In a report entitled "Ernst & Young's Top 10 Thoughts on the Hospitality Sector in 2008", the advisory firm commented on the trends it sees for destination clubs, condo- hotels and fractional over the coming year.Fractionals
Commenting on fractionals the report notes:
We agree that having a fractional exchange program is important, but as in all real estate the key thing for any buyer is that old adage "location".Destination Clubs
Commenting on the clubs, the report notes:
Size can certainly help in the destination club market. Bigger clubs can offer more homes and destinations to members and can take advantage of their scale to buy properties or develop their own properties at advantageous pricing. However, not everyone wants to be part of one of these larger clubs, and there is very much a place for niche, boutique smaller clubs. SherpaReport certainly agrees with forecast that there will be more consolidation over the coming year. We're expecting a big announcement on this front in the near future.
Most of the clubs have revised their membership plans over the last year and now offer a wide selection of plans with varying numbers of nights of use. Some members may have as little as 7 night of use, while others may have as many as 75, so With this diverse membership plan structure, it is much more important for prospective members to look at the actual occupancy usage for homes. For instance during the winter, a clubs ski homes may be booked nearly 100% of the time, but will be quieter in the spring and fall. Read our "Guide to Destination Clubs" for more questions to ask as a prospective member.
As a general rule the most common non-equity structure is for clubs to offer 80% refunds of the membership fee, when a member resigns from the club. This is the base level and some clubs do offer a more generous structure.
This section of the report ends with: