Hearing Pat Storms talk about buying a rustic old fishing lodge near Bon Echo Provincial Park, it's hard not to think of the Klondike.
"As soon as I saw the property, I thought, 'This is gold,'" says Ms. Storms, recalling the 2,000-foot pristine shoreline on spring-fed Mississagagon Lake.
"It had so much potential, even with the old cabins and trailers on it," the former Bell Canada manager says, explaining why she and her husband, Dave, a former electrical/plumbing wholesaler, purchased the 17-1/2-acre Twin Pine Resort in 1996 for $550,000.
After running the lodge for seven summers, the Stormses redeveloped the land as a $20-million, 34-unit fractional-ownership resort called Frontenac Shores.
Driven in part by the rising cost of waterfront cottages, fractional ownership grew by 8.3 per cent in North America in 2007, according to resort industry consultant Richard Ragatz.
Of the 55 fractional-ownership properties he cites in Canada, almost 60 per cent are actively selling.
"The demand is going through the roof," says Ross Perlmutter, executive director of the Canadian Resort Development Association, which oversees fractional-ownership resorts, as well as vacation clubs, timeshares and condo hotels.
So much so, he says, that many baby boomers are buying multiple fractional ownerships along beachfronts, golf courses, wineries and ski resorts across North America.
"We're finding people sort of cherry-pick experiences for their 'lifestyle portfolio,' as I like to call it."
At the other end of the equation are the property owners - many who have inherited cottage resorts with limited business cycles but that have been in their family for generations.
"They're now looking at the fact that they're sitting on a magnificent piece of land," Mr. Perlmutter says. "And to them it's their opportunity to finally cash out."
According to Resorts of Ontario, a non-profit association of 140 resorts and inns, the number of privately owned resorts in the province has decreased by 10 to 15 per cent in the past 65 years, though some, like Muskoka's Bayview Wildwood Resort, have added fractional-ownership cottages adjacent to their existing lodges.
Ms. Storms says traditional cottage resorts, with their "peaks and valleys" seasonal business model are "becoming a dying breed because [they're]not really profitable." Over the past 12 years, she has also seen the trend toward convenience and higher-end features. "It's what people expect for their vacation. We're getting spoiled."
To that end, the Stormses initially considered upgrading the resort with winterized, more luxurious accommodations. But Ms. Storms says, "I wouldn't see a return in my lifetime on my investment."
They also looked at subdividing their property into cottage lots, "but then you do that and you're gone; you don't have a job any more," she says, laughing.
Finally, she explains, "Fractional ownership fell in our laps" after they went to an industry conference in 2003.
Frontenac Shore shares (10 for each cottage) currently fetch between $66,000 and $85,000 for five weeks of use each year in perpetuity (maintenance fees run $2,500 annually), but the Stormses aren't just selling the land. As the resort's property managers, they also keep their jobs. "It's a win-win situation for properties of this kind," Ms. Storms says.
The first phase, which is about 70 per cent sold, features six Confederation Log Homes on 500 feet of waterfront. (Sales of the second phase opened this summer.) The open-concept two- and three-bedroom homes range in size from 1,900 to 2,100 square feet and have great rooms with vaulted ceilings. Some have lofts.
Decorated to create an upscale woodsy feel, the squared-log, white pine timber homes are appointed with Canadian-made Mennonite maple furniture, stainless-steel appliances, granite countertops, flat-screen televisions and high-speed Internet.
"They have it in their homes," says Ms. Storms, "and they want it on their vacations."
The resort appeals to the "the modern-day traveller, the affluent traveller," she says, referring to empty-nesters and baby boomers with disposable income and good equity in their homes, as well as young professionals in their 30s.
To date, none of the "budget vacation type" travellers who used to frequent the fishing lodge each summer have bought into the development. "There are renters and there are owners, and I think that's pretty typical in the vacation industry, period," comments Ms. Storms.
For the renters, the good news is that there are still an abundance of traditional, small family-owned resorts, says Grace Summut, Resorts of Ontario's managing director.
"It's in their blood," she says. "They've really injected their whole personality and flavour into the property, and that's very much characterized by the decor and the experience and the atmosphere at the resort."
Mr. Perlmutter adds, "We're living in a society now where it's all about options. … [People]are looking for culture. They're looking for personal development. And a lot of the time what they're looking for is to recapture a little bit of their childhood. That includes visiting a 60-year-old rustic resort."
Special to The Globe and Mail