New Hilton Head Area 'Residence Club' Epitomizes Trending Pattern of Vacation Home Ownership
June 13, 2011
HILTON HEAD ISLAND, SC – June 13, 2011 – Timeshares, vacation and destination clubs as well as other fractional private residence clubs are all being forecasted to rebound more quickly and strongly than whole-ownership second homes as the economy recovers, according to data recently released by industry research firm Ragatz Associates.
Despite their distinct differences and regardless of nomenclature, these vacation properties, as a group, today offer an increasingly attractive alternative to second home ownership.
Ragatz Associates, an Oregon-based international consulting/research firm, recently canvassed nearly 300 worldwide projects offering some form of shared ownership. Key factors pushing the anticipated demand uptick were determined to be affordability combined with an increasing consumer desire for vacation convenience and flexibility — the exact formula most fractional projects offer.
In the Hilton Head Island, SC area — where fractional ownership has flourished since the 1980s — one local residence club, which appears well poised to take advantage of this fresh demand, is The Sanctuary at Hampton Lake.
We anticipate shared ownership to experience significant growth as the national economy recovers, stated Michael G. Burns, President and CEO of Private Residence Resorts of Seattle, whose firm specializes in development and marketing of fractional ownership resorts. Burns currently serves as special consultant to The Sanctuary. He is enthusiastic about the lakefront property’s prospects because of its close proximity to two major vacation destinations, Hilton Head Island and historic Savannah, Georgia, as well as its attractive pricing.
Burns explains: The typical vacation home is only owner-occupied three to six weeks out of the year. When one compares the costs of owning and maintaining a comparable second home, with that of a residence club, the true value of the fractional product speaks for itself. He said The Sanctuary’s luxurious, fully furnished, 3-bedroom/3-bath lakeside homes are being introduced at $135,000 per owner. Today’s consumer clearly sees the good sense in paying only for the time they actually get to use a vacation property, he said. It’s a very tempting premise to have an upscale vacation home without the on-going costs or hassles of whole ownership.
Philip Mekelburg, President of Equity Estates Fund, a boutique investment fund that offers luxury properties around the world, including one on Hilton Head Island, affirmed Burns’ assessment. Even high net worth families who can afford purchasing a million dollar vacation property are finding it preferable to share this way.
Fractional vacation ownership at some level has been a major economic driver in the Hilton Head area for more than two decades. Recent Visitor & Convention Bureau statistics show 25% of all vacationers in the area are staying in some sort of fractional ownership property.
Hilton Head is one of the most sought-after locations within Marriott’s Vacation Club program (it has four timeshare locations on the island) and Disney’s Vacation Club on the island is sold out. However, both Marriott and Disney agree that buyers still consider the flexibility of exchanging their time for other locations an important factor.
Burns concurs. The idea of exchange is an important consideration to the purchase decision by residence club buyers even if most don’t end up choosing to swap. That’s why The Sanctuary has partnered with The Registry Collection, which offers owners an opportunity to exchange their time at luxury properties at many of the world’s most desirable destinations on five different continents — from Scotland to Morocco to Hawaii. There are some 200 luxury resorts in all.
Asked to explain the differences between private residence club properties like The Sanctuary with properties like Marriott and Disney, Burns explained: The public lumps them together, and indeed all three come under the umbrella of shared ownership. However, in reality, timeshares are more of a prepaid vacation that may or may not come with deed and title to the real estate. Fractionals, on the other hand, are a reduced-cost alternative to owning real estate in a specific vacation location. Members receive a real estate deed, with the right to use the home virtually any time, but they can also choose to experience other vacation destinations.
