Robert Frank, who writes the Wealth Report for the online Wall Street Journal covered the fractonal yacht program, YachtPlus, and in doing so, comes to the conclusion that fractional programs in general may be caught in ‘no man’s land’.

He raises some good points. For the ultra-rich, fractional programs will not deliver what they want – access to their assets and toys exactly when they want them. And for this group, the cost of the management staff needed to acquire, maintain and sell these assets is insignificant.

And for others that want to use these types of assets infrequently, fractional programs also probably do not make sense. Want to take an important client to the Masters, or impress some old high school buddies? Then charter a plane, and kiss $10-25K goodbye. Want to take the family to the Med for a two week cruise as a calculated bribe to get all the college-age kids back for family vacation? Then charter the mega-yacht and be like Onassis. Want the girl to think you could be the next search engine billionaire? Rent the F430 (that’s a Ferrari, you wannabe).

But there is a consumer group that seems to want something in the “middle” and for vacation real estate, that group seems to be growing quickly. This group wants frequent access (two to ten times per year) to vacation homes that are of consistent size and quality and that are located in interesting and useful places around the world (but not necessarily really exotic). For this demographic, unconnected rooms at 5-star resorts or villa rentals have not worked for a variety of reasons.

But Frank is right to higlight some of the risks, as Helium Report has been doing for nearly two years now. For example, shared useage plans mean that you are sharing use – so you can’t get what you want all the time. Also, as these fractional programs are all relatively new, there is still real financial risk. You could join a program – such as a destination club – that does not grow, so you don’t get access to the all the homes you had hoped. Or even worse, the club goes bankrupt. It’s not surprising that many of the people that have joined these programs would probably consider themselves ‘early adopters’, as these fractional programs have a long way to go before becoming mainstream.

Our advice remains consistent. Spend some time mapping out your own useage patterns – for family vacations, business travel, or even cars. Then look at the alternatives – from owning to renting, and attempt to match the program to your needs. Annual trip to Europe with another family? Try HomeAway or step up to a luxury villa rental. A fractional program, such as a destination club, probably does not make sense for a trip once a year, but it does make sense for other luxury travelers.