About the last thing that Scott and Mary Smith expected when they reserved a $450-a-night luxury guesthouse for a December holiday fling in Beaver Creek, Colo., was the Ski Rental from Hell. "We walked through the front door and had the shock of our lives," says Scott. "It looked like a $700-a-month apartment. It was old and beat-up, it had shag carpeting, and it was full of undesirable furniture."
That was two winters ago. Today when the Smiths, professionals in their early 40s who live in Atlanta, head to Beaver Creek, they pull up to the front door of The Ritz-Carlton Club at Bachelor Gulch and know exactly what they're getting. The valet is there to unload their luggage, the bellman greets them by name when they check in, and a richly appointed two-bedroom suite-brimming with upscale appliances and electronics-is waiting for them. When the Smiths head to the lifts in the morning, another valet hands them their skis, which are kept in storage between visits. A concierge has booked afternoon spa treatments and made dinner reservations. For the Smiths, the Club represents a sure thing in a world of often dicey vacation rentals. "There's no guesswork at this place," says Mary. "We can just relax and enjoy ourselves."
The Smiths were among the first people to buy a fractional ownership unit at The Ritz-Carlton's third residence club, which opened in 2002. Memberships consist of one-twelfth interests, which entitle buyers to three weeks a year, and are priced from $195,000 to $490,000, depending on the suite. In addition,owners pay around $10,000 in annual fees. But the Smiths get plenty of extras with their membership, including lift tickets, half-price rounds of golf at Red Sky Ranch Country Club nearby and discounts at Ritz-Carlton hotels worldwide. Scott says the numbers made fractional ownership an appealing alternative. "The least expensive places in Vail Valley that met our criteria were around $600,000," he says. "Then we'd have to add property taxes, maintenance fees, furnishings and the ongoing costs of upkeep. That kind of investment isn't worthwhile for us."
More skiers are reaching the same conclusion, particularly as the elite brands of the hospitality business-including Ritz-Carlton, Marriott and Four Seasons-work to lend new luster to the once-tainted timeshare concept. Dick Ragatz, president of Ragatz Associates, a resort research and consulting company in Eugene, Ore., says it's absolutely the luxury market that's driving the current boom. "In a very short time, private residence clubs and high-end fractionals have taken over the market," he says. Of the half-billion dollars generated worldwide last year from sales of fractional interests, he adds, more than four-fifths came from residence clubs, representing a 38 percent growth over the previous year. There are now approximately 132 fractional-interest resorts in the United States, and almost half are located at ski destinations. Colorado alone has 27.
Luxury hoteliers are leveraging their brand identities to generate sales. And they've created a new business model: the all-in-one resort that combines a hotel, a residence club and a few whole-ownership penthouses. At Bachelor Gulch, for instance, a full-service hotel adjoins the 54 residences of The Ritz-Carlton Club, and all of the hotel's amenities, including restaurants, shops, swimming pool and spa, are available to club members. "This was a breakthrough for us-the first opportunity to design a club and a hotel together-and the configuration has worked so well that it's now the bull's-eye of our growth strategy," says Bob Phillips, senior vice president of business development for The Ritz-Carlton Club.
In a similar vein, the Four Seasons Resort that opened last fall at Teton Village in Jackson Hole, Wyo., consists of a 124-room hotel, a Four Seasons Residence Club with two- and three-bedroom shared-ownership units, and 17 private residence condominiums. Project director Ken Mason says the resort launched its fractional program with one-seventh interests, but has now added a one-fourteenth share (which works out to 14 nights a year, with an extra week every other year) because of demand for shorter intervals.
The timeshare business is also leaping into another relatively new model-shared ownership of detached, single-family homes. While ski-area realtors have been patching together makeshift deals among three or four families for years, East West Partners of Colorado has launched Old Greenwood in California near Lake Tahoe. Old Greenwood has a Jack Nicklaus Signature Golf Course and is close to the Northstar-at-Tahoe resort. Other ski areas, including Squaw Valley and Alpine Meadows, are 15 to 20 minutes away.
Old Greenwood includes custom home sites, townhouses, a clubhouse for the golf course and a swimming pool and fitness center, as well as luxury "cabins" that are being sold as fractionals, with 17 owners per building. Actually three- and four-bedroom chalets, the cabins are outfitted with such amenities as plasma TVs, pool tables, stainless steel kitchen appliances and private outdoor spas. Pricing is based on the specific week of the year an owner designates as the "primary use" week, though all owners are entitled to at least 21 days of use each year. Fractionals with winter primary weeks range from about $110,000 for a three-bedroom, 2,470-square-foot cabin, to $175,000 for a four-bedroom, 3,000-square-foot layout, with annual dues of $3,000 to $5,000. Of course, offers project manager Bill Fiveash gamely, "you can always buy two shares if you want more time."