The model of fractional ownership is evolving. As previously mentioned in our post Destination Clubs vs. Multi-location PRCs, Ritz-Carlton is one of the private residence clubs that is attempting to combine the benefits of fractional ownership with the flexibility of a destination club.

Members purchase the fractional real estate asset with the traditional benefits, including the ability to sell or bequeath the holding. But in this model, members also receive the flexibility of reciprocal-stays at current and future Ritz-Carlton Club destinations.

The company has packaged the offering as The Ritz-Carlton Clubs with offerings co-located at 7 of their luxury properties.

The Member Experience

Scott Spears, an Austin attorney, was one of the first members in the club 5 years ago. Although he had never made a fractional real estate purchase prior to the experience, he had been a guest at the St. Thomas Ritz-Carlton and his appreciation of it spurred him to dive in.

The price of an interest ranges from about US$150,000 to $550,000 (depending on location and residence type) plus an annual fee. That interest guarantees the owner between 21 and 35 days per year at their property, which includes twice-daily service during their stay and may include other amenities, including meals, depending on the Club location and offerings.

Spears eventually bought one interest in a suite that included meal service and another in a residence that was more of a traditional condo. He used the properties for both business and pleasure. “I’ve brought innumerable clients and friends down there,” he relates. “It’s a place I’m really proud of.” In fact, he adds, “I’ve traveled with others who really fell in love with the program, too.”

What about the new option of reciprocal stays? Does it add value? According to Spears, definitely. He took the family for a Thanksgiving holiday to the Aspen property. “It was incredible,” Spears says.

Recommending the property, he says “It’s never going to be worth less than you paid for it.” Spears should know, he recently sold one of his interests.

But this was not due to waning enthusiasm. After 5 years, Spears is as invested as ever – sitting on the Board for the St. Thomas Club and providing a testimonial on its website.

Spears strongly recommends the Ritz-Carlton St. Thomas. He especially noted the property for the quality of service and the impeccable facilities. “Nothing could be improved,” he claims. “It is (Ritz-Carlton’s) crown jewel.”

We will do more research into the issue of using fractonal time at other locations – either within a single brand network, such as the Ritz-Carlton Club, or in one of the cross-brand networks, like the Registry Collection. Our suspicion is that it’s not always that easy to get access to different homes when you want, but that could be changing as more properties are developed and added to these networks.