Destination Clubs Explained

Destination clubs are the fastest growing segment of the luxury travel market. Members share a portfolio of fully furnished, multi-bedroom homes in locations around the world.

Members pay an upfront deposit and annual dues for exclusive access and five-star service. Destination club memberships are essentially a hybrid solution that combines the best aspects of the four primary high-end vacation alternatives.

Ten Reasons to Consider Destination Clubs

1. Cost-effective alternative to luxury hotels, villa rentals, fractional residences, and second home ownership.
2. Multi-location benefits
3. No maintenance hassle and expenses
4. Exclusive access to luxurious residences
5. Three to five bedroom homes apt for larger groups
6. Guaranteed access for a given number of days in a year
7. Same high-end service of luxury resorts
8. Concierge services for travel planning purpose
9. Privacy
10. Top-of-the-line furnishings

Typical Prices

Destination club fees span a wide continuum, with most clubs charging membership fees ranging from $300,000 to $500,000. Clubs can actually be cheaper than luxury hotels and high-end rentals. We created an Excel model to convert deposits and dues into a nightly cost for every leading destination club. Read more »

Even when factoring in real estate appreciation, destination club membership is comparable to owning a vacation home. Our discounted cash flow analysis compares the two options over a ten-year horizon.

Know the Numbers

With membership deposits ranging from $30,000 to $3 million, consumers must be assured that the club they’re joining is one they can enjoy for years and that they will receive the refundable portion of their deposit back if they choose to leave. Most clubs commit to using membership deposits to acquire real estate or to be held as a cash reserve, while the non-refundable portion of the deposit and annual dues should cover operating expenses.

Due Diligence

1. How many residences are owned and opened?
2. What is the average size of the homes?
3. What is the member growth from the previous year?
4. Is there a waiting list to resign?
5. What is the average time it takes to refund a member deposit?
6. Can the club provide audited financial statements?
7. What percentage of the homes in the portfolio is leased versus owned?
8. What percentage of the purchase price of the home was financed?
9. Are there any pending lawsuits against the club?
10. Do members receive any guarantee of availability for peak periods?