Levi Moe

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 as well, 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. As much, if not all, of the club's staff and executives will be 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 rules 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.

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.

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 and other second home ownership alternatives.

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 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.

Original Article:
http://www.theverasgroup.com/index.php?pr=Destination_Club_News-The_Veras_Group_Destination_Club_Forecast

Looked into destination club membership? You are part of a small, but growing, group. Thought about Corporate Memberships? Even smaller.

Many destination clubs offer Corporate Membership options, and so far, the idea hasn't widely caught on yet. As opposed to more traditional "Individual or Family" plans offered by destination clubs, wherein you and your family must be in residence during your travels, Corporate Membership plans allow you to designate nearly anyone to use your membership. The membership deposit and annual dues of Corporate Memberships are typically higher than the other formats, partly to account for the increase in traveling members. For the most part, though, the benefits of corporate structures simply haven't been widely marketed. Those who have used their membership for business purposes, though, know how valuable it is.

Employee/Executive Benefits

Whether to hire a sales superstar or a critical new executive, just one fully catered trip a year can be a stunning benefit to an employee. For a total cost per night, including opportunity cost, starting at $460 per night (less than $3,000 for a 7 day/6 night gift trip) at the High Country Club, any employee can feel motivated, appreciated, and sign on with your firm rather than the competition.

Higher level memberships can run in the $1,000s to $1,500s per night, but even this level adds up to less than $10,000 for an annual, spectacular trip, after which your business partner, senior executive, or even administrative assistant will think you walk on water.

Sales/Operations Incentives

Looking for a new way to get the most from your sales team? Or a quarterly bonus that will help drive higher customer service? A three-night/four day trip to Mexico, skiing in Colorado, or New York is a great way to motivate your team. If you want a prime time, book the trip further in advance and make sure the dates are well-publicized within your company.

Corporate Retreat

With many destination club homes able to accommodate eight or more people, and some clubs allowing usage at more than one home in the same destination at the same time, a Corporate Membership can make for a great way to put your team together. Even a quick getaway can renew everyone's imagination, build your team's cohesiveness, and brainstorm company initiatives in some of the most relaxing environments the world has to offer.

Client "Thank You"

For those special clients whose business is invaluable, a gift week is an equally special way to say thank you. For much less than the cost of acquiring new clients, you can retain those old ones whose business makes your successful.

Tax Benefits

While you should consult your tax advisor on the structure and legality of what can be written off and what cannot, a destination club membership being used for business purposes likely constitutes a legitimate business expense. This can represent substantial savings to you, and help justify the purchase as well.

For questions on the corporate membership options available and which destination clubs are offering this type of membership, please contact The Veras Group at 877-VERAS-07 or see our website www.theverasgroup.com.

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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.