Resort Financing

Written by Diane Sievert
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Resort financing is an integral part of resort development. Before investing in a new project, you need to have some idea of what your costs will be. The following guide is a detailed analysis of the costs required when building a fractional resort.

Guide to Fractional Resort Financing

The first and most obvious cost is land. Since fractional resorts appeal to consumers whose income averages out to be around $300,000 a year, traditionally exclusive vacation locales are most profitable. The land in these types of areas (think Aspen, St. Bart's, etc.) is very expensive and will require a large investment.

The second step to resort financing is determining construction expenses. Since fractionals are luxury units, you'll need to build three and four bedroom units, as well as large common areas. $200 per square foot is an average construction cost, though this can easily be exceeded.

Another aspect of resort financing are the furnishing expenses--furnishing costs generally run somewhere in the vicinity of $30 to $40 per square foot. Those are the expenses to get your resort built and furnished, but it doesn't stop there. Staffing requires an entirely separate budget. There are consultants who can help you set and follow a staffing budget.

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