Destination Clubs | T+L Family
Published: May 2009
By Eve M. Kahn
It's the no-brainer vacation. Not quite time-shares, not quite fractional-ownership resorts, destination clubs are the latest enticement for flush families
They have the your-wishes-are-our-commands services of the poshest hotels, the sprawling great rooms of a McMansion, and more locales than you can possibly visit in a year. And they’re out to nab families: more than 15 destination clubs have formed of late, attracting some 4,000 members with promises of pads tricked out with prestocked refrigerators, Wi-Fi, and ample supplies of toys and games. "Parents are joining because you get a hotel experience in a house where the kids can run around," says Gregory Shove, a former AOL executive who founded an independent Web site, Helium Report (heliumreport.com), that covers the destination-club phenomenon.
Penny-pinchers need not apply: members pay a onetime, partially or totally reimbursable fee ($30,000 to $1 million up front) plus annual dues ($3,500 to $52,000). Unlike time-shares and fractional-ownership resorts, which give members a limited-ownership interest in a specific property, destination clubs don’t normally grant members ownership in anything; rather, they get access a few weeks a year to concierge-run spreads—a total of 600 worldwide, so far—in blue-chip spots for skiing (Vail, Jackson Hole), swimming (Hawaii, Cabo San Lucas, St.-Tropez), golfing (Scottsdale, Kiawah), or basking in culture (New York, London, Paris).
To help consumers size up the industry, Helium Report offers a 50-page Decision Guide that suggests questions to ask before you sign, ranging from heavy-duty ("What percentage of your members resigned last year?") to softball ("Are sailboats available?"). Larry Mason, an Ohio father of six who is a member of Quintess, consulted the guide to ’’pinpoint clubs to research further and find out how transparent the financials are."
The picture isn’t entirely clear. Some of the smaller clubs have folded or merged with competitors; the oldest, Tanner & Haley (founded in 1998), went bankrupt in July 2006. The industry’s reaction to that high-profile failure: most companies don’t follow Tanner & Haley’s unsustainable practice of promising members any destination, anytime (which necessitated whopping rental fees).
Meanwhile, clubs keep opening and gobbling up real estate, and people are selling their vacation houses to join. You’re membership material, industry analysts say, if you take two to four family trips a year and have a median income of $400,000 and a net worth of more than $3 million. Still interested?Consider the following variables.
Service before and during trips. Months ahead, staffers book flights and babysitters and update grocery lists of everyone’s favorite foods. On arrival, members find baby gates installed, family photos on display, and champagne on ice for frazzled grown-ups. During visits, hosts check in daily.
New or freshly renovated properties. Houses typically have four or five bedrooms, as well as pools, views of sand dunes or snowcapped peaks, and the latest technology. Many clubs standardize décor, AV equipment, even toys—no need to relearn how to use the coffeemaker or the TV remote.
Cost-effectiveness. Destination clubs compare favorably to hotel suites and second homes. "To me, this is a better value than buying a house," says Toronto mother of two Kara Reinish, a member of Ultimate Resort, whose properties are valued at an average of $2 million. "Maintenance and taxes on places like that are much more than the annual dues. Even with the lump payment at the outset, this is still the better deal."
No option to bequeath or sell your membership. And if you resign, you won’t get all your money back.
Crazy Eddie sales pitch. Club agents can be aggressive, and financial statements are confusing. Brace yourself for last-minute offers and warnings of impending price increases.
Location frustration. Clubs tend to build freestanding houses on vacant lots, a rarity in existing neighborhoods, so you’ll likely need to drive to restaurants and stores. And urban apartments may be in touristy areas, such as Times Square—not exactly ideal for discerning travelers.
No guarantees on the house of your dreams. Popular spreads get booked up quickly, especially for school breaks and holiday weeks. And when property values increase dramatically, clubs may cash in. So don’t get too comfy. Raj Kapoor, a Quintess member in Belmont, California, and father of two, loves the club’s house in St. Thomas. "It’s called Pelican Heaven. It’s perched on top of a mountain, and pelicans fly past all day," he says. "I hope Quintess never sells that house—I’d never sell it if it were mine."
Eve M. Kahn writes for House Beautiful and I.D. Magazine.
There are more than 15 U.S.-based clubs, all with toeholds in similar destinations. A few focus on one activity, such as golf or tours of wineries. What varies is membership size and price (which can range widely even within a club, depending on how many vacation days you want). Here, three of the fastest-growing clubs. For others, see heliumreport.com.
Exclusive Resorts exclusiveresorts.com
Headed by AOL cofounder Steve Case, this giant has 2,500 members and 300 properties (with 100 more slated to debut in the next year or so) in 35 locales, including Costa Rica, the French Alps, Florence, and San Francisco. Membership fees: $225,000 to $425,000 plus $12,900 to $29,500 in annual dues.
Quintess, Leading Residences of the World quintess.com
Formed last September from two circa-2004 clubs, it has 300 mem-bers and 51 properties (average value: $4 million) in 27 locations, including Amelia Island, Los Cabos, Aspen, New York, and Paris. Membership fees: $185,000 to $750,000 plus $14,500 to $52,000 in dues.
High Country Club highcountryclub.com
This two-year-old, 225-member club is among the industry’s lowest priced. Many of its 28 houses are in Colorado, with a smattering at golf and ski resorts in California and Tuscany. Up next: expansion to Turks and Caicos, Hilton Head, and Maui. Membership fees: $30,000 to $60,000 plus $3,500 to $9,600 in dues.