Travel club

The concept of a destination club was introduced in 1998, when Rob McGrath, a veteran of the luxury timeshare development business, launched Private Retreats. Since then, more than 30 companies have launched clubs targeting affluent families that want the benefits of second home ownership, but with more flexibility and choice in where they vacation each year. Inspirato with American Express is the world's largest destination club.

By joining a destination club, a member gains access to a collection of vacation homes in various locations around the world in exchange for a one-time membership fee and annual membership dues. Consistent with other vacation options, inventory can be booked based on availability. Some clubs allow members to purchase different membership-types which offer different levels of reservation priority, personalized services and resort amenities such as beach clubs, luxury spas and private chefs.

Benefits and access privileges vary by club. Here is a list of those offered by most clubs:

While there are several variations, the basic choices are between equity, non-equity and next-generation clubs that defy the standard models. This is similar to the membership model choices at country clubs. In all models, club members provide an up-front sum and an annual fee though the exact amounts vary significantly by club-type.

Non-Equity Club Model - In non-equity clubs, members enjoy the hospitality benefits of the club, but don’t own an interest in the homes and so are not impacted by the real estate appreciation or losses of the club's residence portfolio. The up-front payment is a deposit, and traditionally when they resign from the club, members receive 75% to 100% of that deposit back. However, in recent years, non-equity clubs have gotten away from refunds.

Equity Club Model - With equity clubs, the up-front payment can be considered an investment of sorts (or at least a reduction in the opportunity cost of making the up-front payment), subject to typical investment risks. When exiting the club, the refund of that fee is adjusted to reflect changes to the value of the home portfolio or in the fee for new members. Various clubs have different ways of providing this benefit. Also, with an equity club, the members own the club's real estate portfolio, which provides additional security of the membership deposits.

Managed and Controlled Club Model - During the real estate boom of the 2000s the equity model had appeal because members could benefit from the rapid appreciation of real estate assets. The economic changes between 2008-2011 resulted in innovation within the destination club marketplace and has provided more options for luxury travelers. The travel product and services available to members through a managed and controlled model are consistent with equity and non-equity clubs, but, because this model hinges on the club long-term leasing the properties in its portfolio as opposed to owning them, the cost of membership is significantly lower. Typically, members pay an up-front membership fee and an annual renewal fee and do not gain equity or appreciation. Members gain access to a portfolio of residences and members are able to book travel by paying below-market, members-only nightly rates as they travel. Unlike traditional equity-based travel clubs, travel clubs of this variety do not require a long-term commitment nor do members have to join a waiting list if they wish to revoke their membership.

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Wikipedia