Fractional Summit 2009 - A Bright Light In The Property Industry

Thursday 23rd and Friday 24th April brought together fractional real estate professionals from all over the world, converging on London to attend ‘Fractional Summit’ www.fractionalsummit.com , Europe’s fractional ownership property conference.

Held at the prestigious Hilton Metropole in the heart of London and organised by Fractional Life www.fractionallife.com with headline sponsorship from Registry Collection and sponsors: FOC - Fractional Ownership Consultancy, Citadel Trustees Ltd, DCP International, Castello di Casole - Timbers Resorts, Preferred Residences, First American Title and Yoo Phuket the event attracted over 210 fractional property developers, brands and service operators together with leading property journalists. The room was packed with delegates keen to learn more about the fractional property marketplace and network with delegates from Denmark, Italy, Spain, France, Portugal, Republic of Ireland, USA, Cyprus, Turkey, Mexico, Thailand, South Africa, Dubai, Russia, Australia, Cape Verde, Lebanon, India, Croatia and the United Kingdom.

The speakers and panellists read like a who’s who within the fractional industry and Piers Brown, Founder of Fractional Life chaired the 2 day event.
The theme of this year’s conference was ‘Fractional ownership: the rewards and opportunities’ and during his welcome speech Piers thanked all delegates for such a great turn out (circa 80% up on last year) and remarked that as other property conferences have floundered around the world, Fractional Summit has got stronger and “the appetite for fractional ownership in Europe is now well and truly here”

He reminded delegates of the positive media coverage the fractional industry is receiving in these turbulent times and how he felt “a fractional property offering was now a prerequisite for the right developments and fractional’s time is now”.

He introduced his first speaker by sharing the fact that the US fractional marketplace in 2008 was worth a total of over $1.5 billion despite the economic slowdown and that the European fractional property market is at the beginning of a sustained growth curve.

Preben Vestdam from Valhalla Associates covered the Fractionals 101 session outlining industry definitions of luxury fractional ownership and explaining the similarities and key differences between fractional, destination club and private residence club business models.

Sarah Rezak Glasgow, Ragatz Associates then enthralled the audience with her knowledge of the US marketplace and how the US marketplace has grown to what it is today. She presented the reasons why the concept makes sense in today’s economy and how the luxury segment of the holiday home market will be the first to rebound from the current real estate quagmire.

An enthralling panel session moderated by Marc Da Silva, Homes Overseas Magazine followed which featured expert panellists commenting on the reasons why specific locations around the globe are ‘fractional hotspots’. Peter Kempf, DCP International told delegates to expect ‘phenomenal ’ growth in Europe over the next few years at a pace to exceed the growth experienced in the US, and explained his reasoning behind this. He was also keen to ensure the fractional property industry grew without the stigma associated with timeshare and called on the industry to do more as it expands.

Jerry Cobb, FOC echoed Peter’s views. Piers Brown stated FSOTA, www.fsota.org the newly formed fractional trade organisation was now part of RDO, the Resort Developers Organisation and echoed Peter’s views however he also warned that in principle many companies within the industry want this, but when asked to pay membership fees, the numbers diminish considerably.The panel was asked about whether the companies they represent are spending more on sales and marketing activity at this time and Marina Palmerio, representing Castello di Casole a mixed use resort in Tuscany said they were and had been especially successful with fractional sales because of this.

The next presentation was given by fractional property developer Dutchman Marc Koerts, Managing Director of Avenio Prieure. Marc stunned the room with his entrepreneurial passion for fractionals describing more about his 3 ‘in progress’ developments in France. He explained how based on who he met and the knowledge he gained from attending Fractional Summit 2008 as a delegate last year, he went onto successfully launching the first ever fractional ownership offering in Provence in April 2009.

Nick Turner, Vice President, Business Development, The Registry Collection commented on the fractional boom currently being experienced in Europe and why in his personal view the European market will be worth more than $1.5 billion within the next 5 years.

After a break for some networking at lunch, Richard Thomas, Jet Republic gave a talk about how his company entered the fractional jets market and how they are attempting to turn the whole private aviation market on its head with unprecedented and innovative aircraft design coupled with impeccable service. He was asked why the company was based in Portugal and told delegates that many fractional jet operators, including NetJets their main competitor are based there because of favourable tax breaks. He told delegates the reasoning behind Jet Republic placing the biggest European order ever - $1.4 billion dollars of private jets last year despite around 40 of the large commercial airlines going into administration during the last 12 months. After taking questions from the floor and revealing that 0.3% of Portugal’s GDP (where Jet Republic are based) is because of the fractional jet industry.

He handed over to Chris Allen from Citadel Trustees Limited and representatives from Irwin Mitchell for the “‘Seller beware’ – behind the scenes for a smooth operation” slot which focused on the importance of a properly structured ‘back end’ and how this can easily be forgotten about in the current market where there’s such a strong focus on sales. Representatives from Irwin Mitchell discussed the implications of the new European Directive and how appropriate the differing fractional products are for SIPP related investment.

Greig Holbrook from OBAN Multilingual presented a fascinating talk about online multilingual search engine optimisation and the importance of using the web to drive sales leads from those markets where English is not ‘mother tongue’.

Piers Brown rounded off the day, thanking everybody for their contribution before inviting delegates to join him for the business card swap and cocktail reception later in the bar.

The second day started with Claude Attala, Northcourse Advisory Services presenting the findings of the first ever research paper dedicated to the fractional property market in Europe: Trends in fractional real estate 2009. The detailed 92 page fractional report, commissioned by Northcourse and Fractional Life identified the fractional projects currently in Europe and gave delegates the most qualitative and quantitative information available today for the current marketplace and predictions for the future. The full report is downloadable here:-

After breaking for coffee, the next panel session focussed on ‘attracting the High Net Worth Individual and connecting with different cultures’.
Panellists were Jane Guarducci from Palazzo Tornaborni, David Hughes Barclays Wealth, Stephen Wise, Founder and CEO The Hideaways Club, and Maurizio Bisicky, Regional Vice President, Marriott.
Piers Brown moderating the session commenced the debate asking panellists to discuss the quote “Luxury is over. It’s a price to pay for our previous over indulging lifestyles. As we come out of a recession people are going to spend less on new possessions and no less on new experiences”. The session also touched on topics like partnership and network marketing, the sales cycle and the ‘emotionality’ of the purchase.

Fabrizio Harper, Head of Sales at Fractional Life then introduced the inaugural Fractional Life Awards 2009, stating the reasoning behind the launch of the awards and how he the company had been inundated with entries from around the Globe. Following the presentation to the winners, www.fractionallife.com/awards.asp the Summit came to a close following a really upbeat ‘Ultimate Q and A’ session and very positive panellist comment on the potential growth of fractional property in Europe.

05/05/2009