Bookended by a precipitous rise to the top of the destination club industry and by a meteoric collapse, High Country Club has announced it will file for Chapter 7 bankruptcy next week.
In a candid letter to the club's members sent last week, Christian Kirschner, High Country Club's CEO wrote:
Effective immediately, High Country Club will no longer be in business. Along with our bankruptcy attorneys, we are in the process of filing Chapter 7 bankruptcy next week.
The severe decline in the economy has made it impossible to operate our business. Our team has worked tirelessly over the past 120 days to restructure and save the business. However, multiplying outside factors and a declining membership has made operations impossible.
Effective immediately all reservations are canceled.
We expect that the bankruptcy court will be in contact with members after our filing next week.
I offer my sincerest apologies and regrets as the current business and economic environment has made it impossible for HCC to operate.
Christian V. Kirschner
President & CEO
High Country Club
Founded as a specialty destination club focused on the affluent ski audience, High Country Club entered the industry as a low cost alternative to the myriad of other more costly destination clubs that dominated the industry. As the sole club in the sub-$50,000 price point, High Country Club soon emerged as a destination club power, consistently meeting sales and revenue goals and serving as a founding member of the Destination Club Association.
The club's ability to generate a continual stream of new sales led to over reaching on real estate, purchasing luxury vacation homes outside of their business model's price range. In their attempt to remain the most cost effective destination club, annual dues, the club's yearly payments made by club members used to pay for the club's ongoing operations, were set below the club's operational burn rate.
As the real estate and financial markets began to decline, so did sales for High Country Club. Often selling upwards of 30 memberships per month, the club's sales initiatives began to yield single digits in the months prior to their bankruptcy.
With club sales eroding and facing financing issues from lenders, High Country Club executives attempted to merge with another destination club, only to have the buyer back out in early October of 2008. In a letter to High Country Club members regarding the destination club merger sent on October 28, Kirschner wrote "I approached several destination clubs and we made a decision to move forward with one. Documents were signed and the integration process had begun. Two and a half weeks ago the deal was terminated due to the difficulties created by the extraordinary economic events of the past 45 days...There was never any doubt in my mind we would not close on this transaction for several reasons...The economic events of the past 45 days changed everything."
With anemic sales and growing debt obligations, High Country Club created a Success Plan that theoretically would allow the club to become self sufficient and operational solely on membership dues. The plan consisted primarily of increased annual dues for members, decreases in properties available to members, and drastic layoffs to High Country Club staff to reduce overhead.
For the plan to succeed, approximately 75 percent of the membership base needed to agree to sign off on new addendums outlining these terms. While the club approached the 75 percent barrier, ultimately it fell just short, leading management to create a new alternative to members, the High Country Club Sustainability Plan.
The Sustainability Plan also failed to create the self sufficient model club executives and members sought.
With High Country Club's upcoming Chapter 7 filing, they join One Key World and Lusso Collection as firms starting 2009 poorly. One Key World and their rental brokerage model was forced to cease operations earlier this month while the Lusso Collection is currently going through Chapter 11 bankruptcy.
Despite Kirschner's immediate closure notice, expect more news about High Country Club to follow as creditors, real estate owners, and members alike continue asking questions about how High Country Club reached this point.
Original Article
High Country Club Files For Chapter 7 Bankruptcy
Thursday, January 29, 2009
Yellowstone Club World Files For Chapter 7 Bankruptcy
Creditors of Yellowstone Club World, a spinoff destination club of the Yellowstone Club, have filed for Chapter 7 bankruptcy liquidation. Filed on behalf of four creditors claiming $4.65 million in refunds for membership deposits to Yellowstone Club World, Angus MacNaughton, Edgar Rainin, and Yoav Rubinstein are each requesting $1.5 million and Thomas Hook is requesting $150,000.
Yellowstone Club World ceased operations last year amid a public ownership battle and divorce of Tim and Edra Blixseth. Edra eventually won ownership of the club and promised to monetize several of the clubs properties.
Envisioned as the most elite destination club in the industry, Tim Blixseth scoured the globe looking for luxury vacation properties for the club's exclusive 150 members. Once comparing the search to "Easter egg hunting," the club included the Chateau de Farcheville in France, the El Tamarindo resort in Mexico, and a private golf club near St. Andrews in Scotland. Designed to charge as much as $10 million to join, the club failed to get off the ground, counting only a select few Yellowstone Club members who upgraded to join. In September of 2008, Yellowstone Club World ceased operations.
In November of 2008, Yellowstone Club, the Montana based resort that preceded Yellowstone Club World, filed for Chapter 11 bankruptcy protection. According to the first court filings, Yellowstone Club cited a combined debt of $344 million and assets of roughly $1.1 billion.
According to John Amsden, a lawyer representing Yellowstone Club World members, at least one of the properties available to Yellowstone Club World members is being used as leverage in the Yellowstone Club Chapter 11 proceedings.
"We're concerned the assets they do have are no longer in control of the Yellowstone Club World," said Amsden. "The involuntary bankruptcy was necessary because it appears that there is no one minding the club's business. We hope that the matter can be resolved with a minimum of expense."
Through the Chapter 7 filing, the creditors seek to find who and what entity controls the properties of Yellowstone Club World.
"The members of the Yellowstone Club World were promised access to very specific and significant properties in return for their significant membership dues. They anticipate that their interests to those properties will be respected," Amsden continued.
Within 20 days, the court will appoint a trustee who will begin to sort through the club's assets.
The Chapter 7 filing puts two destination clubs on the polar opposite of the spectrum in the same boat this week. High Country Club, the most inexpensive destination club in the industry, also filed for Chapter 7 bankruptcy.
Original Article
Yellowstone Club World Files For Chapter 7 Bankruptcy
Yellowstone Club World ceased operations last year amid a public ownership battle and divorce of Tim and Edra Blixseth. Edra eventually won ownership of the club and promised to monetize several of the clubs properties.
Envisioned as the most elite destination club in the industry, Tim Blixseth scoured the globe looking for luxury vacation properties for the club's exclusive 150 members. Once comparing the search to "Easter egg hunting," the club included the Chateau de Farcheville in France, the El Tamarindo resort in Mexico, and a private golf club near St. Andrews in Scotland. Designed to charge as much as $10 million to join, the club failed to get off the ground, counting only a select few Yellowstone Club members who upgraded to join. In September of 2008, Yellowstone Club World ceased operations.
In November of 2008, Yellowstone Club, the Montana based resort that preceded Yellowstone Club World, filed for Chapter 11 bankruptcy protection. According to the first court filings, Yellowstone Club cited a combined debt of $344 million and assets of roughly $1.1 billion.
According to John Amsden, a lawyer representing Yellowstone Club World members, at least one of the properties available to Yellowstone Club World members is being used as leverage in the Yellowstone Club Chapter 11 proceedings.
"We're concerned the assets they do have are no longer in control of the Yellowstone Club World," said Amsden. "The involuntary bankruptcy was necessary because it appears that there is no one minding the club's business. We hope that the matter can be resolved with a minimum of expense."
Through the Chapter 7 filing, the creditors seek to find who and what entity controls the properties of Yellowstone Club World.
"The members of the Yellowstone Club World were promised access to very specific and significant properties in return for their significant membership dues. They anticipate that their interests to those properties will be respected," Amsden continued.
Within 20 days, the court will appoint a trustee who will begin to sort through the club's assets.
The Chapter 7 filing puts two destination clubs on the polar opposite of the spectrum in the same boat this week. High Country Club, the most inexpensive destination club in the industry, also filed for Chapter 7 bankruptcy.
Original Article
Yellowstone Club World Files For Chapter 7 Bankruptcy
Quintess's Ben Addoms Discusses Destination Club Partnership With The Oyster Circle
Last week, two leading destination clubs, Quintess and The Oyster Circle, announced a partnership that would allow members of both clubs access to the other's portfolio of luxury real estate. The Veras Group met with Ben Addoms to discuss the partnership and how it will benefit members of both clubs.
The Veras Group: Last week, Quintess started a lottery for initial bookings to The Oyster Circle portfolio. What are the member's reaction and participation in the lottery so far?
Ben Addoms: We've had great feedback on the experience. We've had about 80 people or so line up to get in on the lottery. We usually have a lottery for every new property, so this is like having nine lotteries at once.
Members are excited, and even if they don't win the lottery, there will still be a number of nights available for them to select.
We have already seen interest from several Oyster Circle members looking to visit our Tuscany homes and even Jackson Hole later this year.
The Veras Group: Do Oyster Circle homes need to be retrofitted to provide the same Quintess experience that your members have come to expect?
Addoms: We had the opportunity to have our European representatives visit each of The Oyster Circle properties, and all are very comparable, and sometimes even superior, to our Quintess homes. The great thing is that we are both very similar and our club members will enjoy a seamless experience with both club's properties.
The Veras Group: Have you personally been to any Oyster Circle properties?
Addoms: I have not been to an Oyster Circle home but am planning on visiting Cannes and St. Tropez in September. It is my favorite time to go and I only have so many Quintess nights to use each year.
With The Oyster Circle partnership, do you plan on adding any European properties into your portfolio any time in the future or do you envision The Oyster Circle portfolio of properties existing as the European component of a Quintess membership?
Addoms: Members generally tell us what they want and our surveys drive the process. If members feel strongly about the homes and destinations in The Oyster Circle collection, we might add Quintess homes in similar areas. At some point we may add another strategic partnership and make our partnership with The Oyster Circle permanent.
The Veras Group: Are there any limits to the reciprocal access between the clubs?
Addoms: We generally limit our plans to 10 nights per year, much like our Q Leading Experiences. We planned for about 250 nights to exchange per year.
The Veras Group: Could you speak about what it is like working with The Oyster Circle and the benefits it brings to members?
Addoms: I think it is fantastic to work with people who have similar qualities and our members are going to be excited to have doubled their number of European destinations. The Oyster Circle predominately bought non-city homes in Europe. The Oyster Circle's 50 to 60 members will now have access to more European city destinations, the Caribbean, and other US properties.
Nearly every major destination club in the industry now has multiple ancillary travel partnerships for their destination club members. By partnering two like minded clubs together, members not only have more destinations and homes available to them, but also a consistent travel experience no matter what club property they are visiting. Quintess and The Oyster Circle have already begun intermingling reservation and operational systems to help members of both clubs take full advantage of the partnership.
Check back tomorrow for part two of our interview with Quintess Founder and Executive Vice President, Ben Addoms, where he discusses the recent changes made at Quintess and his projection for the future of the destination club industry.
Original Article
Quintess's Ben Addoms Discusses Destination Club Partnership With The Oyster Circle
The Veras Group: Last week, Quintess started a lottery for initial bookings to The Oyster Circle portfolio. What are the member's reaction and participation in the lottery so far?
Ben Addoms: We've had great feedback on the experience. We've had about 80 people or so line up to get in on the lottery. We usually have a lottery for every new property, so this is like having nine lotteries at once.
Members are excited, and even if they don't win the lottery, there will still be a number of nights available for them to select.
We have already seen interest from several Oyster Circle members looking to visit our Tuscany homes and even Jackson Hole later this year.
The Veras Group: Do Oyster Circle homes need to be retrofitted to provide the same Quintess experience that your members have come to expect?
Addoms: We had the opportunity to have our European representatives visit each of The Oyster Circle properties, and all are very comparable, and sometimes even superior, to our Quintess homes. The great thing is that we are both very similar and our club members will enjoy a seamless experience with both club's properties.
The Veras Group: Have you personally been to any Oyster Circle properties?
Addoms: I have not been to an Oyster Circle home but am planning on visiting Cannes and St. Tropez in September. It is my favorite time to go and I only have so many Quintess nights to use each year.
With The Oyster Circle partnership, do you plan on adding any European properties into your portfolio any time in the future or do you envision The Oyster Circle portfolio of properties existing as the European component of a Quintess membership?
Addoms: Members generally tell us what they want and our surveys drive the process. If members feel strongly about the homes and destinations in The Oyster Circle collection, we might add Quintess homes in similar areas. At some point we may add another strategic partnership and make our partnership with The Oyster Circle permanent.
The Veras Group: Are there any limits to the reciprocal access between the clubs?
Addoms: We generally limit our plans to 10 nights per year, much like our Q Leading Experiences. We planned for about 250 nights to exchange per year.
The Veras Group: Could you speak about what it is like working with The Oyster Circle and the benefits it brings to members?
Addoms: I think it is fantastic to work with people who have similar qualities and our members are going to be excited to have doubled their number of European destinations. The Oyster Circle predominately bought non-city homes in Europe. The Oyster Circle's 50 to 60 members will now have access to more European city destinations, the Caribbean, and other US properties.
Nearly every major destination club in the industry now has multiple ancillary travel partnerships for their destination club members. By partnering two like minded clubs together, members not only have more destinations and homes available to them, but also a consistent travel experience no matter what club property they are visiting. Quintess and The Oyster Circle have already begun intermingling reservation and operational systems to help members of both clubs take full advantage of the partnership.
Check back tomorrow for part two of our interview with Quintess Founder and Executive Vice President, Ben Addoms, where he discusses the recent changes made at Quintess and his projection for the future of the destination club industry.
Original Article
Quintess's Ben Addoms Discusses Destination Club Partnership With The Oyster Circle
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