the Growing Variety of Vacation Home Options
|WASHINGTON - October 11, 2006 - With today’s evolving vacation home
market, consumers are faced with an increasingly diverse marketplace and
options in leisure travel, according to the American Resort Development
Association (ARDA). To select the vacation home best suited to meet their
lifestyle needs and vacation dreams, consumers must educate themselves
of the market terminology, ownership options, and assess their vacation
preferences, travel goals and budget.
“Terms such as deeded, fractional ownership residences, destination clubs and timeshares are frequently heard because of a surging interest in vacation properties that move beyond the traditional vacation accommodations or second home,” said Howard Nusbaum, president and chief executive officer of ARDA. “Sorting through exactly what these products offer and for whom they are best-suited can puzzle even the most sophisticated consumer.”
Four out of every 10 purchases are a second home – either being used for an investment or vacation property, according to the National Association of Realtors, and this trend is expected to grow as baby boomers enter their peak earning years. The growing variety of vacation home options is redefining leisure travel, with the following product categories:
Timeshare / Vacation Ownership
Overview: Vacation ownership may be purchased through deeded property ownership, right-to-use or a points-based program. Owners purchase a vacation villa for one or more weeks within a fixed or “floating time” system, which allows scheduling each year's vacation during the most convenient week within a specified season. With timeshare, consumers have the opportunity to purchase time at resorts offering a wide range of amenities at different destinations. While many vacation ownership villas have two bedrooms and two baths, floor plans range from studios to three or more bedrooms.Fractional Ownership / Private Residence Clubs
Overview: Fractional ownership buyers typically have a recorded deed and title. Fractional ownership has the benefits of second home ownership, but for a fraction of the cost and without the maintenance responsibilities. Considering the average vacation home buyer uses the property just three to four weeks a year, fractional ownership tends to be commensurate with actual use of a vacation home. Additionally, fractional properties are generally affiliated with high-end hotel companies or high-end boutique operators, where owners have the benefits of personalized services and amenities.Destination Clubs
Overview: Members of a destination club are not buying a specific property/real estate, but rather the right to use any of a portfolio of homes owned or operated by the club company. With few exceptions, they offer a non-equity based membership emphasizing a broad selection in vacation home experiences. Most destination clubs also offer members concierge services.Condo Hotels
Overview: Condo hotels offer a portion of their hotel room inventory for sale to the public. The owner may use it for vacation or corporate housing needs, or place in a rental program typically managed by the hotel. Owners then receive proceeds from the rentals. Buyers enjoy the benefits of owning real estate in a desirable location coupled with hotel amenities and services. Annual dues also apply.Traditional Second Home Ownership
Overview: Viewed as a lucrative financial investment, traditional second home ownership appeals to those seeking a vacation setting to share with family and friends and/or use for business whenever they choose. Owners have full responsibility of maintaining the property, or the owner must hire a management company. Homes purchased in popular tourist regions can generate revenue for the owner because of the willingness of tourists to pay high rental rates..
Vacation Assessment Questionnaire
“There are several key factors to consider when evaluating vacation home options,” explained Nusbaum. “ARDA recommends the following vacation assessment questions to help consumers match the best vacation home to meet their lifestyle needs and budget.”
1. How much time will we be using the vacation home?The American Resort Development Association is the Washington D.C.-based professional association representing the vacation ownership and resort development industries.
|Also See:||Despite the 90-minute Presentation, More than 3 million Americans Own a Time-share Unit / April 2005|
|Dr. Guido Renggli, Creator of the Resort Timeshare Concept 40 Years Ago, Named to ARDA Circle of Excellence Lifetime Achievement / May 2002|