34 THE MORAKOT ISLAND PRIVATE RESIDENCE CLUB OWNERSHIP STRUCTURE Overall Structure Morakot Island will offer both fractional and whole ownerships in each of the unit types (see Figure 10). This will maximize the potential market by increasing owner options. Moreover, the range of product in Morakot, from hotel rooms, to apartments, to bungalows and to villas, enables the offering of a spectrum of products to suit the desires of specific buyers, enabling cross-selling which can expedite sales. Morakot project offer a hotel operation available for hotel renters, which will generate ongoing cash flow. The Fractional Model The fractional model is especially suitable to Morakot Island. Morakot andCambodia are relatively new real estate markets. The fractional model enables buyers to experience Morakot at a lower price point, which is significant in the case of a new and relatively unproven market. The fractional model has proven its success in emerging markets such as Cambodia. Number of Owners per Unit Our projections reflect 12 owners per unit. This number was chosen because it is similar to the number of actual vacation weeks generally utilized. To use a small number would detract from the appeal of the fractional model because it would be more akin to whole ownership. To use a larger number would send a message of «timesharing» to the prospective buyer, which would not be appropriate. The Reservation System We will incorporate a rotation reservation system in which prior to each season, owners will notify management of their first, second and third choice for use of their unit. Owners who received their first choice in a prior season will move down to number 3; number 2 in the prior season will move up to number 1; and number 3 will move up to number 2. Several owners choose the same week; the week will be awarded on the basis of priority of notice. In the first year, the weeks will be similarly awarded based on the priority of notice. The Registry Collection Morakot project will take full advantage of membership in the Registry Collection, owned by Wyndham Worldwide and which is the world’s largest luxury exchange system for fractional properties with hundreds of projects worldwide. This will enable Morakot owners to have access FIGURE №11. PROJECTED SALES BY TYPE OF THE OWNERSHIP FIGURE №12
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