vineyarder

Per the website, if you leave the club after 5 years you are guaranteed 70% of your deposit back, or you can resell it. If you can't find a buyer, and the club repurchases it for 70%, then your costs are as follows:

Lost opportunity cost @ 5% = $8250/yr
30% of deposit amortized over 5 years = $9900/yr
Annual dues = $2700/yr

Total costs = $20,850/yr
Cost per point = $8.34

Rome Cavalieri Hilton @ 158 points = $1318 = 3.4% discount

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Kagehitokiri

and if the company is earning that 5%, while youre losing it...

hypothetically, if you could buy more points for just additional annual cost, that could increase value, right?

but they would probably either not allow that, or charge you additional up front cost...

even taking the nonrefundable part of the deposit out of the equation, and assuming all properties do offer the ~90% off, in this case that would drop to more like 50% off after taking into account the opp cost. while im not sure im not sure how that compares with destination clubs, in terms of opp cost dropping added value, it is definitely different from banyan tree private collection for example, because of the way they structure in terms of weeks rather than points per night.

some comparisons to banyan tree private collection >

Banyan Tree Private Collection - Membership FAQ
although this is certainly interesting>
i presume that means unaccompanied use / "gifting."

apparently that is not allowed by banyan tree private collection.

TarheelTraveler

Vineyarder - when I did my numbers, I assumed you might break even when you got out due to some appreciation, but you're right, it might be more realistic to deal with the known potential loss on getting out until proven otherwise. This substantially ratchets up the cost.

Jack

I don't understand why this is on here, it is not a destination club, I thought a destination club featured mainly single family homes with 5 star private services. This just seems to be someone starting a club so people can stay at nice hotels.
I don't like hotels..

3DH

...ditto, Jack.

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Ben Scott

Jack, 3DH
The wonderful thing about these boards is that the members are extremely educated on whatever subject the forum pertains to.
We are certainly marketing this club as a Destination Club or at least as an alternative. With this in mind I thought your members would be interested, I know I've been interested in what they have been saying.
I'm in the process of assembling some hotel pt vs cost examples to give you guys. It's going to take a few days though.

Desties

I know that nobody has mentioned it, so maybe I'm the only one irked by it, but I think the 70% refund rate will be a big detriment. Yes, it's 70% of the prevailing rate in five years, but that's common in many destination clubs and they are between 80% and 100%. Exclusive Resorts just made the move to 75%, but they are the leader with the waiting list that can't add new properties fast enough.

Even if the early consumers buy into the 70% appreciating to possibly 100% or more of their original deposit, it will be that much a harder sell for the later members.

And I guess it hasn't been spelled out if a person leaving after five years would be able to cash out right away or if there is a 1-to-1, 2-to-1, or 3-to-1 ratio of new members that would have to come in before cashing one out.

vineyarder

Ben - how about an explanation of what the deposit is used for and how it is secured; i.e. how will members know that the money will be there for the club to repurchase the membership at 70% in 5 years?

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DC4MS

I authorized the first post as Ben Scott send me a very detailed e-mail explaining the concept and if he could post it on our forums.

I told him that we are mainly interested in DCs, but there are MANY hotels at locations where there are ZERO DC homes and I thought this might be interesting to our members as it is a "DC style club" but focused on hotels. I felt creating a new thread (not a new forum) would be interesting for our readers.

I think there is a real need for a product like this and feel that they can learn a lot from our users and may even change or modify their original plan based on our input.

Most users here LOVE DC because they offer an alternative to buying a second home. If someone can create a "financially reasonable" DC-style club for hotels instead of homes, I think they will sell a ton of memberships (especially to businesses).

Perhaps Ben will reconsider the 70% refund rate and that alone is a great reason for this discussion. Either way, Ben was very professional in his desire to share his concept with us as I did not find any other information on the internet.

If they are able to offer the 5-6 star hotels mentioned in this thread (rather than a Marriott timeshare) then this may be a very promising business idea.

Kagehitokiri

itd be nice to see them add some condohotels and resort villas (managed by four seasons, mandarin oriental, ritz carlton) - focus most on stuff that is not offered by destination clubs right now.

the hotels i gave earlier are the ones that caught my attention from the list on their website. their website seems to indicate they have been operating for a while... which seems to conflict with ben seeming to suggest they have not launched yet. perhaps its only been soft launched?

TravelGuy

I'm becoming quite weary of these constant disrespectful remarks aimed at Marriott timeshares. I find that the most comfortable "home" on the road for me is a Florida beach oriented Marriott (preferably Lauderdale) that is small enough to contain my thought process and keep the pacing to a minimum. I only need a second bedroom for my aging dog to "do his business" when we can't make it to the elevator “in time”. A further benefit to Florida beach-front Marriotts is that they usually are adjacent to a Hooters or other such eating establishment that specializes in trans-fat cuisine and spandex. Also, what’s not to like about being lulled to sleep by the sound of footsteps above me, colicky babies and nearby saloons? And I prefer older, “Hotel 6” type furnishings, artwork as seen on the “starving artist” overnight infomercials, Formica on all horizontal surfaces, and thicker carpets (preferably shag) for those Hooters nights that I spend on the floor just inside the front door instead of the long walk into the bedroom.

One more thing, it’s not really a “resort” unless you have to reserve a pool chair by 4am (usually on my way back from Hooters), have a least two solicitations by a commission-feed timeshare salesperson posing as an owner representative, and have to fight for a parking space after 5pm.

Why would I want the wasted space, quiet ambiance, subtle opulence and convenience of a Destination Club property instead of an aging apartment turned timeshare by a huge hotel company?

Kagehitokiri

you got me to do a double take

3DH

Priceless, TravelGuy! (and, so early in the morning... you're on a roll today!)

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saluki

I just about spit my coffee all over my desk reading this one! A TravelGuy instant classic.

The post made me think of another forum member but I can't quite put my finger on it...hmmm...

Jack

haha I wanna travel with you travelguy

TravelGuy

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