Thursday, April 17, 2014

Vacation properties need to be marketed to poorer buyers for sector to rebound

A recovery in the resort real-estate sector will depend on the ability of developers to connect with a less wealthy buyer than they targeted before the recession and cater to the values of multiple generations, a panel at the Urban Land Institute’s spring conference heard Friday.
“We can’t be selling forever to this very narrow segment of the upper echelon of the marketplace,” said panelist Ed Romanowski, CEO of Calgary-based Bellstar Hotels & Resorts. “It just won’t sustain itself.”
Marketing was a major focus, as panelists talked a lot about the amenities resorts need to develop in order to attract different visitor types. “Vacation warriors,” for example, want boot camps and other workout options during a stay, according to Greg Ashley, chief strategy officer at Vancouver-based Replay Resorts.
And in the debate over whether — in the words of a recent news headline — cycling has become the new golf, Ashley countered that “farming is the new golf.”
All of Replay’s properties have some component of growing the food that its guests are eating because “more and more people want to get their hands dirty.”
Figuring out how to sell to Generation Y is important because they are a huge emerging market — there are 50 million in the U.S. and five million in Canada, said Richard Sonntag, managing director of the Promontory resort outside Park City, Utah.
However, he sees a certain tone being set by so-called “BoBos” — bourgeois-bohemian boomers who want to gather their Gen-Y children and grandchildren around them to share the values they’ve developed around conservation and the environment in a setting where each generational segment has something that they want to do.
Romanowski brought the session back to the financial values and the need to broaden the appeal of resort communities to more middle-income buyers.
Canadian recreational real estate was particularly hard hit during the 2009 economic downturn, with a lot of bankruptcies among developers and collapsing property values that have yet to recover.
Romanowski said prices for recreational property are hovering around $250 to $300 per square foot for already built units, compared with the $550 to $600 per square foot they could have commanded before the recession.
“I think there are way too many communities designed around $1-million plus homes,” Romanowski said.

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