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The recent bankruptcy filing by Ultimate Escapes, the luxury destination club, provided further evidence of the tumultuous state of the fractional and shared-ownership industry. In an interview during a recent conference in Miami, Fractional Life founder Piers Brown discussed the status of the industry and the value proposition for fractionals in a rocky market.

Ultimate Escapes, one of the largest luxury destination clubs in the world, filed for bankruptcy last week, the latest blow to the struggling residence exchange industry.  

In a court filing, Florida-based Ultimate listed assets of $10 million to $50 million and debts ranging from $100 million to $500 million. Earlier this month chief executive Jim Tousignant told members the travel company was in default of a $90 million loan, Bloomberg reported.

MIAMI--After two years of slumping sales, fractional executives this week called for a more aggressive approach to marketing shared-ownership plans to wary second home buyers.

“The consumer is still in a recessionary mindset,” said Piers Brown, founder of Fractional Life, which sponsored the Fractional Summit, an industry conference in Miami this week.

“We need to reassess our outlook and how we energize consumers in exceptional times,” Brown said.

According to conventional wisdom, the fractional model would benefit in the market downturn, as buyers looked for less expensive ways to buy property.

Instead, fractional sales in North America dropped 44 percent in 2009, according to industry analyst Dick Ragatz. While 18 projects were launched in 2009, 35 closed due to lack of financing or sales, he reports.

Citing weak consumer interest, Marriott International says it won’t invest in any new timeshare developments in the near future.

“We believe that based on the demand trends that we’re seeing right now, that we have adequate inventory to meet those demand trends,” c.f.o. Carl Berquist said in the company’s earnings conference call this week.

An industry bellwether, Marriott is a longtime believer in the timeshare and fractional business. Under the umbrella of several of its luxury brands, including Ritz Carlton, it was rapidly expanding the model, particularly in the Caribbean.