2010 will be a defining year for fractional ownership, with clear tiers of product provision and profitable opportunities for developers striking strategic partnerships.

2010 will be a game changer for fractional interest development - Nick Turner

Nick Turner, vice president of business development, The Registry Collection, Europe, suggested 2010 will see three tiers of fractional ownership in Europe as the market matures and the product "becomes the most common model to offer high value and low cost and risk."

Turner explained:

1. Budget Fractional ($30,000 to $60,000): "Sold in small fractions of 2-3 weeks in both emerging markets such as Turkey and Egypt and markets suffering from oversupply such as the Spanish Costas and Dubai."
2. Mid Market Fractional ($60,000 to $120,000): "Sold in 4-6 week fractions in small low-density mixed use developments in traditional second home hot spots such as Cyprus , UK, Portugal, Greece and the Adriatic Coast. These products will have a good range of facilities and a competitive annual service charge."
3. High End Fraction and Private Residence Clubs ($120,000 to $300,000): "Sold in 4 weeks-plus in the most desirable locations in Europe such as London, Paris, Tuscany, Provence, the Cote d'Azur and other AAA high-end tourism locations. With the emphasis on exclusivity and luxury, these small intimate destinations will not only offer an extensive range of facilities but high quality service experience to match."

Crucial to the success of each model will be a carefully planned sales strategy, legal framework and supporting exchange system, such as The Registry Collection.

Turner added: "A robust legal structure needs to be in place with provision for the owners to exit the project if needed.

"Each property needs a dedicated fractional exchange service to broaden the appeal of the fractional product. Finally, and equally importantly, developers must place a strong focus on lead generation through established inhouse databases and external leads generated through specialist brokers, rental programs and inbound exchange guests."