Industry Report: Brazil Fractional Market
By Osvaldo Chudnobsky on February 17, 2020
Brazil has become one of the leading countries in terms of ‘fractional’ ownership in the hospitality industry. With a large domestic market discovering the benefits of this sector and a growing number of new projects, the multi-ownership business is changing the real estate tourism business’ face. Luxury local brand, Fasano and international brands, Hard Rock and Wyndham are the most significant, sponsoring very significant projects in the region.
Fractional ownership launched in 2013 on the back of the failure of time-share. Multi-ownership, fractional or fractional ownership is the structure in which different buyers, the “multi-owners”, acquire fractions of a single real estate asset. Options for the acquisition of the multi-ownership assets such as long-term financing, flexible payments means, and the possibility of interchanging with existing properties, have quickly consolidated this system as the most successful mechanism to develop tourism properties in Brazil.
In 2020, almost 11,000 new rooms will form part of the fractional ownership system, equating to nearly 6 billion dollars. The fractional industry is now in 17 of the 27 states of Brazil, as shown in the “2019 Multi-Ownership Properties Scenario in Brazil” issued by the prestigious Brazilian firm, Caio Calfat Real Estate Consulting.
The Future is Fractional!
Many kinds of new projects are being launched and several international brands are interested in entering into this new segment of the tourism business. It is forecast to achieve the 20,000 rooms within a couple of years with at least four leading international brands active in the segment. Brazilians love a mechanism that allows them to buy simply with long-term financing, provides properties deeds and allow interchanging with other destinations. The future of Brazilian (and surely South American) vacations is fractional!