Vacation Resort Fractional Ownership

Written by Diane Sievert
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Vacation resort fractional ownership is a tricky business when it comes to making a profit. Use the same pricing techniques as time share management companies, and you'll find yourself in a quandary. Though fractional and time shares share similar conceptual aspects, they ultimately differ quite a bit when it comes to development, sales and upkeep.

How to Successfully Sell Vacation Resort Fractional Ownership

Since time shares are far less luxurious, the construction costs are much less expensive. Most time share construction costs constitute about 25 percent of sales volume. Sales and marketing costs take up another 45 percent, while general management expenses (administrative and maintenance costs) average about 10 percent.

Vacation resort fractional ownership is an entirely different beast. The sales price of most fractionals is overwhelmingly consumed by product costs. Generally, 55 percent of the sales price is devoted to product costs.

With such high product costs, it can be difficult to make a profit in the vacation resort fractional ownership business. To make a notable profit, you have to keep sales, marketing, and administrative costs down. Keeping these other costs around 20 or 25 percent is the only way to ensure a return.

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