The luxury accommodation market is becoming more than a little complicated these days, with categories invented regularly and terminology introduced frequently. Here’s the Luxury Reporter clarification of the terms most likely to confuse:

Timeshare
The concept is familiar to most people, as is the high-pressure sales pitch. Timeshares allow owners to use a single property for a set period of time every year. The level of service is generally far below that offered by destination clubs and private residence clubs, and the same goes for the properties. There may also be ownership differences, but this varies by club.

Fractional ownership
This is a simple concept - rather than owning 100% of an asset that you’ll only use for a small part of the year, why not own a smaller part of that asset and share the capital expenditure and maintenance costs? The projects referred to as ‘fractionals’ are generally a single home that has been divided into a number of fractions, their use governed by a simple agreement and booking mechanism. Common fraction sizes are 1/8th, 1/12th and 1/16th. This model is used for real estate, cars, yachts and the like.

Private residence clubs
Here’s the thing - private residence clubs are a type of fractional real estate ownership. They’re not really ‘different’, just a special subset with larger homes, higher levels of service, and a larger price tag. As with other fractional developments, they include a single property.

Destination clubs
There are several types of destination clubs out there now, but the most common model has a portfolio of properties that are owned by the club (an important distinction, as in fractional ownership the members / owners own the real estate) and made available to its members. Properties are usually sprinkled around the globe, or at least around North America, and the homes are generally large and very well serviced. Some clubs do offer equity ownership in the real estate, blurring the lines a little, but the other key difference - multiple vs single properties - remains.

OTHER ARTICLES THAT MAY BE OF INTEREST

• Destination clubs - an overview
• Fractional car ownership
• Fractional jet ownership
• Tanner and Haley acquisition
• LUSSO member survey