The New Paradigm: Fractional Resorts - A Luxury Lifestyle, Not a Hotel Room

By Tom LaTour Principal, LaTour Signature Group | November 08, 2008

Vacation home ownership is not a new concept in the hotel development world. For decades, time-shares and second residences built in desirable resort communities and quickly absorbed by wealthy buyers have resoundingly demonstrated that people want more than just a hotel room when they vacation in these primo destinations.

Few experts in the hospitality industry would have predicted it earlier this year, but after a brief lull the market for luxury fractional resorts is starting to heat up again.

This is not to say that consumer demand or development volume has come roaring back to the levels once projected for the product, but rather that the investor community has focused on this segment as being one of the most promising opportunities for the decade ahead.

Many reasons have been offered by various industry leaders as to why fractional resorts are garnering so much attention, but chief among these is the fact that few new for-sale luxury resort products are being initiated, while demand among affluent consumers for an innovative vacation real estate model has been steadily increasing.

In the past five years, the fractional ownership buzz has been amplified within the luxury space -- and throughout popular culture as well (nee Hard Rock "condotels"). The result of this attention? Resort owners and developers around the world are tapping into the fractional ownership trend.

By all indications, there's a paradigm shift occurring away from hotel rooms and more toward luxury vacation lifestyle experiences. Consequently, these new ultra-luxe fractional resorts are catching the eye of developers and investors alike who want to be well positioned when the economy regains its strong footing and luxury consumers start flexing their buying power again.

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Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.