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Second Homes With
All the Amenities of a Luxury Hotel

Private Residence Clubs & Fractional Ownership
Offer an Appealing Lifestyle

Being pampered is a part of the resort experience for many vacationers. Impeccable service is what often leads them back to top hotels again and again.

Those who prefer a private residence in their getaway locations can choose from an array of housing options. But they’ll have to make their own dinner reservations and contact the plumber themselves.

But what if you could own a private second home in those beach and mountain locales and still be treated as if you were at the Ritz? That’s the idea behind residence clubs, one of the fastest-growing segments of the vacation-home business and one that hotel operators — including Ritz-Carlton — have embraced.

“We’re selling a lifestyle along with the house,” said Alan Fuerstman, chief executive of Montage Hotel & Resorts, which is building 14 villas and offering 14 additional home sites at its Montage Resort & Spa in Laguna Beach, Calif. “You can get room service, use of the spa and pool, and have our chef coming over to do a dinner party for you.”

Those home sites, some of the last oceanfront property available in Southern California, don’t come cheap: $4.5 million to $6.5 million for the lot alone. (Nine of the 14 are still for sale; the 3,000-square-foot villas are sold out.) But they represent a way for resort developers to make their high-cost projects more economically feasible, one of the reasons the concept has become more popular.

“We’re in the process of putting together a development in the [California] mountains, and we see this working wonderfully there,” Fuerstman said.  These buyers are younger than we would initially have thought. But what we find is that the buyer who falls in love with these properties has stayed in the hotel once or twice and wants to embrace that lifestyle, capture it on a daily basis,” he said.

The Residences at Montage represents the latest in the evolution of the hotel industry in the second-home market. The villas and home sites at the Laguna Beach property are being sold outright to buyers, not as time-share or fractional-ownership units.

It has been 20 years since Marriott became the first major hotel chain to enter the vacation-ownership business with its purchase of American Resorts. That initial foray involved time-shares that were sold as a right to use a condominium unit for a specified time, generally one week of the year.


Marriott still operates two brands that sell traditional time-shares: Marriott Vacation Club International and the more moderately priced Horizons by Marriott Vacation Club. Owners are able to trade weeks in order to vacation in a large number of destinations.

In 2001, Marriott added its Grand Residence Club concept. The first club opened in Lake Tahoe, Calif., in 2002 and the second in London last year. The clubs combine fractional ownership of a second home with the amenities and service of a luxury resort. Fractions from three weeks to 13 weeks range from $83,900 to $550,000.

The hotel company also operates the Ritz-Carlton Club, another fractional-ownership product where buyers can purchase interests from 21 to 35 days per year for $98,000 to $490,000. Ritz-Carlton Club resorts are located in Aspen and Bachelor Gulch, Colo., St. Thomas and Jupiter, Fla.

In addition, the Residences at the Ritz-Carlton offers for-sale condominiums at 11 U.S., Caribbean and European destinations that provide concierge, dining and butler services.

Four Seasons

High-end hotelier Four Seasons also has been developing private residence clubs. It has fractional-ownership properties in North San Diego, Calif.; Scottsdale, Ariz.; Jackson Hole, Wyo.; and Punta Mita, Mexico, near Puerto Vallarta, which is under development.

And Hyatt Vacation Ownership, an affiliate of Chicago-based Hyatt Hotels, has broken ground in San Antonio, Texas, on what will be its 11th vacation ownership property; eight are open and two others are slated to open this summer.

Exclusive Resorts

Not all the hotel-type developments involve hotels, though. Exclusive Resorts, founded by Brad Handler, a member of eBay’s startup team, offers a collection of luxury vacation homes that members have access to. The company has more than 200 homes in 25 locations worldwide, with 12 additional sites planned.

The homes average about $2 million, but members pay a one-time deposit of $375,000 to join, plus yearly dues that the company describes as “modest.” Exclusive Resorts’ members can use a member-services manager to make travel arrangements and have access to an on-site concierge in their destination.

Members can also take advantage of Exclusive Resorts’ strategic partnership with Marquis Jet, which provides access to the NetJets private jet fleet.

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