One of the obvious appeals of destination clubs is the ability to book homes across many destinations – so far about 4500 families have decided that this club membership model works for them – knowing that they do not own any part of the real estate.

We have profiled some variations on the basic model – in particular BelleHavens, a club that offers its members debt-free asset ownership as security for their deposit, and Crescendo, which is essentially a REIT that buys and operates houses for the use of its investors.

Now we are learning of several new Private Residence Club developers that are attempting to combine the concept of fractional ownership, along with access to multiple residences or locations, to try to offer the variety that destination clubs do. Established players, such as the Ritz-Carlton Club have developed several locations and allow their owners to exchange time at other properties. Now several start-ups are focussing on offering fractional ownership in one property, that can be used across many locations:

• San Talini is a new multi-location PRC, with two homes open, and a plan to have 6-12 by the end of 2007.

• Boutique Club International, started by veterans of the high-end timeshare business, sells fractions in specific locations, based on a points system, and then allows owners to use those points for other locations.

We will profile both these firms soon. At least the initial implication for prospective buyers is that the fractional industry is attempting to respond to what we think is one of the strongest selling points of destination clubs – variety of locations. BUT, the system that these multi-unit PRC’s employ for sharing these homes (such as points) needs scrutiny so you are comfortable that it works for you. Also, we think that the PRC developers will also have to work hard to demonstrate that there will be a secondary market for owners to resell their fractions – so that the benefit of ownership is not just the security, but the liquidity of that asset. If they can demonstrate that, then clearly their model could have some real appeal to those who want to be “owner” not “members”.