“Conspicuous Leisure” was a term coined by American Economist Thorstein Velben.  Per Wikipedia: “The term denotes visible leisure for the sake of displaying social status. The term is generally reserved for those forms of leisure that seem to be fully motivated by social factors, such as taking long vacations to exotic places and bringing souvenirs back.”

It appears that we are shifting away from this “Conspicuous Leisure” and its parent, “Conspicuous Consumption”.  Yes, our retirement portfolios have taken a hit and it’s a lot more expensive to fly privately and to relax in fully stocked, wholly-owned pied-a-terres but I think it goes deeper than that.  Add the “Green” element – i.e. waste conservation et al – and conspicuous consumption just isn’t cool anymore.  To put it another way, I doubt John McCain is too thrilled about owning seven homes right now. 

What is cool?  Sharing is cool.  Fractional is now hybrid; it’s the Prius.  Sure, mega rich socialites in Hollywood could afford any gas guzzler of their choosing but that’s not cool to them.  It isn’t cool because it isn’t right.  Not only is it trendy to proclaim multiple second homes as waste dumps, it’s accurate.

Private Residence Clubs, the top shelf answer to fractional ownership, offer the best of both worlds; high-end vacation digs in a responsible fashion.  In most cases, the residences are ultra upscale, furnished as beautifully as your own home would be.  Owners are pampered as they would be in a five-star resort and typically the reservation system allows them to use the club as they choose.  BUT, the owners are sharing this real estate and conserving valuable resources, there is nothing un-cool about that. 

In just one Private Residence Club development a couple hundred boomers, Gen X’rs, Hollywood moguls and professional athletes can all enjoy the same high-quality accommodations and services as they would have with their own home.  No one has to watch several hundred acres of beach front being converted to enormous second home properties that sit empty for 48 weeks per year with the A/C running. 

A note to you socialites and pro athletes:  many (if not most) Private Residences Clubs will still offer the privacy you’re looking for.  Now you can have your gorgeous second home (or seven of them if you choose) without all of the extra cost, waste and un-cool conspicuous consumption that goes along with it.  A little (organic) food for thought.

Eric Pierce

Notice the new link on the right.  Just beta mode at this point but let’s see what happens!

We still have a lot of work to do folks! 

The article (below) by Lisa Fickenscher that recently ran in Crain’s New York Business on Hyatt’s expansion plans in New York innocently refers to fractional ownership as being synonymous with timeshare by saying “If the fractional units (known as time share) in the Midtown property…”. 

While many of us understand the vast differences between the two industries, the overwhelming majority of the article-writing world is in the dark.  We can assume that Journalists (usually) do research on what they write about which means they (usually) will have a more advanced level of understanding of the topics they write about as compared to John Q Reader.  So if Journalists are still in the dark about the fractional ownership and Private Residence Club industries then John Q. Reader can’t possibly be up to speed on them - especially their differences from timeshare.

No, this is not a bad thing.  It’s actually somewhat exciting.  The article reinforces the notion that our smart little industry is still literally in its infancy in the grand scheme of things.  Sure we’ve seen strong growth and more and more people are talking about it and why it’s a more practical form of second home ownership.  But when you compare the two industries on simple overall public awareness, fractional is to timeshare as the Boise Hawks are to the New York Yankees.  I would guess that maybe 1% of the U.S population is familiar with the Boise Hawks but they are a good product and priced right for the current economic situation - yes, I’m stretching but you get the idea.

To make a long story short, we are poised for strong growth but awareness is still quite low.   Everyone in this industry needs to continue to work hard at explaining the differences to those who are still in the dark. 

I have offered any assistance needed to Ms. Fickenscher if she would like to clarify to her readers the real differences between timeshare and fractional ownership.

Read the article here:  http://www.crainsnewyork.com/article/20090417/FREE/904179977

Eric Pierce

I recently wrote a pretty in depth article on our Feasibility Analysis for FractionalReport.com.  I cleverly called it: “The Fractional Feasibility Study - What Is It and Why Is It Important?

Here is the start…

A feasibility study is an extensive and detailed review of all aspects related to the development and financial feasibility of a fractional project.  All facets of the project are weighed, analyzed and provided in an easy to understand format for developers, owners, lenders or private equity investors.

It’s pretty safe to say that the reduction of costly expenses and the realization of stronger profits is the ultimate goal of any real estate developer.  So what is the number one killer of the ultimate goal?  Mistakes.  Based on this logic, the top priority for real estate developers should be the elimination of as many mistakes as possible.

Of course, not all mistakes are preventable.  Some things just happen that no one can predict; take credit swaps and sub-prime lending for example.  Those mistakes were made by others and were completely out of our control.

That being said many mistakes are of our own doing and can be prevented with up front planning, i.e. foresight.  In the fractional real estate business, foresight is a bit more complex, as most land owners and developers simply are not familiar with what it takes to properly structure, market and sell a Private Residence Club (PRC).  While their goals of minimizing mistakes are the same, the importance of mistake-minimizing tools is much greater.

Here I will provide a more detailed review of a crucial mistake-minimizing tool:  the fractional feasibility study.  I will review the logistics involved and list some of the important elements included in the study.

Get the rest of the article here:

http://www.piercegroupllc.com/core-services/fractional-services-in-focus/fractional-feasibility-study.html