Destination Clubs Defined
Thursday, March 12, 2009 at 03:11PM WHAT IT IS
Since its inception in the mid 90's, the Destination Club industry has offered affluent families a broad portfolio of luxury private residences in resort areas around the world. In addition, club members enjoy amenities that include dedicated concierges, exceptional furnishings, once-in-a-lifetime experiences, and ample space at each residence; flexible use and reservation plans allowing access to club residences, without the problems of exchanges, points or bidding; a refund on all or most of the upfront deposit associated with joining the club when the member wished to resign.
There are two types of destination clubs:
1. Non-equity based, meaning you pay the membership deposit and annual dues, and go enjoy yourself,
2. Equity (component), where, for your membership deposit, you buy shares or deeds in the club itself.
(a third Villa Rental/Hybrid/Destination Club model is emerging..)
WHAT IT ISN'T
It isn't a timeshare, though it is a distant cousin. Timeshares do not provide luxury amenities, or, in general, are in extremely high end destinations. It also isn't a high end fractional or Private Residence Club, as they generally sell partial ownership deeds to the residences.
HOW MUCH IS IT?
A wide range - the lower end Destination Club memberships range from $50,000 up, the highest end (Solstice), as of December 1 to $2.175M. The time allotted for such pricing ranges from two weeks to three months, and more, space available.
THE PLAYERS
DISCLAIMER: Some of companies listed below are in some form of bankruptcy protection. Please contact the club for details.
The Highest end:
Solstice - $615,000 to $1.975M. prices increased Dec 2008. Rumors of bankruptcy pending.)
Everlands - $1M for all. (Rumors of bankruptcy as Lehman was lead investor and now no funds.)
Europe:
The Oyster Circle - Euro 330,000 to 400,000
The Hideaways Club - Euro 115,000 to 220,000
Hybrid:
The Society - Destination club quality without the membership fees. $1,000 to $10k / night
Exclusive Resorts - $120,000 - $365,000 membership fee + dues
Quintess - $210,000 - $895,000
The LUSSO Collection - $325,000 - $425,000
Distinctive Holiday Homes - $59,000 - $499,000
Ultimate Escapes - Three membership plans, range from $125,000 - $450,000.
Abercrombie & Kent Residence Club - $225,000 to $495,000
High Country Club - $30,000 to $80,000
TOP DESTINATIONS
Aspen | London | Paris | Florence | New York | San Francisco | Napa Valley | Tuscany | Deer Valley, Utah | Scottsdale, AZ
QUESTIONS TO ASK
- What assurances can you provide that your club has enough assets (e.g. home equity, bond, or cash) to be able to redeem my membership deposit refund at any time?
- How can the club demonstrate this?
- What percentage of your members resigned last year? In the past year, how long, on average, have members waited to receive their refund? Is the time frame inside or outside of the contractual obligation?
- What is the current average appraised value of a club home? What future purchase plans can be shown to me? Where will 2009 homes be purchased?
- What system does the club use for holiday and peak period reservations?
- How does the club ensure there is enough accessibility for members to travel on short notice?
- What is the ratio of member to residence?
- Can I visit a home before joining?
- What additional services are provided by the club and included in the annual dues? What services aren't provided?
- When I will know if annual dues will be increased?
- Are there any extra fees or changes beyond the annual dues that I should be aware of?
THE FINAL WORD
- Make sure you have your attorney look over the contract
- If at all possible, speak to the company CEO
- Be sure of the fiscal transparency of the club and how it relates to your membership deposit refund
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