Fractional industry gathers in London to focus on the future
More than 250 fractional property industry professionals gathered in London last week for the third annual Fractional Summit.
Delegates from countries as diverse as the Seychelles, Thailand, Portugal, Italy, Spain and the USA, were treated to two days of thought provoking presentations, Q&A sessions and panel discussions.
Fractional Life founder Piers Brown kicked off proceedings by introducing the theme of the conference – Changing Times, Changing Markets. He explained change is the one constant in everybody's life, and that businesses and individuals can either embrace change and use it to their advantage, or become a victim of it.
Piers was followed by one of the most respected figures in the fractional and resort development world, Dr Richard Ragatz. He presented his “Fractional 101” model, which gave a concise and honest representation of the pros and cons of fractional schemes for both consumers and developers.
Luca Franco of Luxury Leisure Properties International then gave a talk about the best way to convert suitable whole ownership resorts in to mixed-use developments incorporating fractional ownership properties.
The first panel discussion of this year's Summit focused on the lessons the US can teach other markets. The US fractional industry has endured two tough years following a phenomenal period of growth. Panellists were in agreement that the slump has been caused by general economic circumstances rather than industry-specific problems. Wally Hobson of Hobson Advisors said: “US consumers are not buying any discretionary products right now – it's not just limited to real estate. The psychology needs to change – people don't feel wealthy at the moment, even if they are.”
Gregg Anderson of The Registry Collection said he expected to see the first signs of a recovery in the second half of 2010, while Hobson and Wayne Sobien of First American Title Insurance Company thought it would be 2011 or possibly even 2012 before we see any significant improvement in the market.
Luca Franco said that an increase in both consumer finance and consumer confidence were essential to recovery, while Dick Ragatz pointed out that around 25 per cent of US fractional buyers already own timeshare, and that this is a market which could well take off in Europe too.
The next presentation, by Nick Turner of the Registry Collection, looked at the value of rental programmes and exchange programme to fractional developments. Turner was followed by a Legal Q & A which discussed trustee ownership, developer funding and business models.
After lunch, three brave developers submitted their business models to the fractional world's answer to Dragons' Den, with Jerry Cobb of FOC, Peter Kempf of Peter Kempf International and Peter Hutchinson of Citadel Trustees all giving their frank opinions on the suitability of the schemes for fractional ownership, as well as examining the strengths and weaknesses of each proposition.
James Bacon, UK account manager for Google Property then ga