Wednesday, March 25, 2009 at 09:49PM In this issue: articles on Cabo San Lucas, the Villas Del Mar and my interview and article with real estate developer Gil Dezer.
Published in Caviar Affair
Friday, February 13, 2009 at 02:35AM As with many great ideas, the shared residence club concept was not born in a vacuum. Its distant European cousin, the timeshare, originated in the ‘70s – then modified over years changing its structure and primary focus to fit the newer needs and wants of the growing boomer and Gen X—Y populations. This group of over 80 million and growing wanted more than the sharing of time: they wanted the sharing of luxury residence space. They wanted uncharted and elite vacation destinations and, in those areas, wanted to own the best in luxury residence living without the home maintenance hassles. And, no matter how capricious the world economy has become, the growth of the most successful equity-based, deeded residence clubs have remained constant, with $2.6B in sales volume in 2008. Not surprisingly, many of those clubs that remain stable and thrive all have something in common: a great hotel brand, with significant resort amenities.
The luxury brand, both in the hotel and hospitality realm, is a vital part of this elite vacation bandwidth. When member/owners buy into a club managed or owned by a high end brand, they buy a promise of the best in service, experience and well-being. Below are the most elite, equity-based private residence clubs, branded and managed by the most exceptional hotel/hospitality companies the world.
Fairmont Heritage PlaceFairmont Heritage Place (FHP) is the luxury fractional club component of the Fairmont Hotel brand.
FHP offers various combinations of one, two, three and four bedroom residences in five locations, with more on the way. Fairmont Heritage Place owns: the Franz Klammer Lodge - a ski-in, ski-out property located in the mountain village of Telluride, Colorado, the Acapulco Diamante positioned on the Revolcadero Beach in Acapulco, Mexico. Other Fairmont Heritage Places include: Southampton, Bermuda, Zimbali, South Africa, Whistler, British Columbia, Miramar Beach, Florida, as well as others coming soon in Dubai UAE and Vail, Colorado. Owners at Fairmont Heritage Place are also members of the Fairmont President's Club, where they can choose to exchange their vacation time with other Fairmont Heritage Place properties.
Their most recent opening is the Fairmont Heritage Place at the world famous Ghirardelli Square in San Francisco, California. The club has been renovated many times, but started out as 19th century chocolate factory, whose sign, GHIRARDELLI, still overlooks the Embarcadero, Fisherman’s Wharf and San Francisco Bay. The residences two and three bedroom units, are sold in 1/10 shares, starting in the $450,000 range.
The Four Seasons Residence Club is comprised of six select locations: Aviara, Scottsdale, Punta Mita, Jackson Hole, and the Peninsula Papagayo.
Before members arrive for their scheduled annual vacation an activity planner contacts them and plans their stay. Service for each residence includes; stocking the refrigerator with groceries of choice, in-house dining or customized meals prepared by a private chef. The club caters to families with children, starting with babysitting and special games in each clubhouse to the 'Kids For All Seasons Program'.
The Four Seasons Residence Club, Vail, has been very successful in its sales prior to its opening in November 2009, according to Jeff Meier, Director of Sales. It is situated at the main entry to Vail Village, and is a very short walk to the Vista Bahn® ski lifts. The property features a 120-room resort, as well as including 19 fractional residences sold at 1/12 interests. Pricing begins, per share in the $400,000-$500,000 range. Owners enjoy full access to Four Seasons services and amenities, including a spa and fitness club, lap pool, dedicated ski/snowboard valet, and a fine dining restaurant,
The St. Regis Residence Club offers a second home with all the amenities and service of a luxury hotel. Currently, the St. Regis Residence Club has two destinations the Aspen Club and the New York Club, though others in in various stages of completion, including the St. Regis Residence Club in Bal Harbor, Florida, opening in 2010. Residences in the Aspen Club are designed by Marc-Michaels Interior Design and are comprised of 2,200 square feet three-bedroom units and 1,700 square feet two-bedroom units. Stone fireplaces, wood floors, Internet access, gourmet kitchens and whirlpool tubs are some of the outstanding features in each residence. The Aspen Club provides fine dining at Olives as well as advanced Laboratoire Remède treatments at the St. Regis Remède Spa.
The St. Regis Residence Club in New York consists of 22 residences, on floors 8-11 within The St. Regis® Hotel. The dedicated St. Regis Butlers, who have graduated from the St. Regis Butler School, address every need of the member/owner. There are three styles of residences - studios, one- and two-bedroom residences - all with deeply carved crown molding and wainscoting, crystal chandeliers and ten-foot high ceilings. The pricing for both clubs range between $350,000 and $700,000 per 1/11th to 1/13 shares.
The Ritz-Carlton Club is a deeded fractional ownership real estate offering, combining the benefits of second home ownership with personalized Ritz Carlton services and amenities. Properties in existence are Aspen Highlands and Bachelor Gulch, Colo.; St. Thomas, U.S.V.I.; San Francisco; and Jupiter Fla. Coming soon are Vail, Colo.; North Lake Tahoe, Calif.; Kapalua Bay, Maui and Kauai Lagoons, Hawaii; and Miami’s South Beach in Fla. Membership prices vary according to location and residence type. Ownership periods are generally 3 to 5 weeks and prices can range from US $144,000 to $850,000 per interest. Ritz-Carlton Club members can exchange a portion of their allocated yearly vacation period with other communities within the club and also enjoy privileged access to Ritz-Carlton hotels.
On April 28, 2009, the Ritz-Carlton announced the launch of their Destination Club, which provides members two equity-based membership programs with varying degrees of access to their portfolio of properties.
For years, the Carneros region of Napa Valley was one of the least developed in the area. With a climate similar to that of Burgundy in France, all it was used for was growing Pinot Noir and Chardonnay grapes. Grapes have been grown in the area since the 1830s, and the first Carneros winery, was built in 1870. The land had a soft, pastoral footprint, marked by hilltop views of the Napa river, neighboring vineyards and views of the Mayacama mountains. The location, equidistant between Napa and Sonoma, is less than an hour from San Francisco.
The Orchard at Carneros is a successful private residence club set in the center of the renowned Carneros Inn Resort. The club also features an exclusive Owners’ Lounge for private wine tastings, parties and receptions, a spacious, state-of-the-art fitness center, an award-winning spa, three distinctive restaurants and a variety of pools, all just steps away from the cottages. Ownership also includes personal concierge service – available to make arrangements prior to arrival and during the member stay for dining reservations, tee-times, personal chefs, pre-arrival grocery shopping, spa appointments, etc. Pricing is in the $300,000 range and up for 1/10 guaranteed time of 21 days. Happily, the club has enjoyed an 81% sales increase since May of 2008.
The Orchard is managed by the PlumpJack Group, which handles all its services and amenities. It is a substantial hospitality brand, founded by San Francisco major Gavin Newsom. PlumpJack’s business enterprises include wine shops, resorts and restaurants throughout northern California. In addition, the Timbers Resorts has taken over the real estate operations at the Orchard. Timbers Resorts specializes in the complete development, sales and marketing of the highest end boutique clubs worldwide, including Castelo di Casole in Tuscany and the Preserve at Botany Bay in St. Thomas.
Accessed via a private mountainside tunnel, Capella Pedregal is comprised of a 66-room Capella Resort and Spa, 38 shared-ownership Capella Residences and 11 private, full-ownership "Casonas." It is also the only luxury hotel and residence resort with immediate proximity to the world-class Cabo Marina where Capella Pedregal offers its owners and guests unprecedented access to a fleet of luxury Viking sport fishers and cruisers at the CP Yacht Club. A 1/9 share in the Capella Pedregal residence club ranges between $490,000 and $560,000, for a three or four bedroom residence.
Amenities at Capella Pedregal include fractional ownership in a luxury Viking yacht at the CP Yacht Club, access to all of the amenities of the Capella Resort and Spa on 24 acres of pristine beachfront land. Resort guests and residents also enjoy amenities including a 10,000-square-foot Sylvia Sepielli-designed signature Auriga spa and wellness center; their own personal concierge; and attendance by Capella’s signature Personal Assistants who are on hand to arrange anything from dining reservations to yacht excursions and access to Cabo’s many attractions.
Capella Hotels and Resorts. founded by Horst Schulze, creator of the Ritz-Carlton luxury brand, is a new hotel brand focused on intuitive service and boutique destination choice. The Capella brand is opening world-class properties in gateway cities and multiple high-profile resort destinations around the world.
The Residences at The Little Nell are an exclusive, member-owned, private residence club located on Aspen Mountain adjacent from the Silver Queen Gondola with direct ski-out, ski-in access. For a 1/8 share, the Residences at The Little Nell in Aspen are now priced at $3,000,000 for a 4 bedroom residence and $1,475,000 for a 3 bedroom residence. Ownership guarantees a minimum of four “planned vacation weeks” each year: two prime winter and two prime summer. Additionally, owners may reserve two “vacation weeks” on a first-come, first-serve basis. The properties are operated and managed by its slopeside neighbor, The Little Nell resort. The pricing has been driven by a variety of factors including the continuing and growing appeal of fractional ownership, the ski-out, ski-in location right at the base of Aspen Mountain and the Mobil Five-Star and AAA Five-Diamond luxury of the Little Nell resort.
The Little Nell has become a brand in itself, as there are also Little Nell Residences under construction in Colorado’s new Snowmass Village. These are wholly owned homes, where some 70 percent of its 30 residences have sold since December 2007. The ski-in/ski-out, two-bedroom at $3.1 million. The brand is looking to expand to Jackson Hole with a 50-unit condominium and hotel project.
Tuesday, January 1, 2008 at 07:05PM NOTE: Internet Explorer users may notice some cropping down the right side of this article. This is a problem with Internet Explorer only, and we are working on getting it fixed. You may wish instead to download the PDF copy of the article below. Safari, Firefox, and Opera users are not affected.
It is a substantial growth consequence of another perfect commercial storm: where the emerging needs of many people appear at the same time as an industry that satisfies these needs. In this case, the need for luxury access and for rebalancing family relationships meets the need for retreat from 24 hour work days in a culture darkened by wars. It is called the luxury fractional industry and it comes at a perfect time. Soon enough, the demand for interest in high end real estate, to 6-10M residences offered by Destination Clubs, access to private jets, fine art, handbags, helicopters, jewelry, yachts, cars or even exotic pets, all generate fractional luxury components.
Fueled by the growing desire for luxury access, the luxury fractional industry has grown four-fold in three years, grossing 513M in 2003 to nearly 2.5B in 2006 (stats from Ragatz Associates, Executive Summary 2006). According to Bloomberg News luxury goods purchases dropped 21% for each affluent consumer in the third quarter of 2007, however; according to Unity Marketing spending on buying and renting experiences gained 11% in the same time period. What does this mean? Are handbags becoming less sought after than a mountain trek to Bhutan? A diamond necklace less attractive than a family excursion to Antarctica? At the moment, yes!
The trend towards the purchase of the experience rather than a distinct product is defined as transumerism. This trend, discussed in Travel Connoisseur Fall 2007, is a natural outgrowth of experiential marketing strategies, where what you feel when using the product transcends the possession and price of the product itself. Detailed below are a few other trends that may become increasingly relevant as this new year reveals the realities of the luxury fractional industry.
Democratizing Luxury
Luxury consumers are an indefinable, almost nebulous population. It is rumored they annually invest abundant resources maintaining their anonymity. Except for the occasional, visible symbols: the car, the home, the Black Card, the symbols of luxury without the essential high net worth, can be democratized to the many, from the few.
Going fractional used to mean buying into a fractional residence or joining a Destination Club where access to multi-million dollar residences would allow for greater high end vacation options. At the end of the day both millionaires and billionaires enjoy the large homes, the concierges, the private chefs, the NetJet cards. The symbol and the reality are becoming enmeshed. From the outside, it looks as if everyone is having a good time. From the inside, it is hard to tell who is more high net worthy. At Bag Borrow or Steal, a online fractional handbag and jewelry enterprise, a vintage ostrich Kelly bag from Hermes costs $816.00 a week, while ad new one, which is wait-listed as of this writing, costs $11,000. Democracy in action.
One Of A Kind Experiences
While this oddly democratizing, limited time luxury access trend is taking shape, another trend is moving in a different direction. Mature affluents are moving toward "one of a kind" experiences. These people seek products, interests and style experiences that are unique and significantly deluxe. One example found in the destination club industry is Exclusive Resorts' Once In A Lifetime Travel Experiences. These escapes are designed for families and couples seeking adventure travel. A few options include biking through the Loire valley, skiing in Patagonia, or mountain trekking in the Himalayan kingdom of Bhutan. (link)
Similarly, Solstice, within the coming year, is opening a residence in the luxury eco-resort of Warapuru, in the Amazon rainforest.
Growing Green Awareness
Joining Solstice in the emerging economy for eco-sustainable living practices is BelleHavens. In 2007 BelleHavens authored the GreenHome Initiative for all the residences in the their club. This initiative aims to consume less energy and to help offset areas in the BelleHavens residences that cannot be reduced. The ideas of recycling, using Compact florescent light blubs, and lowering carbon emissions is an idea that emerged with the members, and was soon adopted by BelleHavens itself.
Quintess, The Leading Residences of The World, has also put sustainable practices in place by joining the Leading Green initiative, with the help of the eco-tourism non-profit organization, Sustainable Travel International. In addition, to promote carbon-neutral travel, Quintess offsets members' energy consumption costs in 60+ global locations by making contributions to renewable energy programs that prevent an equal amount of carbon emissions worldwide.
More than any other luxury travel practice, a journey on a private jet can bring on guilt and remorse by those concerned about polluting our planet, but there is a ray of hope. According to The Helium Report, in 2007 one fractional ownership jet provider, NetJets Europe, announced a major eco-travel initiative requiring all new and existing private jet clients to pay some €4,000 per year to offset their carbon footprints. NetJets also donates a portion of it's proceeds to fund Princeton University's Carbon Mitigation Initiative, an organization which investigates sustainable jet fuel technologies for commercial air and private jet use.
Together, Together
The need for a more substantial, multigenerational community has been fueled by environmental, political and personal anxieties. For the first time since the Industrial Revolution, one can work and be positively reinforced and remunerated for being at work 24/7. And in inverse proportion, there is a growing need for time to be better spent than in the production and consumption. It is the pushmi-pullyu of contemporary life, for which the luxury fractional industry has a powerful antidote: time is the currency of life, and, as such, personal relevance is counted not in how much time it has cost us to produce, but in the time we spend connecting others we care about. Such connectedness can be well-fostered within the context of the family getaway, in picturesque destinations with large, child friendly residences, where families and their friends have gathering places and times and separate, more personal spaces also.
A recent survey of American Express Travel Agents revealed a significant rise in luxury travel among families. 82% wanted high end hotels with kids programs and 56% traveled with Nannies (KWE Marketing Group, 2007). For these reasons, and others, Solstice, and Quintess have both witnessed a rise in multigenerational travel to their properties - where families with children, children's friends, nannies and grandparents all travel together, together. (private correspondence, Ben Addoms and Graham Kos with author)
Concierges, Personal Life Organizers
The most significant Destination and Private Residence Clubs have always had Concierge service while in residence. Quintess/Leading Residences Of the World, were among the first to take this a step further: they designed their OnQ services to follow their members outside the vacation realm. Upon becoming a member of Quintess, he/she receives OnQ Concierge services 24/7, whenever needed. Other clubs have intended to follow suit. These clubs both know that as wealth levels increase, personal service providers are even more needed, to make life planning - whether on or off vacation, easier than ever.
The concierge industry has grown drastically within the past few years. As an example, Quintessentially (no relation to Quintess/Leading Residences of the World Destination Club) is a concierge company in the UK that started out a few years ago, and recently has grown to focus specific comptencies on wine, art, and real estate consultancy. The more affluent the members become, the more these types of organizational services will be needed, wanted and provided by mid-level fractionals to the highest end Destination Clubs. More and more focused services will be acquired by many clubs in the coming years.
Health, Wellness, Age Management
The statistics speak for themselves. There are 80M boomers in the US, someone turns fifty each seven seconds, Over 1/4 of the US population ( 26.8%) are Boomers and they have been 2-10 trillion in liquid assets (all AARP statistics). According to Ragatz Statistics Executive Summary 2006, the average age of the buyer of the shared residence asset is 51. It is no wonder then that the higher end private residence club and destination club residences have either a resort with spa closeby, or a spa on property. Their members expect, use and appreciate these services, and have come to view them more as a necessity than as an amenity. The hotel residence clubs often have their own branded spas; The Remede at St. Regis, the Willow Stream at the Fairmont Heritage Place, are prime examples.
Exclusive Resorts is one of the few destination club that have residences at one of the premiere spas in the country. Miraval Life In Balance, in the Catalina Foothills outside of Tucson, Arizona, is also one of the most popular destinations in the whole coterie of Exclusive Resorts' options. It offers integrative services to enhance a kind of gestalt mindfulness of moment-to-moment living. Included are Ayurvedic treatments, Chi Nei Tsang, and Shiatsu Massage. These and others combine as part of the 100 treatment option schedule.
The new Capella Pedregal, a high end private residence club at Land's End in Cabo San Lucas, Mexico has Auriga, a signature spa and wellness center that includes the tradition of Mexican folk healing. The treatment environment range from treatment pods within the resort area itself, to the Curandera's (the healer's) cottage on a hill above the resort. Often, these services are inspired by the phases of the moon, and encourage guests to attune their wellness routine to nature's ebb and flow.
2008, bellehavens, capella, exclusive_resorts, industry, kimedia, netjets, quintess, solstice, transumerism 
