ChicagoMark

Well said! He's made his decision and we've made ours. His reiterating why he left again isn't going to change our minds.

DCTraveler

I think it's a good comment by DC Skeptic. I am so surprised that people don't want to entertain both sides of the equation. It's always good to see if a decision you previously made is still right for you and also to evaluate if the original considerations or terms have changed.

DC Skeptic

I understand your point to a degree. But why does anyone post anything if the only criteria is to be a happy current member of a DC? Or is this the DC Fan Forum? I only post to help anyone who may be wrestling with issues inherent in this industry. Because as someone who has listened to the promises, looked at the financials, and spent two and a half years inside a club as both a member and advisor I feel I have something to offer to two constituencies (a) those who are thinking of joining and are trying to get past the facts that yes, the vacations are great, but are also trying to understand the business model, and (b) those like myself who joined with one set of expectations that may not have been met and are reassessing their membership. This is a very dynamic industry. Unfortunately due diligence is an ongoing exercise (or should be). And there is an extraordinary level of trust required. What did Reagan say? "Trust but verify"?

Honestly, there is no reason for me to comment on anything; you are right in that I have left PE/UE. I am only trying to help with a more skeptical perspective; there is no shortage of DC advocates here so I am trying to provide a little balance. And while I appreciated Jim answering questions his answers did set off a few alarms that I felt might not be obvious to someone who wasn't inside the club or didn't have the experience I had getting out. That's all; trying to be helpful.

DestiFan

I appreciate the dialogue - just saying that I, for one, understand the model risks....so it gets old hearing about them. I think it is valuable for the newbies, however.

Desties

I agree with you on the point about availability, and posted that concern earlier in this thread. I also am all for having folks with contrarian opinions on DCs here, because it is important for everyone here -- existing or prospective members -- to see both sides. Thank you for staying.

However, I'll tell you why I don't necessarily agree with that last statement. It is contradictory. If UE wants to get rid of legacy memberships -- and clearly Jim says that they will honor the contracts -- because they get a better deal than old UR and new UE members, why would they be the ones to bolt?

I have always been concerned about the T&H side of UR, but it's actually a near-term blessing. The reason why Jim has that 99% renewal rate, has to be -- in part -- because the T&H members that make up the majority of UE members from the UR side, have a financial incentive to stick around for at least another three years, and an even greater monetary incentive to stick around for at least another five years. That will keep the exit lines in check, for now at least.

Now let's flash forward to UE circa 2013. In recent months, clubs like HCC, Lusso, and ER have all raised their initial deposits. How many times will UE have upped its new member deposits between now and then? Forget today's soft real estate market and knee-buckling economy. That will be history in a year or two, perhaps. The point I am trying to make is that unloading legacy members at 100% of their initial deposits will probably be far less costly than letting go the members that sign up today at 80% of the future value (with the exception of the more recent legacy members that are also at 80% of the future value). In other words, it will be a more economically feasible option for legacy members to convert to UE in the future (as of now, it's not).

So this tricky balance of PE and UR in becoming UE is actually quite perfect. Both sides have very good reasons to stick around for the next few years, and the club will -- hopefully -- be much larger in five years to the point where us early adopters won't move the needle if we stay or go.

UE is now able to position itself as a thinking man's -- or dare I say, poor man's -- version of ER, just as HCC has had great success as the attractively-priced alternative to more conventional DCs. I get giddy as a goat when I see ER hiking its rates or dropping the refundable % of deposits for new members, because that gives UE more wiggle room in the future.

I'll be honest. I'm surprised that ER is doing so well in growing given the perpetual screw-twisting, but I guess that's also a selling point, with new members knowing that they can count on getting a better deal than those signing on in the future.

DC Skeptic

The point here is "legacy memberships" not "members" so if you are willing to move to a UE plan then my point doesn't hold. Jim makes this comment in DC4MS's original post:

The reason you might bolt despite an ostensibly better plan is if the availability changes dramatically or if the services offered change dramatically, say for example Platinum daily cleaning. I think UE has several very good business reasons to see legacy PE members shift to UE contracts so while they will honor the contracts don't be surprised to see subtle or not so subtle forms of "persuasion", that's all.

DC4MS

I certainly don't want to get into the debate of PE legacy vs current UE plans as that is a personal decision that will depend on the individual traveler.

I think it is safe to say that some members will be better off keeping what they have, some will be better off upgrading to a higher plan, and the majority will probably be best switching to the new UE Gold plan.

Legacy members should know that a merger is a double edge sword and that their original contracts may not have the nice perks of the new UE club like access to the UR homes, T&H homes and even VE homes.

The best advice would be for PE legacy members to call UE to review their previous travel patterns to determine what is the best course of action for themselves.

Desties

Yikes. Did Jim actually say that? I have always assumed that legacy members will have to go without some of the UR/new UE perks like the exchanges into the hotel collection or expeditions but not held out of the actual UR and future UE properties. It's hard to fathom Rich Keith signing off on that.

I hadn't grasped the incentives to convert to the new UE gold plan as originally implied. Substantially higher annual fees. More restrictive usage and reservation policies. A near-term hit on the initial deposit (i.e. for Signature, going from 100% on $200k to 80% of $205k).

However, barring the PE members from the UR properties would be likely to result in a wave of resignations instead of conversions. How can it not? The merger no longer becomes a two-way street if PE members give up availability on their properties to UR/new UE members without anything in return. The number of existing PE properties is actually also shrinking (for Premiere, Lake George, for Signature, Trump moving down to Premiere, for Pinnacle, the loss of Charleston over zoning), and that is something that happens at every club as new homes gradually replace older ones that are sold off.

PE members aren't captive like scorched T&H members with financial incentives to stick around for 5-7 years or walking away with nothing. If honoring the original contracts means tightening availability on a dwindling number of properties, that would be a deal breaker for some, if not many, PE members who had the faith and vision to jump in as early adopters into the DC club concept several years ago but now have to start anew under the 2008 terms of a new club.

In short, I can't see this happening at all.

Sandman

That is not happening at all. As a legacy PE member, I have a reservation at an old UR property and several old UR properties are now in Premiere where there are no pre-merge UR members. I don't see the incentive to convert...

governor

Excluding people from the legacy UR or T&H properties is a non-starter to me. Not only specific to UE, but sets a non-starter precedent for all future DC consolidations. Me personally, I would resign UE and never join any DC again if this happened. It makes it clear how these these membership contracts are one-way streets. Binds members but provides clubs with sufficient latitude to do that. What's the point of a contract and a merger if that's allowed? I hope Jim and company know how tenuous of a path this is. Once you enflame members with that kind of end-around it's hard to retract the policy and expect things to be the same.

Desties

Exactly. That's why I doubt that it will come to that. Hopefully we'll know more once the introductory packets to PE members go out next week.

Offering shinier carrots will work a whole lot better than tightening screws if UE wants an orderly migration process.

I trust Jim will do the right thing. The T&H acquisition worked well for UR because Jim offered T&H members more for sticking around. The flat conversion from PE legacy to Ultimate at the Gold level would be offering less. We all made our decisions to join PE 1,2, or 3 years ago -- when the UR plan was more economically feasible than it was today -- and we still chose PE over UR. UR may not have even been a 2nd or 3rd choice at the time.

It's why I expect sweetened pots instead of souring down what we currently have. Until proven otherwise, I have faith in Jim to do the right thing.

DC4MS

I am NOT 100% certain if PE legacy members can use 100% of the UE current benefits, perhaps a member can contact UE for an exact ruling. Perhaps my statement only applies to the hotel collection.

I just was implying that just because UE offers something and you are a legacy PE member (under the original contract) then there is a reasonable expectation that some type of limitation may result if you don't convert to the UE plans...of course, I may be wrong and there will be no difference.

I don't recall the exact scenario where Jim explained to me that it makes sense for the "average" PE legacy member to convert to the UE Gold plan. It was a long interview and I tried not to include any "reading between the lines" into my report.

Jim did NOT tell me that there are any "specific" limitations at all on PE legacy members, he simply indicated to me that there was compelling reasons that members should convert, but all original contracts will be honored.

I would like to request a PE legacy member to call UE and ask about this topic and post your results here.

Sandman

I haven't called. I'll may try during the day, but when I was joining the implication I got was that the benefit we may not be eligible for was the hotel collection. All the rest should be fine.

DCTraveler

I think it has been carefully worded on multiple occasions by PE to imply that it has been a generous gift to "let" us use the book and utilize UR properties before converting to a UE plan, which makes me still fear that if we don't convert PE legacy members we won't. The real problem with that is for Pinnacle members having 6 homes, but if you take away Charleston (zoning), Watercolor (leased with option, but market dropped so much it's worth less than the Platinum home) and Abaco (leased, but so many problems with management, probably won't purchase), they would be down to NYC, Deer Valley and Cabo -- not many choice there given you can now get a 2 bedroom at Platinum and the Cabo home at Platinum is comparable.


The only carrot at that may be reasonable is is the use of the hotel properties, but I still don't buy it because the UR members gained an entire reciprocity program which expanded their original portfolio. Anyone from legacy UR that can tell us what you are hearing, do you have to convert, is it favorable, what is the timing?

willmyclubmakeit