one difference: in his time, the lines of demarcation between the lifestyles of the rich and famous were very well defined. In our time, due to the rapid growth of the fractional interest industry, more can and will be able to experience the results of these trends, combining the best of the best life has to offer.

Susan Kime

Articles

Any:
An Introduction to Fractionals

Art:
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Handbags:
25 questions to ask about fractional handbag clubs

Boats & Yachts:
25 questions to ask a fractional boat operator
Fractional Boats in New Zealand
Pushing the (fractional) boat out
Boats & yachts- what's on offer?
Fractionalize This

Classic Cars:
25 questions to ask a fractional car club
Why opt for a 'fractional' classic car?
Classic Car Club Feature
Getting the most out of your fractional ownership experience
Why Not Rent?
You've Always Loved Cars?
Fractional Life hits Le Mans

Destination Clubs:
Lifestyle Asset Group: the best of both worlds
Relationship Selling to Todays Affluent Fractional Clientele
Mixed Use: Avoiding a mix up
Focus on the Registry Collection
DCs- Variety is the spice of (fractional) life
Fractional Property Glossary
Aspirational vs. Inspirational Media
Member Strategies For Lean Times
Brand Maintenance During An Implosion
What Goes Up Must Come Down...
Savings through Foreign Exchange
Fractional Finance Solutions
Destination Clubs- an alternative?
Fractional Ownership Heads to Europe
Private Residence Club Perspective Part 1
Quintess
Ultimate Resort
Calistoga Ranch
The Weybridge Collection
The Villas at The Grand del Mar
The Solstice Collection
Vacation Visions: Exceptional Exterior and Interior Designs of Residence and Destination Clubs 
Why the Boomers will change second home ownership in the US
Middle East Leisure Real Estate Market Booming
Bear Mountain Resort - A View from Paradise
New Association For Fractional Ownership
The New Vacation: A Time to Retune Re-Connect

Consultancy:
Profit Opportunities in Luxury Fractionals - A Summary

Exchange:
The Golden Rules of Fractionals

Racehorses:
A Horse by The Name of Fractional Life
Running Down a Dream

Corporate Hospitality:
So Long to the Suite Life

Aircraft & Jets:
25 questions to ask a fractional jet operator
Top tips for fractional jet travel
Jet Republic pilot applications reach new heights
Focus on Fractional Jet Europe
A closer look at fractional aviation
CoGoJets introduces jetpooling
Joining the jet set
Fly for a fraction of the cost
Flying without Wings
Can't afford that jet? Rent it
How Private Aviation Works

Legal Services:
Fractional ownership: is it timeshare in disguise?

Private Clubs:
A tale of two cities - Private residence clubs in San Francisco and London
The Italian Job: interview with Byrne Murphy of Palazzo Tornabuoni
Mixed Use: Avoiding a mix up
PRCs with added benefits
Northstars 'stay and play ' option
Private Residence Club Perspective
Fractional Property Glossary
What are the ingredients for the ideal Private Residence Club?
Savings through Foreign Exchange
Fractional Finance Solutions

Real estate:
Fractional Life in Ireland: For peat's sake!
Fractional Summit USA 2010- Speaker biographies
25 questions to ask about fractional property ownership
Fractional Summit Speaker Biographies
Fractional Property - The New Normal
Gay Community Embraces Fractional Property
Fractional Real Estate Investment Or Lifestyle Purchase?
Fractional Sales: Square Pegs In Round Holes?
Fractional Real Estate Commissions
Urban Fractionals
European Mixed-Use Resort Development in 2009
Mixed Use: Avoiding a mix up
Property- the legal issues
Fractional Holiday Getaways
Fractionals-Recession beaters?
State of fractionals
Fractional Property Glossary
Savings through Foreign Exchange
Fractional Finance Solutions
Fractional Property- the legal issues
Fractional Property Regulation
Fractional Ownership? We'll have a piece
Keep The Door Open
Why Fractional Property?
The Benefits of Fractional Ownership in Private Residence Clubs
Middle East Leisure Real Estate Market Booming
New Association For Fractional Ownership
Saving Homes, Homeowners and Banks Through Fractional Ownership?

Lifestyle:
Savings through Foreign Exchange
Convergence in the Fractional marketplace
The stock market for songwriters

Supercars:
25+ questions to ask a fractional car club
Live The High Life In A Fractional Supercar
Why Individuals Should Join A Supercar Club
Why opt for a 'fractional' supercar?
Focus on Marque II
Eco-road-warriors- How will the supercar club line-up of the future change?
Fresh metal- What's new on the supercar front?
So Why Not Buy?
You've Always Loved Cars?
Supercars- The cars of 2006/7
Let's Take The Lamborghini
Fractional Life hits Le Mans
Ascari Racing Festival Weekend
Fractional Supercars at the MPH Show
GROUP20 The SuperCar Club announce their 2007 Road Show in aid of Children In Need
New supercar club with green credentials

Luxury Motorhomes:
Denver RV show ready to roll

Wine & Spirits:
Wine