News for the Hospitality Executive
|NEW YORK, Dec. 7, 2006 - As a growing segment of
the broader vacation home sector, fractional ownership has achieved an
initial base of awareness in the U.S. according to the Measuring Luxury
Fractional Ownership Awareness study conducted by PricewaterhouseCoopers
on behalf of The Ritz-Carlton Club, Interval International, and Starwood
Vacation Ownership, Inc. The study reveals almost half of all affluent
U.S. households (41%) have heard of fractional ownership, and one-sixth
of affluent households indicate they may consider purchasing at a fractional
ownership resort within the next five years.
"Fractional ownership is indisputably growing in popularity as the vacation home market continues to evolve," said Scott D. Berman, Principal, Hospitality & Leisure Practice, PricewaterhouseCoopers. "Despite the increase in product awareness, there are many U.S. households with means who are still not familiar with fractional ownership and its lifestyle attributes, creating demand-side opportunities where fractional ownership is suitable."
According to the study, among potential fractional ownership buyers, the most important factors in considering a fractional ownership purchase relative to other types of resort real estate include access to a highly-desirable location, residential features, and the overall ease of the fractional ownership experience, such as pre-arrival preparations and freedom from maintenance responsibilities. Additionally, possessing a deed in their fractional ownership purchase was an important factor among those respondents.
When choosing a location for a second home or fractional ownership purchase, broad destination characteristics are more important than any particular activity. Characteristics consistently receiving ratings with the highest level of importance were natural or scenic beauty (78%), ease in getting around once at the destination (69%), close proximity to water (64%), and the cost of real estate (59%).
Additionally, the study found potential fractional ownership buyers are more than twice as likely to purchase fractional ownership at a resort managed by a luxury hotel company (68%) than an independent or boutique resort (32%).
Traveling to a mix of vacation destinations is widely preferred by high-income individuals (73%). This is consistent with the fractional ownership model, which frequently permits owners to travel to their home resort as well as other fractional ownership resorts in a club portfolio. Only seven percent prefer to travel to the same destination, while one in five prefer to travel to new destinations for their vacation experience.
The study findings also highlight the resiliency of the luxury market real estate buyer. Only one in seven respondents indicated that recent trends in the real estate market have caused them to be more cautious about purchasing a second home (14%), demonstrating the majority of affluent households are not significantly concerned with current real estate market trends.
Measuring Luxury Fractional Ownership Awareness was conducted by PricewaterhouseCoopers on behalf of The Ritz-Carlton Club, Interval International, and Starwood Vacation Ownership, Inc. The online survey was conducted by Synovate. The purpose of the research was to gauge the awareness of fractional ownership among affluent households, and understand the preferences of potential fractional ownership customers.
Synovate distributed the online survey to a random sample of 2,891 high-income American households selected from Synovate's Online Consumer Opinion Panel, made up of over one million American households. A total of 897 individuals responded to the survey. The margin of error is plus or minus three to four percent for most questions, and plus or minus nine percent for the question related to the preference to purchase at a resort managed by a luxury hotel brand company, which had a smaller response base.
The response base consisted of individuals with an annual household income of $200,000 or more, and 55.0 percent of respondents reported an annual household income in excess of $250,000. According to Woods & Poole, an economic research firm, 2.5 percent of U.S. households had an income of greater than $200,000 in 2000. The average age of the respondents was 50 years, and 76.6 percent were married or in a domestic partnership.
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 140,000 people in 149 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.
"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
|Also See:||Starwood Vacation Ownership Adding Over 1,600 Villas Under the Sheraton, Westin, and St. Regis Brands / July 2006|
|The American Resort Development Association Examines the Growing Variety of Vacation Home Options / October 2006|
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