Kagehitokiri

Abercrombie & Kent Launches Equity Destination Club - SherpaReport

Jarvis Slade, President of A&K Residence Club, Talks to SherpaReport - SherpaReport

Abercrombie & Kent Acquires BelleHavens and Crescendo; Launches New Equity Destination Club | Halogen Guides Real Estate - Luxury 2.0 Guides and Reviews

bellehavens + crescendo > "abercrombie & kent residence club"

very interesting, because i thought intrawest (now owns abercrombie & kent) was directly involved. i had presumed abercrombie and kent would simply provide the experiential aspect (which they are doing) while intrawest would provide more real estate.

some members decided they did not want to stay on.

it will be interesting to finally hear NeilGoBlue and TarheelTraveler's thoughts on this.

- president - Jarvis Slade, former American Express VP of Customer Service Delivery, and a Moderator of Consumer Travel Network (Platinum/Centurion Travel Service and Membership Rewards)

- Sales and Business Development - Darin Gilson, founder and CEO of BelleHavens

- real estate - Joe Mitchell, President of Crescendo

- Senior VP Member Services and Hospitality - Stephanie Papaioannou, former Executive Director of Harper Alliance and Vice President of Andrew Harper, Inc

(no A&K employees)

NeilGoBlue

AK is definitely running the club. I believe that Intrawest and Fortress capital are shareholders of AK. From the Bellehavens prospective, 95% of the members moved over to the new club. The ones that didn't had personal financial issues and wanted out (most were tied to real estate industry).

The interesting point is that they want to compete with ER and they now think with the money behind them (AK, Intrawest, Fortress). They believe that once AK ramps up, being an 'equity' club will allow them to compete with ER and when prospective members look at both clubs, it will be a 'no brainer' to choose the equity club.

vineyarder

IIRC, Cresendo was significantly more expensive (in terms of deposit & home values) compared to Bellehavens. Will the new club have two tiers of members/homes? If not, how are they addressing this? How will the merger effect current members of the two clubs, in terms of annual dues, usage, refund rights, reservation policies, etc.?

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NeilGoBlue

AK has 1 tier of homes. We all now pay the same dues (for given nights).. For Bellehavens members it is going up though it is phased in over 3 years.

There is a formula for refunding money whereby it takes into consideration the lower prices that Bellehavens members paid in. We all still retain 60% of the upside.

There is one reservation policy for the club and a lot of different 'old plans' that were massaged to fit the current system. It seemed very fair. And givent the percent of people that moved over the club members agreed. There is one membership plan with varying nights/holidays, etc going forward.

Kagehitokiri

averages were $2MM and $2.8MM IIRC.

so they will average it out.

from 2nd sherpa link above >
Intrawest, Abercrombie & Kent join forces

NeilGoBlue

The new club will be 3.0-3.5mm going forward.. competing with ER.

AK and Intrawest will, very quickly, make certain properties available to the club to increase the locations and homes. These aren't just generic Intrawest properties, but only properties that would fit the clubs exacting standards. This will allow the development company time to ramp up the number of homes.

Kagehitokiri

jarvis said $3MM+ in sherpa interview, i added quote to last post.

A&K certainly has nice villas in europe etc.

intrawest has a handful of nice condos im sure.

hows the new refund work?

95% of ~168 members = ~160 members.

sherpa interview said ~150 members.

so only ~10 members left. thats good to know it was for financial reasons, although of course im sorry to hear they got hit by the market.

NeilGoBlue

I cant speak for the future.. meaning it's not clear to me what the refund policy will be for new members.. but for us it's

The current value of the membership (what they are selling it for)
Multiplied by 60% (this is the haircut we got because we didn't put as much money in as crescendo members)
Subtract your basis (everybody got a 'basis' in the merger)
What is left is the 'profit.'

Take 60% of the profit, add it to your basis and you get your resignation money.

So, 40% of the profit goes to the AK and 60% goes to members.

Kagehitokiri

gotcha.

thanks for all the info neil

NeilGoBlue

I'm pretty confident the new refund policy will be 60% of the difference of your price from the current price added to your price. But it's not in writing yet.. so we'll see..

NeilGoBlue

just an fyi.. several of the Bellehavens homes were jettisoned in the merger..

All of the Crescendo homes stayed along with Kiawah which is not on the website.

The jettisoned homes include:

Palm Coast
Midway
New York
Great Exuma
Hawaii
Hilton Head

These homes didn't meet the 'standard' set by the new club. The current La Quinta home is getting a fourth bedroom addition. They don't want homes with 3 bedrooms (except for city properties)

Kagehitokiri

great info, so that shifts the average value (up) already.

one thing that surprises me is that there werent crescendo members leaving because they did not like the shift from an REIT.

TarheelTraveler

From the perspective of a former Crescendo member, I was very excited about the deal, and a vast majority of members approved the deal and stayed on. I really like having the financial and marketing backing of A&K, Intrawest, and Fortress, the ability to take A&K trips as part of my days, the addition of many new properties, particularly the 12 or so European villas, and the great access to ski resort properties that Intrawest has in resorts they own.

As far as the change from the REIT structure, I'm good with it, because it allows for marketing (unlike Crescendo's structure) and provides better protection for the members, because all of the club property is owned by the members exclusively and without debt.

To me, the deal changes the dynamic in the DC industry. It seems like if you can choose between equity and non-equity, all other things being equal, all or almost all would choose equity.

LTTravel

I am not sure what to think of this announcement. A & K are currently being sued by former Tanner and Haley members. A & K had their name on the previous destination club, whether it was a licensing agreement or whatever. I don't think that they should put that name on the current new plan. I don't know what this will do to the current court case. I have also heard that A & K had filed for chapter 11 themselves sometime in the past. I have been looking for proof of this but a quick search did not reveal any info. But this was from a reliable source.

Bourne

This is good news.

However, the biggest difference between the ER, UE and QN of the world and equity based DCs is the growth translating into more homes, destinations and financial strength of the company.

My opinion still does not change. 90%+ DC member are not looking for capital appreciation. They are looking for more homes/locations to travel to.

What we have to wait and see is how this M&A impacts the dynamics of growth for the new club. If the growth increases exponentially, then yes, it does change the dynamics of the industry.

Otherwise, the Equity based model would still remain a boutique model.

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