Yesterday, the Canadian Dollar posted its first weekly gain against the US Dollar for the first time in five weeks. Despite gaining 5.7 percent for the week, the Canadian Dollar ended 11.6 percent down compared to the greenback. Typically very similar in value, the strength that the US Dollar currently holds over the Canadian Dollar allows both destination club prospects and destination clubs themselves an opportunity to enjoy savings in the Canadian marketplace.
The Discovery Club, a destination club based in British Columbia, procures partnerships with world class resorts all over the world. Members have access to over 100 five star resorts in locations like New York City, Scottsdale, and Maui and international destinations including Hong Kong, Cancun, and Rome and boasts "every Marriot hotel on the planet."
The Discovery Club offers three different membership levels: Silver, Gold, and Platinum costing C$98,000, C$175,000, and C$270,000 respectively. Due to the strength the US Dollar currently holds over the Canadian Dollar, US consumers can enjoy membership in The Discovery Club at a reduced cost, saving over $50,000.
Much like a traditional destination club, members pay a one time deposit and annual dues. After five years, members can sell their membership back to the club for 70% of market value.
The comparative value of the Canadian dollar to the US Dollar also allows US based destination clubs to save significantly on luxury real estate in Canada. In the past week, Ultimate Escapes CEO Jim Tousignant and Abercrombie & Kent Residence Club President Jarvis Slade, Jr., have both stated that current real estate prices are most favorable to destination clubs.
As evidenced by a recent Harris/Decima travel survey, Canada holds a significant potential market for destination clubs members. By acquiring real estate in the Canadian market while the US Dollar remains strong, destination clubs can begin to court a large audience of Canadian buyers with an extensive portfolio of Canadian properties.
To learn more about The Discovery Club and its unique destination club offering, please feel free to contact The Veras Group, your complimentary destination club analyst.
Strength of US Dollar For Canadian Dollar Allows For Destination Club Discounts
Monday, November 3, 2008
Sunday, November 2, 2008
Moncasa Caribbean Experience Maintains Strong Destination Club Outlook
Moncasa Caribbean Experience's President John Collins emphasized "mid to long term fundamentals of the leisure real estate market will remain strong" to a group of investors and Caribbean media representatives.
"The recent Harris/Decima study released at the end of September '08 clearly indicates the Canadian demand for second home lifestyle properties is there and is at the start of a 15 year purchase cycle, being fueled by boomers desire to reinvent their retirement lifestyle wants," Collins said on Sunday.
Harris/Decima recently released the results of a Canadian travel survey that stated that 14 percent of the study's respondents currently own recreational real estate and that 30 percent of the sample indicated that they are interested in purchasing a recreational property in the future.
As published in the article "How Destination Clubs Fare In A Slow Real Estate Market," many destination clubs can capitalize on decreased property costs to procure strong real estate to their portfolio of luxury vacation homes. Michael Crunkhorn, Moncasa Capital's Co-Founder said "We are now in a position to complete the second round of real estate acquisitions - with much better terms, due in part to the swoon in real estate prices across the region."
Moncasa Caribbean Experience plans to purchase 80 properties across 20 islands over the next five years. Moncasa has a limited number of founder memberships available to a small group of investors, family, and friends. Much like many new clubs, Moncasa is offering many founding member destination club benefits including a 100 percent refund policy and will act as an equity destination club.
If you don't know what a destination club is, learn more: What is a destination club?
Moncasa Caribbean Experience Maintains Strong Destination Club Outlook
"The recent Harris/Decima study released at the end of September '08 clearly indicates the Canadian demand for second home lifestyle properties is there and is at the start of a 15 year purchase cycle, being fueled by boomers desire to reinvent their retirement lifestyle wants," Collins said on Sunday.
Harris/Decima recently released the results of a Canadian travel survey that stated that 14 percent of the study's respondents currently own recreational real estate and that 30 percent of the sample indicated that they are interested in purchasing a recreational property in the future.
As published in the article "How Destination Clubs Fare In A Slow Real Estate Market," many destination clubs can capitalize on decreased property costs to procure strong real estate to their portfolio of luxury vacation homes. Michael Crunkhorn, Moncasa Capital's Co-Founder said "We are now in a position to complete the second round of real estate acquisitions - with much better terms, due in part to the swoon in real estate prices across the region."
Moncasa Caribbean Experience plans to purchase 80 properties across 20 islands over the next five years. Moncasa has a limited number of founder memberships available to a small group of investors, family, and friends. Much like many new clubs, Moncasa is offering many founding member destination club benefits including a 100 percent refund policy and will act as an equity destination club.
If you don't know what a destination club is, learn more: What is a destination club?
Moncasa Caribbean Experience Maintains Strong Destination Club Outlook
Solstice Collection Changes Membership Plan and Prices
Ultra-luxury destination club and Robb Report's Best of the Best winner, Solstice Collection has announced that they will suspend sales of their Signature Membership, lower their member-to-property ratio, increase their membership deposit, and reduce their debt to 35% LTV all beginning January 1, 2009.
Since their launch in 2004, Solstice has maintained near total market control of the ultra-luxury destination club sector. With the recent Yellowstone Club World closure, Solstice once again asserts their presence at the top of the destination club industry.
While each of the changes planned by Solstice may independently effect your decision to consider Solstice as a destination club option, each works together to ultimately raise membership satisfaction in the long run.
Suspend Signature Membership Sales
Nearly every destination club in the industry now offers multiple membership tiers for different price points and usage levels. The long standing occupancy metric "member-to-property" ratio has been used nearly since day one, showing how many homes a club has in relation to their membership base. The addition of these new membership plans with differing and usage rules diluted the member-to-property ratio metric.
The idea of a "full-member equivalent" was created to decipher the impact every member had on occupancy. A club sets a number of nights that their typical member would travel per year and uses that to weigh the member-to-property ratio. For example, if the club sets a full-member equivalent at 35 nights, it would take five members with seven nights of usage to equal one full-member equivalent. In the past, each of those five members would have counted as a member and subsequently made the member-to-property ratio seem higher than it actually was.
Solstice Collection's lowest plan, the Signature Membership, offered members 14 nights of annual travel for a $615,000 membership deposit and $34,000 in annual dues. Traditionally, the lower the amount of annual usage, the higher percentage of nights will be used. A member with 14 nights of usage is far more likely to use all of their nights than a member with 40 nights. With Solstice discontinuing their Signature Membership, occupancy rates will decrease as the membership with the highest percentage of use will be limited to current members.
By discounting their Signature level program, Solstice can more accurately publish their true member-to-property ratio and properly relay their true availability to prospective and current members.
Lower Member To Property Ratio
By more accurately stating their member-to-property ratio with the suspension of their Signature Membership and being able to count every member as a member, Solstice will also move to a targeted 5:1 member-to-property ratio. Solstice and Founder Graham Kos said "Over the last two years, many destination clubs have adopted the practice of fractionalizing memberships into even smaller increments. While this trend indeed drives membership volume, it negatively impacts a club's calendar due to a greater number of individuals competing for peak time." At this new ratio, Solstice will be the most exclusive club available and club properties would be available approximately 50% of the time. Graham stated that members want to be able to plan their luxury vacations in advance but also want the flexibility to enjoy the club's properties at the last minute.
Increased Membership Deposit
Providing for superior availability does come at a cost.
With the suspension of the Signature level on January 1, Platinum will increase from $975,000 to $1,125,000 and Sky will increase from $1,950,000 to $2,250,000. Solstice members can elect between two different membership options. Members can choose between receiving 100% of their initial membership deposit when they elect to resign or 80% of the future value of their membership. Other than the suspension of the Signature offering and a slight increase in annual dues, all other terms and usage will be unaffected by these changes.
Reduced Loan To Value Debt
Through the increase in membership deposits, Solstice is able to decrease their targeted level of debt from 40% to 35%. Currently they are operating at 33% but plan to acquire eight new homes in the next two years in Miami, St. Barts, and Rome to name but a few and will likely increase slightly with the new property additions.
By decreasing the debt on new home acquisitions, Solstice effectively strengthens the backing of their members' deposits. From Solstice's perspective, it also makes them less reliant on the credit markets for financing.
The Veras Group Perspective
These are bold moves by the Solstice Collection but are all positive steps for both short term membership satisfaction and long term business sustainability. We are glad to hear that Graham Kos and Jeff Scult both spoke with Solstice members multiple times prior to implementing these changes. At the Solstice Collection Advisory Board meeting on Monday of this week, members agreed that these were positive steps forward.
Any time a destination club can lower their debt and use more of your membership deposit towards the purchase of an appreciating asset, the better the position the club is in. Modeling their real estate acquisition model to 35% debt will be the least discussed component of the Solstice changes, but will be the most significant to the prosperity of the club.
Solstice Collection Announces Price Increase and Changes Membership Plans
Since their launch in 2004, Solstice has maintained near total market control of the ultra-luxury destination club sector. With the recent Yellowstone Club World closure, Solstice once again asserts their presence at the top of the destination club industry.
While each of the changes planned by Solstice may independently effect your decision to consider Solstice as a destination club option, each works together to ultimately raise membership satisfaction in the long run.
Suspend Signature Membership Sales
Nearly every destination club in the industry now offers multiple membership tiers for different price points and usage levels. The long standing occupancy metric "member-to-property" ratio has been used nearly since day one, showing how many homes a club has in relation to their membership base. The addition of these new membership plans with differing and usage rules diluted the member-to-property ratio metric.
The idea of a "full-member equivalent" was created to decipher the impact every member had on occupancy. A club sets a number of nights that their typical member would travel per year and uses that to weigh the member-to-property ratio. For example, if the club sets a full-member equivalent at 35 nights, it would take five members with seven nights of usage to equal one full-member equivalent. In the past, each of those five members would have counted as a member and subsequently made the member-to-property ratio seem higher than it actually was.
Solstice Collection's lowest plan, the Signature Membership, offered members 14 nights of annual travel for a $615,000 membership deposit and $34,000 in annual dues. Traditionally, the lower the amount of annual usage, the higher percentage of nights will be used. A member with 14 nights of usage is far more likely to use all of their nights than a member with 40 nights. With Solstice discontinuing their Signature Membership, occupancy rates will decrease as the membership with the highest percentage of use will be limited to current members.
By discounting their Signature level program, Solstice can more accurately publish their true member-to-property ratio and properly relay their true availability to prospective and current members.
Lower Member To Property Ratio
By more accurately stating their member-to-property ratio with the suspension of their Signature Membership and being able to count every member as a member, Solstice will also move to a targeted 5:1 member-to-property ratio. Solstice and Founder Graham Kos said "Over the last two years, many destination clubs have adopted the practice of fractionalizing memberships into even smaller increments. While this trend indeed drives membership volume, it negatively impacts a club's calendar due to a greater number of individuals competing for peak time." At this new ratio, Solstice will be the most exclusive club available and club properties would be available approximately 50% of the time. Graham stated that members want to be able to plan their luxury vacations in advance but also want the flexibility to enjoy the club's properties at the last minute.
Increased Membership Deposit
Providing for superior availability does come at a cost.
With the suspension of the Signature level on January 1, Platinum will increase from $975,000 to $1,125,000 and Sky will increase from $1,950,000 to $2,250,000. Solstice members can elect between two different membership options. Members can choose between receiving 100% of their initial membership deposit when they elect to resign or 80% of the future value of their membership. Other than the suspension of the Signature offering and a slight increase in annual dues, all other terms and usage will be unaffected by these changes.
Reduced Loan To Value Debt
Through the increase in membership deposits, Solstice is able to decrease their targeted level of debt from 40% to 35%. Currently they are operating at 33% but plan to acquire eight new homes in the next two years in Miami, St. Barts, and Rome to name but a few and will likely increase slightly with the new property additions.
By decreasing the debt on new home acquisitions, Solstice effectively strengthens the backing of their members' deposits. From Solstice's perspective, it also makes them less reliant on the credit markets for financing.
The Veras Group Perspective
These are bold moves by the Solstice Collection but are all positive steps for both short term membership satisfaction and long term business sustainability. We are glad to hear that Graham Kos and Jeff Scult both spoke with Solstice members multiple times prior to implementing these changes. At the Solstice Collection Advisory Board meeting on Monday of this week, members agreed that these were positive steps forward.
Any time a destination club can lower their debt and use more of your membership deposit towards the purchase of an appreciating asset, the better the position the club is in. Modeling their real estate acquisition model to 35% debt will be the least discussed component of the Solstice changes, but will be the most significant to the prosperity of the club.
Solstice Collection Announces Price Increase and Changes Membership Plans
Monday, October 13, 2008
Distinctive Holiday Homes Offers Upgrade Promotion | Destination Club News
Until the end of October, Distinctive Holiday Homes is offering new members a complimentary upgrade to the next membership plan and additional nights on nearly all of their offerings. This effectively allows nearly every Distinctive Holiday Homes membership an additional seven nights of usage.
A leader in the destination club industry, Distinctive Holiday Homes has one of the strongest portfolios of worldwide luxury vacation homes available to members. Members have access to luxury vehicles at many properties and a $500 per week food credit in addition to the club's global portfolio of vacation homes averaging over $3 million in some of the most sought after destinations including Fiji, New Zealand, Italy, and Hawaii.
Distinctive Holiday Homes offers members three different membership options; Individual, Corporate, and Pre-Paid Travel Cards. Each plan was specifically created to cater to unique subsets of the luxury travel demographic.
Individual Membership
For the family that travels, Distinctive Holiday Homes' most purchased membership falls under the Individual Membership umbrella. Distinctive Holiday Homes offers seven different membership types ranging from seven to 63 nights of annual usage. Once a member reaches their annual usage cap, they may continue traveling by paying a nightly fee ranging from $450 to $950 per night. Standard, Premium, Deluxe, and Platinum plan levels are all taking part in the current promotion. Members who join any of these club levels will get a complimentary upgrade to the next highest plan. Lite, the lowest membership plan, and Diamond and Elite, the two highest membership plans are not part of the incentive.
Members not only receive the additional nights of annual usage, but also receive all of the membership benefits of the club they are upgraded to. "It is a complimentary Membership upgrade," said Gina Guttuso from Distinctive Holiday Homes. "No strings attached." Members can receive more transferable days, lower costs for extra days, more advanced bookings, a larger reservation window, and more family nights during this incentive. This represents $33,000 to $66,000 in savings over the life of the membership.
Annual dues remain at the published rate of the club you joined prior to your complimentary upgrade for one year and then move to the cost of the club you are upgraded to. If a member elects to exit the club, they are refunded 80 percent of the amount they paid in or 100 percent if they elect to resign within the first year.
Corporate Membership
Designed for the corporation looking to use luxury travel as a corporate incentive, corporate members may allow virtually anyone to travel on their plan. Reward an over-producing sales executive for a strong quarter or help secure a new client, the choice is yours.
The current upgrade incentive allows new members who join at the Premium, Deluxe, or Platinum level to move up to the next highest plan. Much like the Individual Membership offering, all of the membership benefits are gained for the club you are upgraded to, allowing for more annual travel, greater advanced reservation windows, and lower additional nightly costs.
Annual dues will remain at the rate published for the club you joined for one year and then move to the rate of the club you were upgraded to.
Pre-Paid Travel Cards
For the luxury traveler who would simply like to prepay for their travels with no long term commitment, Distinctive Holiday Homes offers a Pre-Paid Travel Card. Available in Bronze, Silver, and Gold packages of 14, 21, and 28 nights respectively, members have four years to use their purchased nights. Pre-Paid Card holders can make reservations for up to two years in the future.
For new card members purchasing before the end of October, Distinctive Holiday homes will add an additional seven nights of land based property usage to each card level. This promotion totals $10,000 in savings and the additional seven nights of usage may not be used for Distinctive Holiday Home yacht travel.
In a letter to Distinctive Holiday Homes' prospects, the club states:
"Join others who have done the math and determined that a Membership to Distinctive Holiday Homes is a smart way to live a lifestyle of choice, especially in today's market. While the world is adjusting to some financial and economic headwinds, we are pleased to offer a deep reduction on our Membership Plans, which already make smart financial sense as it relates to lifestyle and value."
"People who enjoy luxury vacations have done the math on the destination club concept and it just makes sense: the financial benefits of Membership are as attractive as the lifestyle benefits of Membership."
Original Article
http://www.theverasgroup.com/index.php?pr=Destination_Club_News-Distinctive_Holiday_Homes_Offers_Upgrade_Promotion
A leader in the destination club industry, Distinctive Holiday Homes has one of the strongest portfolios of worldwide luxury vacation homes available to members. Members have access to luxury vehicles at many properties and a $500 per week food credit in addition to the club's global portfolio of vacation homes averaging over $3 million in some of the most sought after destinations including Fiji, New Zealand, Italy, and Hawaii.
Distinctive Holiday Homes offers members three different membership options; Individual, Corporate, and Pre-Paid Travel Cards. Each plan was specifically created to cater to unique subsets of the luxury travel demographic.
Individual Membership
For the family that travels, Distinctive Holiday Homes' most purchased membership falls under the Individual Membership umbrella. Distinctive Holiday Homes offers seven different membership types ranging from seven to 63 nights of annual usage. Once a member reaches their annual usage cap, they may continue traveling by paying a nightly fee ranging from $450 to $950 per night. Standard, Premium, Deluxe, and Platinum plan levels are all taking part in the current promotion. Members who join any of these club levels will get a complimentary upgrade to the next highest plan. Lite, the lowest membership plan, and Diamond and Elite, the two highest membership plans are not part of the incentive.
Members not only receive the additional nights of annual usage, but also receive all of the membership benefits of the club they are upgraded to. "It is a complimentary Membership upgrade," said Gina Guttuso from Distinctive Holiday Homes. "No strings attached." Members can receive more transferable days, lower costs for extra days, more advanced bookings, a larger reservation window, and more family nights during this incentive. This represents $33,000 to $66,000 in savings over the life of the membership.
Annual dues remain at the published rate of the club you joined prior to your complimentary upgrade for one year and then move to the cost of the club you are upgraded to. If a member elects to exit the club, they are refunded 80 percent of the amount they paid in or 100 percent if they elect to resign within the first year.
Corporate Membership
Designed for the corporation looking to use luxury travel as a corporate incentive, corporate members may allow virtually anyone to travel on their plan. Reward an over-producing sales executive for a strong quarter or help secure a new client, the choice is yours.
The current upgrade incentive allows new members who join at the Premium, Deluxe, or Platinum level to move up to the next highest plan. Much like the Individual Membership offering, all of the membership benefits are gained for the club you are upgraded to, allowing for more annual travel, greater advanced reservation windows, and lower additional nightly costs.
Annual dues will remain at the rate published for the club you joined for one year and then move to the rate of the club you were upgraded to.
Pre-Paid Travel Cards
For the luxury traveler who would simply like to prepay for their travels with no long term commitment, Distinctive Holiday Homes offers a Pre-Paid Travel Card. Available in Bronze, Silver, and Gold packages of 14, 21, and 28 nights respectively, members have four years to use their purchased nights. Pre-Paid Card holders can make reservations for up to two years in the future.
For new card members purchasing before the end of October, Distinctive Holiday homes will add an additional seven nights of land based property usage to each card level. This promotion totals $10,000 in savings and the additional seven nights of usage may not be used for Distinctive Holiday Home yacht travel.
In a letter to Distinctive Holiday Homes' prospects, the club states:
"Join others who have done the math and determined that a Membership to Distinctive Holiday Homes is a smart way to live a lifestyle of choice, especially in today's market. While the world is adjusting to some financial and economic headwinds, we are pleased to offer a deep reduction on our Membership Plans, which already make smart financial sense as it relates to lifestyle and value."
"People who enjoy luxury vacations have done the math on the destination club concept and it just makes sense: the financial benefits of Membership are as attractive as the lifestyle benefits of Membership."
Original Article
http://www.theverasgroup.com/index.php?pr=Destination_Club_News-Distinctive_Holiday_Homes_Offers_Upgrade_Promotion
The Risks and Benefits of Joining a New Destination Club
While the turbulent financial markets coupled with the non-launch of Diamante Residences and Vita Luxury's cancellation may keep some more perceptive and risk-averse members from joining a start-up destination club, there are also some strong reasons to consider doing so right now, as well. Here are some of the points to consider on both sides of the coin:
Superior Founding Member Benefits
All of the leading destination clubs started small at one point, and founding member benefits can be staggeringly compelling. Currently, founding members of the Botiga Destination Club, operating in Europe, receive two years of waived membership dues. Abercrombie & Kent Residence Club founding member benefits include additional time for family usage and expanded use of the club’s tours and other adventure travel. Typically, initial membership deposits and fees are much less, and may, in the case of Lusso Collection’s founding membership offers, include upside when members exit from the firm.
Lower Capital Access and Greater Financial Risk
On the other hand, new firms represent greater financial risk, as their business models are unproven and access to equity capital may be lower as well. Just ask members of the Portofino Destination Club, which filed for bankruptcy in 2008. The membership deposits of both new and existing destination clubs are ultimately backed by the club’s real estate holdings.Portofino’s leasing strategy, as well as their inability to attract outside capital, led the firm’s executives to re-leverage the company’s owned assets. When Portofino filed for bankruptcy, the company had no assets remaining.
Greater Influence on Club Development
One of the attractive benefits to joining a newer destination club is that, as a founding member, your opinions will necessarily translate into action much more quickly than at larger, more established firms. Young clubs are always looking for member feedback to shape everything from destination selections to usage policies. Many clubs offer roles on their Board of Advisors where you can directly interact with club executives to help shape the club moving forwards.
Growing Pains
As a founding member, expect to find some of the membership policies to be a bit incomplete. With much, if not all, of the club’s staff and executives new to the destination club industry, some policies such as reservation windows and advanced bookings may not be complete until the club can accurately gauge availability and usage patterns. As a founding member, you may see rule and policy changes as the club begins to better understand their members’ needs and travel patterns.
Executive Access
At smaller firms, it’s much easier to reach the decision-makers. Expect to have ready access to the CEO, Financial Officers, and other executives. In fact, smaller destination clubs may be comprised of few employees beyond these key officials. Staffing costs are one of the highest expenditures for destination clubs, and as new clubs begin to establish themselves in the industry, most clubs will exist solely with these employees until they see faster growth.
Fewer Destinations
One of the downsides of joining a younger destination club is the relatively lower number of homes available for travel. While it is important to consider how many properties you will actually travel to in your first year of membership (most members would do well to get to 5-6 different locations each year), at least 3-4 of those locations should have keen appeal for you.
Superior Access
While you will have fewer destinations to choose from as a founding member, you will also have fewer members competing for those residences. Many clubs launch with a robust selection of luxury vacation homes, dramatically beyond their published member to property ratio. Depending on your club’s growth, you will probably see at least one year of near-limitless access to the club’s portfolio of homes as the club seeks new members.
Investment Opportunities
Members of new destination clubs often act as investors in both the club and/or the club’s real estate. If you believe in the club’s business model, real estate, and forecasted growth rate, investing in a destination club can be a wise decision. One of the most crucial components of a new destination club is their capitalization. As firms seek to acquire capital for new homes and to cover ongoing expenses during their introductory phase, some may reach out to members rather than higher interest and more difficult to find equity capital.
Industry giants like Exclusive Resorts and Ultimate Escapes were once at the same point that Botiga, Grand Resort Properties, or Moncasa Caribbean Experience are now. Through sound operating policies, savvy real estate purchases, and a satisfied referral-generating membership base, these clubs have established themselves as power players in the industry.
If you believe in the club and its business model, joining an emerging destination club can allow you to capitalize on founding membership benefits and enjoy unforgettable luxury vacations for the life of your membership. If you are concerned about the club’s sustainability and would rather trade potentially stronger benefits for security of your membership deposit, watching and waiting is probably the best decision.
Original Article
http://www.theverasgroup.com/index.php?pr=Destination_Club_News-Benefits_and_Risks_of_Joining_a_New_Destination_Club
Superior Founding Member Benefits
All of the leading destination clubs started small at one point, and founding member benefits can be staggeringly compelling. Currently, founding members of the Botiga Destination Club, operating in Europe, receive two years of waived membership dues. Abercrombie & Kent Residence Club founding member benefits include additional time for family usage and expanded use of the club’s tours and other adventure travel. Typically, initial membership deposits and fees are much less, and may, in the case of Lusso Collection’s founding membership offers, include upside when members exit from the firm.
Lower Capital Access and Greater Financial Risk
On the other hand, new firms represent greater financial risk, as their business models are unproven and access to equity capital may be lower as well. Just ask members of the Portofino Destination Club, which filed for bankruptcy in 2008. The membership deposits of both new and existing destination clubs are ultimately backed by the club’s real estate holdings.Portofino’s leasing strategy, as well as their inability to attract outside capital, led the firm’s executives to re-leverage the company’s owned assets. When Portofino filed for bankruptcy, the company had no assets remaining.
Greater Influence on Club Development
One of the attractive benefits to joining a newer destination club is that, as a founding member, your opinions will necessarily translate into action much more quickly than at larger, more established firms. Young clubs are always looking for member feedback to shape everything from destination selections to usage policies. Many clubs offer roles on their Board of Advisors where you can directly interact with club executives to help shape the club moving forwards.
Growing Pains
As a founding member, expect to find some of the membership policies to be a bit incomplete. With much, if not all, of the club’s staff and executives new to the destination club industry, some policies such as reservation windows and advanced bookings may not be complete until the club can accurately gauge availability and usage patterns. As a founding member, you may see rule and policy changes as the club begins to better understand their members’ needs and travel patterns.
Executive Access
At smaller firms, it’s much easier to reach the decision-makers. Expect to have ready access to the CEO, Financial Officers, and other executives. In fact, smaller destination clubs may be comprised of few employees beyond these key officials. Staffing costs are one of the highest expenditures for destination clubs, and as new clubs begin to establish themselves in the industry, most clubs will exist solely with these employees until they see faster growth.
Fewer Destinations
One of the downsides of joining a younger destination club is the relatively lower number of homes available for travel. While it is important to consider how many properties you will actually travel to in your first year of membership (most members would do well to get to 5-6 different locations each year), at least 3-4 of those locations should have keen appeal for you.
Superior Access
While you will have fewer destinations to choose from as a founding member, you will also have fewer members competing for those residences. Many clubs launch with a robust selection of luxury vacation homes, dramatically beyond their published member to property ratio. Depending on your club’s growth, you will probably see at least one year of near-limitless access to the club’s portfolio of homes as the club seeks new members.
Investment Opportunities
Members of new destination clubs often act as investors in both the club and/or the club’s real estate. If you believe in the club’s business model, real estate, and forecasted growth rate, investing in a destination club can be a wise decision. One of the most crucial components of a new destination club is their capitalization. As firms seek to acquire capital for new homes and to cover ongoing expenses during their introductory phase, some may reach out to members rather than higher interest and more difficult to find equity capital.
Industry giants like Exclusive Resorts and Ultimate Escapes were once at the same point that Botiga, Grand Resort Properties, or Moncasa Caribbean Experience are now. Through sound operating policies, savvy real estate purchases, and a satisfied referral-generating membership base, these clubs have established themselves as power players in the industry.
If you believe in the club and its business model, joining an emerging destination club can allow you to capitalize on founding membership benefits and enjoy unforgettable luxury vacations for the life of your membership. If you are concerned about the club’s sustainability and would rather trade potentially stronger benefits for security of your membership deposit, watching and waiting is probably the best decision.
Original Article
http://www.theverasgroup.com/index.php?pr=Destination_Club_News-Benefits_and_Risks_of_Joining_a_New_Destination_Club
Wednesday, October 8, 2008
Vita Luxury Destination Club Closes | The Veras Group
Vita Luxury, a self proclaimed “Destination Club 2.0,” is no longer in operation. E-mails were bounced back and phones at Vita Luxury were not operational. Their website design firm confirmed “They have moved their offices to the Bahamas and currently are not active with Vita Luxury. There are no contact numbers for Vita at this time as they are focused on other ventures.”
Vita Luxury claimed to have several very satisfied members that wrote glowing reviews and engaged in podcasts proclaiming their delight with Vita Luxury’s services and amenities, all despite the fact the club published that they would launch at the end of 2008. This “non-launch” joins Diamante Residences’ canceled launch as another new firm unable to make a start in the destination club industry. The Vita Luxury members providing these reviews posted only once each and have not been heard from since.
The club claimed to provide a wide spectrum of amenities, including guaranteed availability of residences, professionally trained butlers, maids, drivers, and chefs, an on-demand airfleet available 365 days per year at greatly reduced rates, and access to luxury watercraft and cars. Members could resign and rejoin the club whenever they wished by paying a registration fee of either $10,000 or $20,000 depending on their membership plan. Also based on their membership plan, members would pay a flat day rate to access the club’s properties.
Unfortunately, a staple throughout the Vita Luxury website is the company disclaimer: “Images and descriptions of Vita estates, Vita suites and resorts included within this website are examples of properties that may be used by Vita members or are comparable quality and style properties and accommodations. Vita retains the right to amend or alter any of the Vita locations at any time in its sole discretion.” Members paid $1,500 per hour for charter jet services, enough to pay for the fuel costs, landing and related fees. Pilots were complimentary. Similar fares for private jet travel are four times that what Vita Luxury charged. Watercraft would be stocked and ready to go at beach properties. Bentley Arnages and Flying Spurs would be at select Vita Luxury residences. Executive SUVs would be used for mountain residences. In resort locations, Vita kept a “fleet of limousines that will gracefully allow you to explore every destination or travel between destinations and ensure your schedules are always adhered to.” Your luxury driver remained on call 24 hours a day to whisk you off to wherever you wished.
From the Vita Luxury Frequently Asked Questions, “We have all heard the adage ‘Too good to be true,’ and typically we would agree. So what’s the catch with Vita? Well, we can’t find it and we challenge you to try us and see if you can find it yourself.”
The catch was Owner Thanos Papalexis left a trail of creditors in his wake between Vita Luxury, a former club called Grand Legacy Club, and other similar club ventures. Over $2 million in court judgments were awarded to parties suing Privee International, a previous venture, and Mr. Papalexis. Both Papalexis and business partner at Grand Legacy Club, Daniel Gorman, have past legal problems involving fraud. Gorman plead guilty to defrauding the Florida Citrus Commission out of $85,000 prior to his involvement with Grand Legacy. Scott Phillips, a vendor for Grand Legacy Club who supplied charter jet services said, “The guy is broke and can’t pay his bills,” speaking about Papalexis. “He was trying to use this airplane as part of his smoke and mirrors routine to lure investors.”
Vita Luxury employees don’t speak much better of the firm. “Vita Luxury and its owner Thanos Papalexis is/are complete frauds. Their website is a complete fraud. They own no homes, no cars, no boats, and no airplanes. Many of us had to leave because they ran out of money,” published a Vita Luxury employee, adding “What a scam.”
Industry insiders and consumers alike questioned the Vita Luxury business model since their public launch announcement. Thanks to organizations like the DestinationClubForums, there has been a continued vigilance by most destination clubs to be more forthcoming about services available to members and pricing structures. The Destination Club Association has also made headway in defining stable operating benefits, to which many of the leading firms adhere, including Exclusive Resorts, Ultimate Escapes, Quintess, Solstice Collection, High Country Club, Lusso Collection, and Abercrombie & Kent Residence Club.
Nonetheless, joining a destination club continues to be a time consuming and complicated process. If you would like to learn more about the destination club industry, please contact The Veras Group, your complimentary resource for destination club news and advising.
The Veras Group is the only unbiased destination club news, consulting and brokerage firm. As our client, we accompany your destination club 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 destination 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 http://www.theverasgroup.com/.
Join us: we know the way.
Vita Luxury Destination Club Closes Destination Club News
Vita Luxury claimed to have several very satisfied members that wrote glowing reviews and engaged in podcasts proclaiming their delight with Vita Luxury’s services and amenities, all despite the fact the club published that they would launch at the end of 2008. This “non-launch” joins Diamante Residences’ canceled launch as another new firm unable to make a start in the destination club industry. The Vita Luxury members providing these reviews posted only once each and have not been heard from since.
The club claimed to provide a wide spectrum of amenities, including guaranteed availability of residences, professionally trained butlers, maids, drivers, and chefs, an on-demand airfleet available 365 days per year at greatly reduced rates, and access to luxury watercraft and cars. Members could resign and rejoin the club whenever they wished by paying a registration fee of either $10,000 or $20,000 depending on their membership plan. Also based on their membership plan, members would pay a flat day rate to access the club’s properties.
Unfortunately, a staple throughout the Vita Luxury website is the company disclaimer: “Images and descriptions of Vita estates, Vita suites and resorts included within this website are examples of properties that may be used by Vita members or are comparable quality and style properties and accommodations. Vita retains the right to amend or alter any of the Vita locations at any time in its sole discretion.” Members paid $1,500 per hour for charter jet services, enough to pay for the fuel costs, landing and related fees. Pilots were complimentary. Similar fares for private jet travel are four times that what Vita Luxury charged. Watercraft would be stocked and ready to go at beach properties. Bentley Arnages and Flying Spurs would be at select Vita Luxury residences. Executive SUVs would be used for mountain residences. In resort locations, Vita kept a “fleet of limousines that will gracefully allow you to explore every destination or travel between destinations and ensure your schedules are always adhered to.” Your luxury driver remained on call 24 hours a day to whisk you off to wherever you wished.
From the Vita Luxury Frequently Asked Questions, “We have all heard the adage ‘Too good to be true,’ and typically we would agree. So what’s the catch with Vita? Well, we can’t find it and we challenge you to try us and see if you can find it yourself.”
The catch was Owner Thanos Papalexis left a trail of creditors in his wake between Vita Luxury, a former club called Grand Legacy Club, and other similar club ventures. Over $2 million in court judgments were awarded to parties suing Privee International, a previous venture, and Mr. Papalexis. Both Papalexis and business partner at Grand Legacy Club, Daniel Gorman, have past legal problems involving fraud. Gorman plead guilty to defrauding the Florida Citrus Commission out of $85,000 prior to his involvement with Grand Legacy. Scott Phillips, a vendor for Grand Legacy Club who supplied charter jet services said, “The guy is broke and can’t pay his bills,” speaking about Papalexis. “He was trying to use this airplane as part of his smoke and mirrors routine to lure investors.”
Vita Luxury employees don’t speak much better of the firm. “Vita Luxury and its owner Thanos Papalexis is/are complete frauds. Their website is a complete fraud. They own no homes, no cars, no boats, and no airplanes. Many of us had to leave because they ran out of money,” published a Vita Luxury employee, adding “What a scam.”
Industry insiders and consumers alike questioned the Vita Luxury business model since their public launch announcement. Thanks to organizations like the DestinationClubForums, there has been a continued vigilance by most destination clubs to be more forthcoming about services available to members and pricing structures. The Destination Club Association has also made headway in defining stable operating benefits, to which many of the leading firms adhere, including Exclusive Resorts, Ultimate Escapes, Quintess, Solstice Collection, High Country Club, Lusso Collection, and Abercrombie & Kent Residence Club.
Nonetheless, joining a destination club continues to be a time consuming and complicated process. If you would like to learn more about the destination club industry, please contact The Veras Group, your complimentary resource for destination club news and advising.
The Veras Group is the only unbiased destination club news, consulting and brokerage firm. As our client, we accompany your destination club 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 destination 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 http://www.theverasgroup.com/.
Join us: we know the way.
Vita Luxury Destination Club Closes Destination Club News
Friday, October 3, 2008
The Veras Group's Destination Club Forecast
Lehman Brother’s recent bankruptcy filing sent shockwaves through the heart of Wall Street and may soon have an impact on the destination club industry.
Lehman Brothers’ bankruptcy joins major changes at AIG, Goldman Sachs and Morgan Stanley, causing drastic market swings on Wall Street and an unsure financial market. In the destination club realm, Ken May, James Millership and Bob Burch, the executives of the conservation focused destination club Everlands, may have been watching the market closest. Lehman Brothers served as both financiers and investors in the ultra-luxury destination club. An Everlands Life spokesperson indicated that their firm was “doing great” despite the Lehman Brothers bankruptcy and declined to make any further comment on the topic. Phone calls to their PR agency were not returned.
Due to the possibility of a slower growth period in the coming months, The Veras Group predicts a shake out period in the near future for destination clubs. Expect a few smaller clubs to merge with one another, as well as acquisitions by larger, more established clubs. Undercapitalized start-up clubs will have difficulty making headway as evidenced by the Diamante Residences cancelled launch. Expect other similarly sized firms to fade out of the industry just after their launch. While we don’t anticipate any major changes before the end of the year, destination clubs typically post stronger sales in Q4, coinciding with year-end sales promotions. Expect to hear merger and acquisition news by Q1 of 2009.
As noted in our recent article “How Destination Clubs Fare in a Slow Real Estate Market,” the current economic climate is advantageous for well capitalized firms to make positive jumps. Expect to see one to two clubs with strong financial backing to acquire quality real estate at well under the market rates of several years ago. Those more highly capitalized clubs will also weather the economic storm, as will those clubs purposefully designed for slower, steadier growth.
These market conditions reinforce the necessity for strong due diligence when looking at destination clubs and fractional ownership options. The Veras Group serves as your destination club consulting and brokerage firm. As our client, we accompany your destination club 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 destination 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 The Veras Group website.
Join us: we know the way.
Lehman Brothers’ bankruptcy joins major changes at AIG, Goldman Sachs and Morgan Stanley, causing drastic market swings on Wall Street and an unsure financial market. In the destination club realm, Ken May, James Millership and Bob Burch, the executives of the conservation focused destination club Everlands, may have been watching the market closest. Lehman Brothers served as both financiers and investors in the ultra-luxury destination club. An Everlands Life spokesperson indicated that their firm was “doing great” despite the Lehman Brothers bankruptcy and declined to make any further comment on the topic. Phone calls to their PR agency were not returned.
Due to the possibility of a slower growth period in the coming months, The Veras Group predicts a shake out period in the near future for destination clubs. Expect a few smaller clubs to merge with one another, as well as acquisitions by larger, more established clubs. Undercapitalized start-up clubs will have difficulty making headway as evidenced by the Diamante Residences cancelled launch. Expect other similarly sized firms to fade out of the industry just after their launch. While we don’t anticipate any major changes before the end of the year, destination clubs typically post stronger sales in Q4, coinciding with year-end sales promotions. Expect to hear merger and acquisition news by Q1 of 2009.
As noted in our recent article “How Destination Clubs Fare in a Slow Real Estate Market,” the current economic climate is advantageous for well capitalized firms to make positive jumps. Expect to see one to two clubs with strong financial backing to acquire quality real estate at well under the market rates of several years ago. Those more highly capitalized clubs will also weather the economic storm, as will those clubs purposefully designed for slower, steadier growth.
These market conditions reinforce the necessity for strong due diligence when looking at destination clubs and fractional ownership options. The Veras Group serves as your destination club consulting and brokerage firm. As our client, we accompany your destination club 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 destination 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 The Veras Group website.
Join us: we know the way.
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