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The New Destination Clubs
Danielle Reed April 23, 2007PAGES: 1 2
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Two years ago, when North Carolina family physician Dr. Hank Capps and his wife had their first baby, they discovered staying in hotels was not as much fun as it once was. But traveling had been very important to them in their pre-child era and they weren’t about to give up on it. Instead, they decided on a new vacation option: joining a destination club. For an initial membership deposit and annual dues, the club allowed them to use fully furnished private homes it owned all over the U.S. for 30 days every year. Bonus: the club took care of all the maintenance of the properties and provided the kind of concierge service you’d expect at a five-star hotel.
“The concept of having a second home where you don’t have to sweat the details” of house maintenance, such as lawn and pool care, was ideal, Dr. Capps said. “So far, we’ve been incredibly pleased.”
As family travel has grown in popularity, so have destination clubs, which offer affluent vacationers a relatively new way to travel. The major selling point: destination clubs offer both the space and privacy of private homes as well as all the services that come with staying at a luxury resort.
See our slideshow of the new destination clubs.
Unlike fractional residences or timeshares, destination clubs for the most part do not give members an ownership stake in real estate (though there are a couple of exceptions to this rule, including BelleHavens, the club Dr. Capps joined). Rather, the typical destination club is structured more like a country club, with members on average paying anywhere from $200,000 to $400,000 in the form of a membership deposit (usually 80% refundable), and annual dues that range from around $15,000 to $30,000 on top of that. This sizeable investment allows the use of whatever properties the club owns for a set number of days in a year, with locations from the Bahamas to Tuscany. Clubs typically offer concierge services such as stocking the fridge, housecleaning and helping with travel arrangements.
The industry was launched in 1998, with a company called Private Retreats that is no longer in existence (more on that later). Now there are more than 20 clubs, according to industry consulting firm Helium Report. The largest club by far is Exclusive Resorts — chaired by America Online co-founder Steve Case — which boasts about 2,500 members and more than 300 properties, for about a 65 percent share of the destination club market. The membership fee to join Exclusive Resorts is $475,000, and annual dues are $27,500. The second-largest club, Ultimate Resorts, has 775 members and 105 homes in 26 locations (membership deposit $215,000; annual dues $22,000).
There are a handful of clubs that focus on travelers with a particular interest, such as fly-fishing or golf. And there are some super-luxury clubs with a very limited membership and only a handful of homes. One example: Solstice, with 9 homes (plus one under construction) with an average value of $6 million, and a membership of deposit of $875,000 plus annual dues of $42,000.
On the lower end, there is High Country Club, geared to a less affluent membership. It costs $50,000 to join with annual dues of $8,400 and currently has 222 members.
See our slideshow of the new destination clubs.
Given that one of the least expensive clubs still costs $50,000 to join, it’s clear the destination club product is aimed at travelers with the means to vacation in style. Most often, the destination club member is the same consumer who would typically stay in a luxury hotel for the convenience of all the resort services but is more comfortable staying in a three- to five-bedroom home.
Myla Lapoll, a mother of six based in Los Altos Hills, Calif., says she and her husband decided to join Exclusive Resorts at the end of January because the club’s homes were big enough for them to stay in as a family. “In hotels, we are always in two rooms,” she said, “and the suites are not big enough to allow us to have the family under one roof.” But considering all the shuttling back and forth she has to do when she’s not on vacation, she didn’t want to give up the hotel services. “It makes it so much nicer when someone else is helping with the legwork.”
For families who are really likely to use the month or six weeks of time they can expect from many destination clubs (there are several that offer unlimited use options), they may even be able to save money compared with the cost of staying in a five-star resort. For a luxury destination club, the cost per night —based on annual dues—would typically work out to about $1,600 for a three-to-five bedroom home, said Greg Shove, chief executive of Helium Report. Booking a 3-bedroom suite at Las Ventanas in Cabo San Lucas, would cost about $4,000 a night, he said, while a three-bedroom suite at The Peaks in Telluride, Colo., would run about $2,700 a night. More...
See our slideshow of the new destination clubs.
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