DC4MS

DestinationClubForums.com is proud to announce the release of their new LUSSO - Comprehensive Membership Analysis Tool (version 1.0).

Rather than create a single Excel spreadsheet template that encompasses every Destination Club, we decided to focus our efforts on creating the ultimate membership analysis tool for individuals considering membership in LUSSO as there are many unique variables that are unique to this club.

The Excel spreadsheet templates has all the LUSSO membership fees and options already entered and users can manipulate several variables and observe the immediate changes in the variety of reporting categories. This single file will work with all versions of Microsoft Excel.

There are two different worksheet tabs to allow different forecasts for a variety of purposes depending on the individual opinion on the value of the cost of capital for membership. There are several situations where this may or may not be beneficial. In addition, the annual dues are FIXED to the May 2008 rates, are not increased, even though they may increase yearly due to inflation.


The First worksheet tab (LUSSO Membership Analysis) is the simplest and cleanest layout as it presents data to an individual that is not interested in factoring any capital costs for the membership fees. This analysis only requires user input for the "Duration of Membership and the "Individual Membership anticipated usage." The Total membership fees required (including first year dues) summarizes the initial cost to join LUSSO.

The Second worksheet tab (Capital Costs) is more complex as it presents data to an individual that is interested in factoring capital costs for the membership fees and this rate is Compounded Annually. This analysis requires user input for the "Capital Costs" along with the "Duration of Membership" and the "Individual Membership anticipated usage."

Please download this file, experiment with the variables, and post your opinion, observations, problems, bugs, or suggestions here.

want2travelmore

The approach is straightforward and easy to use and I didn't spot any formula, miscues (I didn't proof every formula). Nice work! In terms of the two spreadsheet approaches:

I personally have never followed the reasoning that you'd ignore the cost of capital because the member deposit is just somehow immaterial to the lifestyle, lifetime travel decision. Someone who is not cost sensitive to the membership deposit component of the decision to join a destination club because they know what they want, and they consider the deposit somehow different than annual dues can use any internal decision making model they want, of course - their life, their approach. Yet the various discussions and calculations provided throughout this Forum to come up with a cost per night of various DCs really have one purpose: to compare DCs and other substitute DC travel choices in terms of costs alone (with a variety of other factors to consider: property and destination quality, quantity, other services, reservation rules and member to property availability, financial stability and growth of the DC). But if you want to evaluate or discuss comparative cost per night - if you don't include all the costs, to me the comparison is a waste of time.

One missing factor in the spreadsheet that is disclosed, is it doesn't reflect any assumption in the increase in annual dues, which we all know will go up. I think the reasoning there is that any club will have some increase in dues, so as of today's cost is pretty close to fair, but of course the higher the starting baseline dues per night for a given DC, the greater in $$, versus %, will be the impact on cost per night over a lifetime of member use, even if you assume rates of increases in dues for all DCs will over a long period be about the same.

What do the members think of taking a net present value approach to the analysis? To me that approach is the great equalizer because it takes into account the time and dollar-weighted total DC club decision costs on a full apples-to-apples basis with possibly one exception. The exception is if you wanted to quantify the value of someone's time either due to the reservation convenience of a club (a seasoned member isn't going to have to research destination choices and saves time from club pre-travel or in-travel services). But the cost of a person's time is more readily done as comparative among choices based on perceived or researched differences among clubs for these time-saving services or features - so part of the qualitative choice evaluation.

Do any Forum members have hard or even approximate data on the average rate of annual dues increases among various DCs? That would be a great research article for Halogen or Sherpa. I don't think the information is readily available.

As an aside, when Exclusive Resorts was selling me, one of the turnoffs was when I asked about what their rate of dues increases was running historically. I was told (1) "I'm not going to get into that discussion" and (2) "if you are that concerned about costs, maybe this club isn't a good fit for you." I guess this was luxury goods sales approach where you are supposed to feel special about the "privilege" of being allowed to buy something. That approach has always turned me off big time, and I dropped serious discussions with ER from that point on.

LTTravel

I tried to get all that information together and got some of it together on a thread on TUG. Besides the annual dues increase, the other important factor is the dues increase without limits. Several of the DC's have a time period at which the yearly dues can be adjusted to "market level" Again, this is discussed in the TUG thread. I was hoping that all the blanks would be filled but we were able to get the information for most of the larger DC's but not all. Also, as new plans roll out, many members have different deals in their own contracts as the clause for the yearly dues increase adjustments and the time frame for re-adjustment of dues has changed in many contracts.
Just for example, ER is CPI + 4.5% per year plus a possible adjustment every ten years. (Earlier adopters had CPI = 3.5%) That was spelled out clearly and I don't understand why the sales person did not mention that to you. Early adopters are paying very low dues, even with the yearly adjustment. For example, the earliest adopters of the 60 day plan started with $20,000 in yearly dues. Even today they are still paying less than $25,000 for the yearly dues even with the yearly increases. While new members pay nearly $60,000 a year for the 60 day plan.

DC4MS

Ok....I messed up.

3DH noticed that I made a mistake on the calculation for the Membership Fee "Cost-per-night" for the non-capital cost calculation and reminded be that LUSSO has a 100% refund policy of the membership fee and my formula has a 0% refund policy.

Sorry LUSSO...my bad.

I have fixed this error and I am reposting it here. If you were one of the 10 or so people that downloaded it...just use this one and delete the old one.

That's what I get for working so late last night.


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Attached Files

LUSSO Membership Analysis.xls (45.5 KB, 32 views)

3DH

Thanks for making the update!

__________________
"Boutique" is better! Another extremely satisfied LUSSO member!