Citing the high number of members who downgraded their membership, High Country Club has elected to "give ourselves two more weeks to evaluate our options and opportunities."
The destination club began to fall on hard times earlier this year when the stock market began its downturn. Christian Kirschner, High Country Club's CEO, also stated that homes in the club's portfolio had seen decreases of up to 50 percent in value. The stock market and real estate crashes required the restructuring of High Country Club and their business model.
Christian Kirschner and High Country Club released their "Success Plan" for how the destination club would make changes to their operating model so the club could survive solely on the annual dues members paid into the club and not reliant on the club's ability to sell new destination club memberships.
To make the plan work, High Country Club was forced to greatly reduce both the homes available to members and the club's staff in tandem with increasing annual dues and requiring members to prepay for one year of usage. Roughly 75 percent of the club's members were required to approve the plan and sign new addendums agreeing to the new terms and pricing.
In a preliminary vote on Friday, 264 members voted for the Success Plan, percentage points shy of the 75 percent threshold High Country Club sought. Many of the 264 yes votes came from members who elected to downgrade their membership to limit the increase in annual dues the club was asking for. The downgraded members forced the club to modify their Success Plan and further decrease available homes and increase annual dues.
In another vote that took place yesterday with an updated Success Plan proposed, High Country Club did not get the required support needed and wrote the following to its members:
Dear High Country Club Member,
Thank you for all of the time and effort each one of you has made to evaluate the Success Plan. Over the past 3 weeks, we have worked night and day to develop a plan that could help HCC get through the paralyzing circumstances the economy brought to our company on September 14th.
On Monday, we announced a revised Success Plan that took into account the 264 yes votes and the high number of downgraded memberships included in the 264 yes votes. Based on the feedback we have received since Monday's announcement and the results of yesterday's vote, we will not be able to move forward with the Success Plan in its current form. As we have noted, the more no votes and downgraded memberships we receive causes us to liquidate additional homes and raise annual dues. The Success Plan has become cost prohibitive for the vast majority of our members as the portfolio and availability continues to be reduced.
I have decided to give ourselves 2 more weeks to evaluate our options and opportunities.
We will honor reservations through November 29th at a minimum.
I understand and acknowledge this is difficult for everyone. I will be in touch towards the end of next week with an update on our progress.
Thank you for your patience.
Many destination club industry professionals are closely monitoring the High Country Club situation and are already making plans for how their destination club will respond. The fate of 375 High Country Club members rests in the balance.
Original Article
High Country Club Delays Success Plan
The Veras Group is the only unbiased destination club news, consulting and brokerage firm. As our client, we accompany your purchase from start to finish: customized reviews of your travel needs, unrestricted access to our expert advisors, insiders' advice from industry veterans, insightful due diligence support, thorough club comparisons and points of difference, and the best available terms & pricing on your membership, all at no cost to you.
Please reach one of our destination club advisors at 877-VERAS-07 or 970-449-4680 to learn more about the industry, specific clubs, and our service, or visit our website www.TheVerasGroup.com.
Join us: we know the way.
Showing posts with label high country club success plan. Show all posts
Showing posts with label high country club success plan. Show all posts
Tuesday, November 18, 2008
Secondary Sales of High Country Club Memberships Dependent On Success Plan
High Country Club, once a leading destination club and a member of the Destination Club Association, was forced to restructure their business model to adapt to the current financial and real estate climate. During the course of the past several weeks, High Country Club's CEO Christian Kirschner with help from legal council and members helped craft a Success Plan to make the destination club self sufficient, allowing the club to exist solely on membership annual dues to cover operating expenses.
To accomplish this, High Country Club was forced to decrease the number of luxury vacation homes available to members and increase annual dues of current members. To minimize their operating expenses, High Country Club restructuring also forced the club to lay off well over 75 percent of their employees, including two of Kirschner's brothers.
Due to the economy, High Country Club has elected to suspend new membership sales and allow current High Country Club members to sell their existing memberships to prospective members if the Success Plan is approved November 17, 2008. For the Success Plan to be approved, roughly 75 percent of the current members would need to sign new addendums agreeing to the increased annual dues. In a preliminary Success Plan vote, nearly 75 percent of members voted yes.
As opposed to the standard destination club model where a predetermined number of new members must be added to the club before one is redeemed, allowing members to determine the price that they are willing to sell their membership effectively makes the membership and membership deposit much more liquid.
Based on the club's resignation list and resignation policies, High Country Club will post the first member chronologically in each membership type from the resignation list on the High Country Club website. Resigning members will be able to set their own pricing on the membership deposit, but cannot exceed the most recent pricing structure used by High Country Club. Membership annual dues and terms can not be changed.
Despite the fact that members who aren't at the top of the resignation list can still sell their membership on the open market, members who are at the top of the list hold complete control of the resignation process.
If a Private Member wants to sell their membership for $79,000 (the last publicly sold pricing for Private Memberships was $80,000), and they are at the top of the resignation list and do not sell their membership, they are effectively holding all other Private Members hostage. As mentioned before, all other Private Members in this example could continue trying to sell their membership, but it is very unlikely that they will receive the exposure the highest person on the resignation list will see.
As you can see above based on the first people on the resignation list, there are widespread differences between what resigning members are seeking when they sell their membership. The highest Private Member with 35 nights of access on the resignation list is seeking to sell their membership for $65,000. Another Private Member but with 45 nights of access is also attempting to resign their membership but only wants $27,935. Although many Private Members with 35 nights of access may be behind this member, it is unlikely that anyone will purchase this membership when another member is selling their membership for $37,065 less and ten additional nights of annual travel.
Leading Canadian equity destination club M Private Residences has also made substantial changes to their business model and also allows members to sell their membership on the open market. Following the changes at M Private Residences, the new redemption policy works far differently from the proposed plan at High Country Club. Prospective members interested in M Private Residences place a bid on what they would like to pay for their membership. Each member of that membership type on the redemption list can potentially sell to this interested party. The person highest on the resignation list is offered what the interested buyer bid. That member can elect to accept the bid or deny it. Accepting it means that the membership is sold to the new party and the new member can begin traveling like any other member. If the member rejects the offer, the next highest person on the resignation list is offered the same bid the prospective member made. If members continue denying the bid placed by the prospective member, the process continues until the last member on the resignation list has the opportunity to accept or deny. If they also deny, the bidder may increase their bid and the process begins anew.
The results of High Country Club's Success Plan should be available Friday. If successful, members may have the opportunity to recoup some of their membership deposits by selling to other interested parties. If not, the destination club will be forced to liquidate their assets and members may not see anything.
Either way, the upcoming 48 hours will be watched closely by Christian Kirschner, 375 members, and the rest of the destination club industry.
Original Article
Sales of High Country Club Memberships Dependent on Success Plan
The Veras Group is the only unbiased destination club news, consulting and brokerage firm. As our client, we accompany your purchase from start to finish: customized reviews of your travel needs, unrestricted access to our expert advisors, insiders' advice from industry veterans, insightful due diligence support, thorough club comparisons and points of difference, and the best available terms & pricing on your membership, all at no cost to you.
Please reach one of our destination club advisors at 877-VERAS-07 or 970-449-4680 to learn more about the industry, specific clubs, and our service, or visit our website www.TheVerasGroup.com.
Join us: we know the way.
To accomplish this, High Country Club was forced to decrease the number of luxury vacation homes available to members and increase annual dues of current members. To minimize their operating expenses, High Country Club restructuring also forced the club to lay off well over 75 percent of their employees, including two of Kirschner's brothers.
Due to the economy, High Country Club has elected to suspend new membership sales and allow current High Country Club members to sell their existing memberships to prospective members if the Success Plan is approved November 17, 2008. For the Success Plan to be approved, roughly 75 percent of the current members would need to sign new addendums agreeing to the increased annual dues. In a preliminary Success Plan vote, nearly 75 percent of members voted yes.
As opposed to the standard destination club model where a predetermined number of new members must be added to the club before one is redeemed, allowing members to determine the price that they are willing to sell their membership effectively makes the membership and membership deposit much more liquid.
Based on the club's resignation list and resignation policies, High Country Club will post the first member chronologically in each membership type from the resignation list on the High Country Club website. Resigning members will be able to set their own pricing on the membership deposit, but cannot exceed the most recent pricing structure used by High Country Club. Membership annual dues and terms can not be changed.
Despite the fact that members who aren't at the top of the resignation list can still sell their membership on the open market, members who are at the top of the list hold complete control of the resignation process.
If a Private Member wants to sell their membership for $79,000 (the last publicly sold pricing for Private Memberships was $80,000), and they are at the top of the resignation list and do not sell their membership, they are effectively holding all other Private Members hostage. As mentioned before, all other Private Members in this example could continue trying to sell their membership, but it is very unlikely that they will receive the exposure the highest person on the resignation list will see.
As you can see above based on the first people on the resignation list, there are widespread differences between what resigning members are seeking when they sell their membership. The highest Private Member with 35 nights of access on the resignation list is seeking to sell their membership for $65,000. Another Private Member but with 45 nights of access is also attempting to resign their membership but only wants $27,935. Although many Private Members with 35 nights of access may be behind this member, it is unlikely that anyone will purchase this membership when another member is selling their membership for $37,065 less and ten additional nights of annual travel.
Leading Canadian equity destination club M Private Residences has also made substantial changes to their business model and also allows members to sell their membership on the open market. Following the changes at M Private Residences, the new redemption policy works far differently from the proposed plan at High Country Club. Prospective members interested in M Private Residences place a bid on what they would like to pay for their membership. Each member of that membership type on the redemption list can potentially sell to this interested party. The person highest on the resignation list is offered what the interested buyer bid. That member can elect to accept the bid or deny it. Accepting it means that the membership is sold to the new party and the new member can begin traveling like any other member. If the member rejects the offer, the next highest person on the resignation list is offered the same bid the prospective member made. If members continue denying the bid placed by the prospective member, the process continues until the last member on the resignation list has the opportunity to accept or deny. If they also deny, the bidder may increase their bid and the process begins anew.
The results of High Country Club's Success Plan should be available Friday. If successful, members may have the opportunity to recoup some of their membership deposits by selling to other interested parties. If not, the destination club will be forced to liquidate their assets and members may not see anything.
Either way, the upcoming 48 hours will be watched closely by Christian Kirschner, 375 members, and the rest of the destination club industry.
Original Article
Sales of High Country Club Memberships Dependent on Success Plan
The Veras Group is the only unbiased destination club news, consulting and brokerage firm. As our client, we accompany your purchase from start to finish: customized reviews of your travel needs, unrestricted access to our expert advisors, insiders' advice from industry veterans, insightful due diligence support, thorough club comparisons and points of difference, and the best available terms & pricing on your membership, all at no cost to you.
Please reach one of our destination club advisors at 877-VERAS-07 or 970-449-4680 to learn more about the industry, specific clubs, and our service, or visit our website www.TheVerasGroup.com.
Join us: we know the way.
Monday, November 10, 2008
High Country Club Raises Dues and Cuts More Homes Following The Results Of
High Country Club members were asked to provide a preliminary answer to a very difficult question that will affect their checkbooks, their travel plans moving forward, and the future of a leading destination club: Do you want to stay with High Country Club?
Due to a stumbling economy, plummeting real estate prices, and a failed destination club merger, High Country Club was forced to restructure their business model. The High Country Club team in tandem with support from their legal council and investors introduced their "High Country Club Success Plan." This plan would make the club self sufficient, reliant only on membership dues, not new membership sales or affected by swings in financial or real estate markets.
Read Christian Kirschner's High Country Club Success Plan Letter
Read High Country Club's Success Plan Questions and Answers
The plan to save their destination club required many concessions from members. As a start up club, High Country Club focused on being the price leader in the destination club industry. By doing so, High Country Club's membership dues were set well below their competitors, an attractive marketing campaign but not a sustainable business model. For the Success Plan to be implemented, members would have to pay more in annual dues to come more in line with the club's annual payments. To infuse the club with much needed capital, members would also need to pay their annual dues in advance. In addition, to lower much of their costs, nearly half of the club's inventory of luxury vacation homes would need to be cut from their portfolio. For the plan to be implemented, 75 percent of the club's members would need to sign new addendums agreeing to the new terms for the destination club to survive.
High Country Club asked that members answer with a tentative yes or no if they would be moving forward with the club and their new direction by Friday of last week. By voting yes, you believed that there was a 90 percent chance of moving forward with the plan. Of the 354 votes, 264 of them said that they would be moving forward with High Country Club and their Success Plan. 90 voted no. In the slimmest of margins, High Country Club just fell short of their 75 percent goal with 74.576 percent of the club's members voting yes. Unfortunately, many of the 264 yes votes came from members who wanted to stay with the club but elected to downgrade their membership to a lower annual dues structure. Based on the results, Christian Kirschner, High Country Club's CEO wrote a letter to his members outlining what the results meant to members and how the Success Plan will be changed.
Over the past 2 weeks we worked together to truly challenge the Success Plan and expose its weaknesses. We have responded to several thousand emails and hundreds of calls. Our team has worked day and night to take all of the suggestions, challenges and comments and include those is the final Success Plan that we are proposing. I am thankful for all of the time and effort many of you made to analyze the plan to help find ways it can be approve.
Based on Friday’s vote, which included 264 yes votes and 90 no votes, we have adjusted the model to reflect the results. Many of the yes votes also downgraded their membership, which has in turn, decreased the annual dues revenues.
The following are the key points of the Success Plan moving forward.
1) Based on last week’s vote of 264 yes votes and 90 no votes, including numerous downgraded memberships, the annual dues were required to be modified according to the following schedule based on a 10.5 member to 1 home member to property ratio:
Companion – $475/night or $3,325 annually
Associate – $450/night or $6,750 annually
Affiliate (21 night) – $435/night or $9,135 annually
Affiliate (25 night) – $425/night or $10,625 annually
Private (35 night) – $360/night or $12,600 annually
Private (45 night) – $325/night or $14,625 annually
Corporate/Group – $370/night or $15,540 annually
*Annual dues will be adjusted by actual Addendums signed and downgraded or upgraded memberships.
2) Annual dues will be required 1 year in advance. All member's annual dues will be due on December 1st of each year. We have contemplated many different scenarios regarding the payment of dues. The conclusion is that it is vital for the success of our plan that we have the revenue to support a year’s worth of service and accommodations each year. All members paying their annual dues at the same time each year will ensure members that they will get the service they paid for during the coming year. If we were to allow members to pay quarterly or semi-annually, we could very quickly move into a downward spiral situation where members, not renewing their dues throughout the year, would force us to liquidate homes and cancel reservations, which simply will not work.
Dues will be required to be paid by December 1st of each year by check. We will allow members to charge dues to their credit card for a 3% convenience fee. Annual dues for December 1st, 2008 through November 31st, 2009 will be due on November 21st, 2008.
3) Based on votes by members last week, feedback from members, demographics of our members and limitations we have with some of the properties, the following is the priority list of homes. Please keep in mind this is not the final list and it is subject to how many Addendums are signed and how many additional members downgrade their membership. In addition, if we have some of the undecided votes agree to the Plan and we have over 264 members sign the Addendum, additional homes may be included. The following scenario assumes a 10.5:1 member to property ratio.
1) Cabo San Lucas/Villa La Estancia
2) Playa del Carmen/Luna Encantada – Beachfront
3) Mammoth/Grand Sierra Lodge
4) Nuevo Vallarta/Villa La Estancia
5) Punta Mita/La Playa Estates
6) Outer Banks/The Currituck Club
7) Keystone/Settlers Creek
8) Turks & Caicos/Villa Renaissance
9) Big Island-Waikoloa/Colony Villas
10) La Quinta/PGA West
11) Beaver Creek-Arrowhead/Aspenwood Lodge
12) New York/1600 Broadway
13) Orlando/Champion’s Gate
14) Stowe Vermont/Stoweflake
4) Many of our members expressed that they were willing to pay more in annual dues for more options and better availability. We spent days running different models and determined that if we were to have a member to property ratio less than 10.5:1, the majority of our members would potentially not be able to agree to the Success Plan because the dues would be far too high. Therefore, we have developed a plan for members who would like to pay more in annual dues for additional destinations and better availability. The following is the offer and would require 90 members to agree to the increase in annual dues:
* 4 additional properties would be added to the portfolio for exclusive use of the 90 members.
* The dues increase would be approximately $300/night or $4,200 annually.
* Members would be allowed 2 weeks of usage in the 4 homes.
* The 4 homes would offer 208 weeks, but dues are based on selling 180 weeks for better availability.
* Members for this plan would only be eligible if they do not downgrade their membership and only if it is an addition to their current membership.
* The 90 members would vote on which of the properties would be included from the following list:
1) Costa Rica/Reserva Conchal
2) Tuscany/Villa Petrischio-Artu 2BR
3) Cancun/Portofino
4) Beaver Creek/Village Hall
5) Maui – Wailea/The Palms
6) Breckenridge/Stonehaven
7) Copper Mountain/The Mill Club
8) Playa del Carmn/Luna Encantada – Penthouse
9) Winter Park/Antler’s at Lakota
10) Telluride/Owl Meadows
11) Other
5) We have formed the HCC Member Board. The board consists of members who have specialties that will be critical to the success of the business. They also have extensive destination club industry experience. Most of all, they want High Country Club to succeed for many years into the future. The board will be made up of the following members:
Deleted names to preserve privacy
Details of the roles and responsibilities of the Member Board will be available toward the end of November.
6) HCC will place member’s annual dues in a separate account. We are developing the draw schedule that is required during the Success Plan phase. The independent account will be managed by (member name deleted) of our Member Board.
7) In the event we are forced to file for Chapter 11 bankruptcy protection, we will need to have member's contribute to the cost of Chapter 11 protection. There will be a 1 time charge of up to $600 per member.
8) All members of HCC existing membership base will be classified as “Charter Members”. This does include members who do not sign the Addendum. All this means is that members will be able to sell their membership at the then current membership pricing once new membership sales resume over and above our 375 member membership base.
9) Members will be responsible for the cleaning fees for each stay varying between approximately $125 per stay to $350 per stay, depending on the size of the unit. A cleaning schedule per property will be provided.
10) The resignation policy will be as follows:
HCC will offer for sale on the website the first member (not the top 5 members) on the resignation list in each membership type the ability to sell their membership for a price determined by the member based on the following: If your membership agreement entitles you up to 80% of what you paid, you may price your membership at up 100% of what you paid and the club will not take it’s 20%. The dues for the new member must be based on our current dues structure. We believe that this will offer members a much greater opportunity to sell their membership than our old 2 in, 1 out policy.
11) In a continued effort to keep our expenses as low as possible, we have vacated our office space and will be working from home. This will not affect our ability to run the club and service our members. In addition, we have very sadly had to let Nancy go in order to keep dues down. Chris and Kristy will be taking care of Nancy’s members.
12) Reservations in the following homes will be cancelled effective January 3, 2009. The cost to the company to pay rent through March in the following homes was over $130k. If we honored those reservations, dues would have had to be increased significantly, which the majority of members would not agree to. We will do our best to re-book members with cancelled reservations in other homes in the portfolio.
The following homes will no longer have reservations honored:
1) Rosemary Beach/Barrett Square Lofts
2) Tuscany/Villa Petrischio-Merlino 1BR
The following homes will have reservations honored through December 15, 2009:
1) Tuscany/Villa Petrischio-Artu 2BR
The following homes will have reservations honored through January 3, 2009:
1) Costa Rica/Reserva Conchal
2) Cancun/Portofino
3) Lake Tahoe/Iron Horse Lodge
4) Maui-Mauka/Nani Lau
5) Breckenridge Mountain Lodge
6) Beaver Creek/Village Hall
7) Playa del Carmen/Luna Encantada – Penthouse
The following homes will have their reservations honored through March of 2009:
1) Hilton Head/Sea Pines Plantation
2) Keystone/Red Hawk
3) Steamboat Springs/Eagle Ridge Lodge
4) Snowmass/Terrace House
5) La Costa Resort and Spa
6) Copper Mountain/The Mill Club
7) Winter Park/Antler’s at Lakota
8) Breckenridge/Stonehaven
9) Maui – Wailea/The Palms
10) Telluride/Owl Meadows
11) Deer Valley/Black Bear Lodge
The Success Plan that we have presented will enable HCC to stabilize itself during the difficult economic times ahead. The plan requires sacrifice from everyone. However, the Success Plan gives all us the opportunity to continue enjoying the High Country Club lifestyle until we move into better economic times. HCC will re-emerge as a stronger, more stable business that all of us can enjoy for many years into the future.
The Addendum will be sent to members by the end of the day on Monday. On Wednesday, we will ask for members to send a final email letting us know if they are signing the Addendum. In the event fewer people intend to sign the Addendum than during last week’s vote, we will again have to adjust the dues and portfolio appropriately and will propose any changes Thursday. Friday will be the final decision day.
Thank you again for the time and consideration it has taken to get through this process. I am prayerful that we will get the support we need to keep the company going through the rough economic times ahead. If we are able, HCC will flourish into the future.
Respectfully,
Christian V. Kirschner
President & CEO
As mentioned by Kirschner, new addendums outlining these terms will be sent to members today. With High Country Club falling just short of their 75 percent goal, it will be interesting to see how the news of increased annual dues and decreased properties will alter the upcoming decision members have. The club has been receptive to many suggestions offered by members and the creation of a High Country Club Member Board is a positive step, but for High Country Club members, are these changes coming too late?
Original Article
http://www.theverasgroup.com/index.php?pr=Destination_Club_News-High_Country_Club_Releases_Success_Plan_Results_and_Decreases_Destination_Club_Homes
About The Veras Group
The Veras Group is the only unbiased destination club news, consulting and brokerage firm. As our client, we accompany your purchase from start to finish: customized reviews of your travel needs, unrestricted access to our expert advisors, insiders' advice from industry veterans, insightful due diligence support, thorough club comparisons and points of difference, and the best available terms & pricing on your membership, all at no cost to you.
Please reach one of our destination club advisors at 877-VERAS-07 or 970-449-4680 to learn more about the industry, specific clubs, and our service, or visit our website www.TheVerasGroup.com.
Join us: we know the way.
Due to a stumbling economy, plummeting real estate prices, and a failed destination club merger, High Country Club was forced to restructure their business model. The High Country Club team in tandem with support from their legal council and investors introduced their "High Country Club Success Plan." This plan would make the club self sufficient, reliant only on membership dues, not new membership sales or affected by swings in financial or real estate markets.
Read Christian Kirschner's High Country Club Success Plan Letter
Read High Country Club's Success Plan Questions and Answers
The plan to save their destination club required many concessions from members. As a start up club, High Country Club focused on being the price leader in the destination club industry. By doing so, High Country Club's membership dues were set well below their competitors, an attractive marketing campaign but not a sustainable business model. For the Success Plan to be implemented, members would have to pay more in annual dues to come more in line with the club's annual payments. To infuse the club with much needed capital, members would also need to pay their annual dues in advance. In addition, to lower much of their costs, nearly half of the club's inventory of luxury vacation homes would need to be cut from their portfolio. For the plan to be implemented, 75 percent of the club's members would need to sign new addendums agreeing to the new terms for the destination club to survive.
High Country Club asked that members answer with a tentative yes or no if they would be moving forward with the club and their new direction by Friday of last week. By voting yes, you believed that there was a 90 percent chance of moving forward with the plan. Of the 354 votes, 264 of them said that they would be moving forward with High Country Club and their Success Plan. 90 voted no. In the slimmest of margins, High Country Club just fell short of their 75 percent goal with 74.576 percent of the club's members voting yes. Unfortunately, many of the 264 yes votes came from members who wanted to stay with the club but elected to downgrade their membership to a lower annual dues structure. Based on the results, Christian Kirschner, High Country Club's CEO wrote a letter to his members outlining what the results meant to members and how the Success Plan will be changed.
Over the past 2 weeks we worked together to truly challenge the Success Plan and expose its weaknesses. We have responded to several thousand emails and hundreds of calls. Our team has worked day and night to take all of the suggestions, challenges and comments and include those is the final Success Plan that we are proposing. I am thankful for all of the time and effort many of you made to analyze the plan to help find ways it can be approve.
Based on Friday’s vote, which included 264 yes votes and 90 no votes, we have adjusted the model to reflect the results. Many of the yes votes also downgraded their membership, which has in turn, decreased the annual dues revenues.
The following are the key points of the Success Plan moving forward.
1) Based on last week’s vote of 264 yes votes and 90 no votes, including numerous downgraded memberships, the annual dues were required to be modified according to the following schedule based on a 10.5 member to 1 home member to property ratio:
Companion – $475/night or $3,325 annually
Associate – $450/night or $6,750 annually
Affiliate (21 night) – $435/night or $9,135 annually
Affiliate (25 night) – $425/night or $10,625 annually
Private (35 night) – $360/night or $12,600 annually
Private (45 night) – $325/night or $14,625 annually
Corporate/Group – $370/night or $15,540 annually
*Annual dues will be adjusted by actual Addendums signed and downgraded or upgraded memberships.
2) Annual dues will be required 1 year in advance. All member's annual dues will be due on December 1st of each year. We have contemplated many different scenarios regarding the payment of dues. The conclusion is that it is vital for the success of our plan that we have the revenue to support a year’s worth of service and accommodations each year. All members paying their annual dues at the same time each year will ensure members that they will get the service they paid for during the coming year. If we were to allow members to pay quarterly or semi-annually, we could very quickly move into a downward spiral situation where members, not renewing their dues throughout the year, would force us to liquidate homes and cancel reservations, which simply will not work.
Dues will be required to be paid by December 1st of each year by check. We will allow members to charge dues to their credit card for a 3% convenience fee. Annual dues for December 1st, 2008 through November 31st, 2009 will be due on November 21st, 2008.
3) Based on votes by members last week, feedback from members, demographics of our members and limitations we have with some of the properties, the following is the priority list of homes. Please keep in mind this is not the final list and it is subject to how many Addendums are signed and how many additional members downgrade their membership. In addition, if we have some of the undecided votes agree to the Plan and we have over 264 members sign the Addendum, additional homes may be included. The following scenario assumes a 10.5:1 member to property ratio.
1) Cabo San Lucas/Villa La Estancia
2) Playa del Carmen/Luna Encantada – Beachfront
3) Mammoth/Grand Sierra Lodge
4) Nuevo Vallarta/Villa La Estancia
5) Punta Mita/La Playa Estates
6) Outer Banks/The Currituck Club
7) Keystone/Settlers Creek
8) Turks & Caicos/Villa Renaissance
9) Big Island-Waikoloa/Colony Villas
10) La Quinta/PGA West
11) Beaver Creek-Arrowhead/Aspenwood Lodge
12) New York/1600 Broadway
13) Orlando/Champion’s Gate
14) Stowe Vermont/Stoweflake
4) Many of our members expressed that they were willing to pay more in annual dues for more options and better availability. We spent days running different models and determined that if we were to have a member to property ratio less than 10.5:1, the majority of our members would potentially not be able to agree to the Success Plan because the dues would be far too high. Therefore, we have developed a plan for members who would like to pay more in annual dues for additional destinations and better availability. The following is the offer and would require 90 members to agree to the increase in annual dues:
* 4 additional properties would be added to the portfolio for exclusive use of the 90 members.
* The dues increase would be approximately $300/night or $4,200 annually.
* Members would be allowed 2 weeks of usage in the 4 homes.
* The 4 homes would offer 208 weeks, but dues are based on selling 180 weeks for better availability.
* Members for this plan would only be eligible if they do not downgrade their membership and only if it is an addition to their current membership.
* The 90 members would vote on which of the properties would be included from the following list:
1) Costa Rica/Reserva Conchal
2) Tuscany/Villa Petrischio-Artu 2BR
3) Cancun/Portofino
4) Beaver Creek/Village Hall
5) Maui – Wailea/The Palms
6) Breckenridge/Stonehaven
7) Copper Mountain/The Mill Club
8) Playa del Carmn/Luna Encantada – Penthouse
9) Winter Park/Antler’s at Lakota
10) Telluride/Owl Meadows
11) Other
5) We have formed the HCC Member Board. The board consists of members who have specialties that will be critical to the success of the business. They also have extensive destination club industry experience. Most of all, they want High Country Club to succeed for many years into the future. The board will be made up of the following members:
Deleted names to preserve privacy
Details of the roles and responsibilities of the Member Board will be available toward the end of November.
6) HCC will place member’s annual dues in a separate account. We are developing the draw schedule that is required during the Success Plan phase. The independent account will be managed by (member name deleted) of our Member Board.
7) In the event we are forced to file for Chapter 11 bankruptcy protection, we will need to have member's contribute to the cost of Chapter 11 protection. There will be a 1 time charge of up to $600 per member.
8) All members of HCC existing membership base will be classified as “Charter Members”. This does include members who do not sign the Addendum. All this means is that members will be able to sell their membership at the then current membership pricing once new membership sales resume over and above our 375 member membership base.
9) Members will be responsible for the cleaning fees for each stay varying between approximately $125 per stay to $350 per stay, depending on the size of the unit. A cleaning schedule per property will be provided.
10) The resignation policy will be as follows:
HCC will offer for sale on the website the first member (not the top 5 members) on the resignation list in each membership type the ability to sell their membership for a price determined by the member based on the following: If your membership agreement entitles you up to 80% of what you paid, you may price your membership at up 100% of what you paid and the club will not take it’s 20%. The dues for the new member must be based on our current dues structure. We believe that this will offer members a much greater opportunity to sell their membership than our old 2 in, 1 out policy.
11) In a continued effort to keep our expenses as low as possible, we have vacated our office space and will be working from home. This will not affect our ability to run the club and service our members. In addition, we have very sadly had to let Nancy go in order to keep dues down. Chris and Kristy will be taking care of Nancy’s members.
12) Reservations in the following homes will be cancelled effective January 3, 2009. The cost to the company to pay rent through March in the following homes was over $130k. If we honored those reservations, dues would have had to be increased significantly, which the majority of members would not agree to. We will do our best to re-book members with cancelled reservations in other homes in the portfolio.
The following homes will no longer have reservations honored:
1) Rosemary Beach/Barrett Square Lofts
2) Tuscany/Villa Petrischio-Merlino 1BR
The following homes will have reservations honored through December 15, 2009:
1) Tuscany/Villa Petrischio-Artu 2BR
The following homes will have reservations honored through January 3, 2009:
1) Costa Rica/Reserva Conchal
2) Cancun/Portofino
3) Lake Tahoe/Iron Horse Lodge
4) Maui-Mauka/Nani Lau
5) Breckenridge Mountain Lodge
6) Beaver Creek/Village Hall
7) Playa del Carmen/Luna Encantada – Penthouse
The following homes will have their reservations honored through March of 2009:
1) Hilton Head/Sea Pines Plantation
2) Keystone/Red Hawk
3) Steamboat Springs/Eagle Ridge Lodge
4) Snowmass/Terrace House
5) La Costa Resort and Spa
6) Copper Mountain/The Mill Club
7) Winter Park/Antler’s at Lakota
8) Breckenridge/Stonehaven
9) Maui – Wailea/The Palms
10) Telluride/Owl Meadows
11) Deer Valley/Black Bear Lodge
The Success Plan that we have presented will enable HCC to stabilize itself during the difficult economic times ahead. The plan requires sacrifice from everyone. However, the Success Plan gives all us the opportunity to continue enjoying the High Country Club lifestyle until we move into better economic times. HCC will re-emerge as a stronger, more stable business that all of us can enjoy for many years into the future.
The Addendum will be sent to members by the end of the day on Monday. On Wednesday, we will ask for members to send a final email letting us know if they are signing the Addendum. In the event fewer people intend to sign the Addendum than during last week’s vote, we will again have to adjust the dues and portfolio appropriately and will propose any changes Thursday. Friday will be the final decision day.
Thank you again for the time and consideration it has taken to get through this process. I am prayerful that we will get the support we need to keep the company going through the rough economic times ahead. If we are able, HCC will flourish into the future.
Respectfully,
Christian V. Kirschner
President & CEO
As mentioned by Kirschner, new addendums outlining these terms will be sent to members today. With High Country Club falling just short of their 75 percent goal, it will be interesting to see how the news of increased annual dues and decreased properties will alter the upcoming decision members have. The club has been receptive to many suggestions offered by members and the creation of a High Country Club Member Board is a positive step, but for High Country Club members, are these changes coming too late?
Original Article
http://www.theverasgroup.com/index.php?pr=Destination_Club_News-High_Country_Club_Releases_Success_Plan_Results_and_Decreases_Destination_Club_Homes
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