A new report into the vacation ownership market in Brazil says the country “is poised for rapid and long-term growth for many years”. The study undertaken by Sarah Rezak, Associate Consultant of Luxury Leisure Properties International was unveiled at the recent SASOIC shared ownership conference in Rio de Janeiro.

Brazil is the world’s fifth largest country according to population numbers, and has the world's 10th biggest economy, with a rapidly growing middle class which is keen to embrace vacation ownership – and particularly fractional ownership – in a variety of forms.

Among the report's key findings were:
•The vacation ownership industry has existed in Brazil since 1986. During the first 10 years of the industry’s existence in Brazil, the public image of the product was damaged by an unregulated environment, member maintenance fee burdens, and overly aggressive marketing and sales practices. With the introduction of timeshare regulation in 1997, the product and its public perception improved tremendously. In recent years the introduction of the fractional ownership concept into the Brazilian marketplace is providing a new area of growth and opportunity in the industry.

• During a global recession Brazilian vacation ownership continued to build momentum and grow more rapidly. RCI membership grew by 107% during the past five years to 26,900. At the same time, vacation ownership weeks sold experienced 38% year‐over‐year growth in 2007, 52% year‐over‐year growth in 2008, and a record 61% year‐over‐year growth in 2009.

• There are currently over 110 vacation ownership properties and 37 sales offices in Brazil. During 2009, an estimated 14,371 weeks were sold representing an estimated sales volume of BRL 300 million.

• There are an estimated 59.8 million households able to afford vacation ownership products in the country, and currently an estimated 50,000 households that do. This represents a current penetration rate among households that can afford the product of approximately 8/100ths of one per cent. Conservatively assuming that households in class A1 are eligible to purchase fractional ownership, the current penetration rate among those who can afford it is 1/10 of 1%. It is probably more likely that the full class A segment of households can afford to purchase fractional ownership – meaning 4.2 million Brazilian households.

• In the coming years, if the market penetration rate for various vacation ownership products grew to 1% among Brazilian socio‐economic classes A, B, and C, there would be 598,000 vacation ownership members in the country. Assuming an average sales price of BRL 15,000, this market penetration would generate almost BRL 9.0 billion. It will take many years to reach this penetration rate, but considering the data included in this report, it is certainly reasonable to look forward to this kind of growth in Brazil.

Luca Franco, president of Luxury Leisure Properties International, who commissioned the report, said: “We realised the huge potential for fractional ownership in Brazil, and we are very committed to supporting the growth that will occur both in Brazil and in South America generally. Brazil now has political stability, state investment in infrastructure and significant foreign investment. These, combined with the football World Cup and Olympics in the pipeline and a growing middle class all point to almost unlimited growth for fractional ownership real estate, which at the moment is a newborn baby in Brazil. There are currently three developments which just four completed units for sale.”

The SASOIC conference itself was a well-attended and positive event. Fractional Life founder Piers Brown said: “There was a complete mix of delegates from around the world – Argentina, Brazil, Uruguay, Puerto Rico, Mexico, Columbia, Costa Rica USA, UK and from various shared ownership industries including hotel, timeshare and fractional real estate professionals. It made for some great networking and everybody was enjoying themselves. The conference ended on a high with a panel session on marketing and sales for fractionals and luxury properties. The closing address summarised what everybody had learnt and emphasised the huge potential for vacation ownership real estate in the region as Brazil looks forward to the World Cup and Olympics within the next six years.”

Source: http://www.fractionallife.com/