Steamboat Bill

After spending a week at the High Country Club Waikola, Hawaii (Big Island) and the Maui (Mauka) property, there is a HUGE difference between the two.

The Waikola property is valued at about $650,000 is a 3 bedroom and 2.5 bathroom in a medium sized resort style complex of a cluster of 6 attached townhomes. The property is very nice, but not over the top luxury.

The Maui property is valued at $2.6m is a 4 bedroom, 3.5 bathroom incredible home with tons of upgrades and sits on a private 2-3 acre property with lush landscaping, private golf area, gated entry and is probably the nicest HCC property in their current portfolio.

Question - Should there be a premium attached to reserving the Maui property?

My answer - yes, it should require 2x reservations nights vs the other properties and should (probably) be limited to 1 week rentals only.

Justification - First of all, this home used to rent for over $20,000 per week (based upon direct communication with previous owner) and the property is WAY more expensive to buy and maintain than the average $850k-$1m HCC property. I am 100% convinced that this home should NOT be available to 1 week "companion" members as HCC would probably be losing money on these reservations. I believe that charging 2x the nights as the other HCC properties would be the most FAIR thing to do as HCC adds a few "trophy" properties to their collection that are out of their current $600-$1.5m range and is "good" for all the members. Otherwise, the math for these properties simply does not add up and I want to avoid getting "greedy" like the former T&H members.

Other ideas - possibly limit the home to only Affiliate and Private members and charge 2x nights as this gives the Companion and Associate members incentive to upgrade membership plans.

FYI - HCC has updated their home page with an online video of testimonials.

saluki

As an associate member I am not exactly an unbiased party here, but I think it is premature to start putting the HCC properties in different tiers.

The Mauka property is clearly above the typical HCC standard but, as such, is also a huge carrot dangling in front of prospective members. I don't know the details of how this property came into the portfolio, other than the owner contributed this property along with the Steamboat ranch property & became an investor in HCC. Assuming that the owner had a lot of equity in the property, HCC is quite possibly not paying much more monthly for this location than some of their other properties. I'm sure the taxes & landscaping bills are higher than most (gotta keep those golf greens rolling smooth!), but likely the mortgage payments are low (or non-existent).

Down the road, I could see HCC creating some sort of Level II tier of more expensive properties with potentially different redemption values. But, in the short-term, I think the key for them is to continue to grow the membership base under the current format & add quality properties including a few flagships such as Mauka.

Bourne

Scratch...Scratch...

I changed my mind...

It does go against what I stood up for in the past. Thank you 3DH and vineyarder for showing me the light.

DosMasCervesos

I'm with saluki on this one, but I am also only at the associate level. I think creating tiers increases complexity, at least it does in my mind. I want to be able to use my N days at any available property within the terms of the reservation rules. If HCC had a tiered property structure before I joined, I likely wouldn't have joined.

There are quite a few properties (like the Waikola property) that I believe can be rented at around or less than the HCC member cost-per-night. Not the exact HCC property, but a closely equivalent property in the same resort or complex. In short, with some properties (Waikola, Rosemary Beach, etc.) HCC is an okay deal, but with other properties (Outer Banks, Waikola, etc.) it is a great deal. I joined HCC with the general philosophy that I would be trying to stay at the properties that give me the most bang for my buck.

Now one could argue that even with a 2x night multiplier the Waikola property is still an outstanding value, but I would argue the simplicity of having all of the properties at the same level is more important. If we start trying to assign specific usage values to each property based on its true value, then we are headed towards Perry's point based DC system. While that might be good for Perry, it is not what I am looking for in a DC. I'm looking for a good portfolio of properties, simple N days usage terms, and a few outstanding value properties that I will occasionally get to use.

Matt

vineyarder

I think that would be a very slippery slope... what about the properties that are valued at $1.5M; do they cost 1.5X nights? Should a $1.2M property cost 1.2 nights? And should a $650K property cost only 0.75 nights per night, etc., etc.? And what about seasonality? Should Outer Banks cost 3X as many nights per night in the summer vs. in the winter, since demand is at least a factor of 3 higher in the summer? Really would need to move to a points-style system to make this make sense, where each property requires a certain number of points per night, varying with the season, etc. But that has been discussed previously, and IIRC, most posters, including Steamboat Moon, were opposed to that concept...

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Living in a vacuum sucks!

3DH

Steamboat... I am awaiting a reply by PerryM on this one, as it sounds like you are taking the detour he has mentioned repeatedly with regard to assigning "points" to memberships and residences based on value!

While I see the debate on the greed that could derive from such homes in the system, there are also considerations with regard to the simple fact that membership was sold as "days" rather than as a tiered system related to home valuation. And, given the fluctuation of home values of late, I would guess that trying to assign points to certain residences would be an ongoing and never-ending proposition!

Bottom line, don't try to reinvent the wheel and create a timeshare concept within a DC.

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

baylor1

I would not be in favor of a points system or a 2 nights for 1 night in certain properties. That is not the club I joined.

While I do very much like staying in the nicest properties possible, candidly I would rather see HCC have two $1.3 million properties versus one $2.6 million property. I would rather have greater availabilty of propoerties and more destinations than a handfull of over the top properties.

Steamboat Bill

Exactly...the model that HCC created is an approximate $1m average home value and the new Maui property is way outside the box. I am not sure if HCC still considers this as a 7:1 member to home ratio for this home or not.

Some HCC members will NEVER want to go to the Maui Mauka property as it is NOT on the beach or it is too large or they are not interested in golf or they want to be close to restaurants and activities, etc. The home is located in Upcountry and is a 30-45 minute drive to the beach and just about anything else.

The point is that HCC "already acquired" this property and it is probably a fluke rather than a future direction plan.

I am NOT in favor of a points system or anything complicated like creating a two tiered system. However, I think this SINGLE property in Maui should cost a premium vs other locations.

Quite honestly, I think it is very unfair to allow 1 week companion members the use of this $2.6m property that used to rent for $20,000 per week as it is a LOST leader property. The Maui Palms typically rents for $3,000 per week. This is a 7x difference in rental rates.

If the Maui Mauka property costs 3-4x the upkeep of the Maui Wailea property, then who pays for that? In other words, the Mauka property may actually take resources (and improvements) away from other HCC properties.

Thus, members should pay a surcharge to use this home and 2x night usage is probably the most fair way to do it.

If I have to spend 2 weeks of my yearly allotment to book 1 week in Maui, then I will create more availability in other locations.

Obviously, people are going to have strong opinions on this issue and that is why I posted it here. HCC probably should have put a little more thought into this before they put it in their portfolio.

Remember that the new HCC Steamboat property will come online soon (within the next 3 months) and it is a 10,000 square foot home on 30 acres of property and probably cost way more than $1m.

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Also, I heard that one HCC member actually booked both the Maui Mauka property and the Maui Palms property at the same time as they wanted to use the Wailea for the days they planned on going to the beach. Perhaps they would NOT have done this if it cost 2x for the Mauka property. Geeze...that is really pushing it as far as I am concerned.

Bourne

Why did I not think of it before..

IMHo, it is a cool idea. I may not burn a whole week out there but would be inclined to using a 3 day reservation at Wailea in concurrence with a stay at Kula. Best of both worlds.

Steamboat Bill

Nope...I don't want to change any of those as it does seem to come out in the wash when you look at a yearly usage of a typical member.

For example, a reservation in the Deer Valley property during Christmas is worth MUCH more than the Orlando property in September, but the home values (and carrying costs) are within the same range as the "targeted or advertised HCC model"

The Maui property is 2.5x the typical HCC model and represents many standard deviations outside the normal HCC property cost and maintenance.

Thus, for this property (only) there should be some premium to book it and 2x the day usage seems pretty fair (IMHO).

If all 350 members want to book Maui it will take 7 years to satisfy everyone and charging double will take some pressure off demand for this property.

Also, what is better for the club - this one $2.6m home or 3 homes worth $866,000 each???

I have no idea what the carrying cost of the Maui property is, but the landscaping bill used to be $3,000 per month and HCC lowered it to $1,000 per month. There are 43 (yes forty-three) zones for the sprinkler system and it seemed to run 24/7 when I was there. There is a 40x20 pool and a separate jacuzzi that requires a pool service. The electricity and water bills must also be high. I am sure the cleaning costs more here and there are lots more things that will need maintenance that are significantly more than any other HCC property.

Trust me, I LOVED this property, but I am now questioning the current value of owning this home to the club and the sustainability of these trophy homes. I would rather see a 2x usage to reserve these homes than having the homes become a burden to the viability of the club.

When I spoke with HCC about this, they seemed interested, but said any changes would have to take 1 year after announcing a change and they did not indicate that they liked or did not like my idea.

Think about this - would HCC be better off financially if they never bought this home and just stuck to their targeted home price range?

Advice to DC4MS readers - book this home NOW!!!

I too was a little jealous when I heard this....I am not a Private Member with 35-45 nights of HCC use or I would have done this too.

pwrshift

Creating HCC tiers = Suicide

Why would an 'associate' be considered a lesser member if he/she only needs 15 days a year? The 'companion' may be somewhat different as it's really a 'trial' membership deal I think.

Steamboat Bill

Again...I am NOT advising tiers....only a 2x premium on the Maui property and limiting it to 1 week bookings. If they allow 3 and 4 night bookings, then it doubles the cleaning costs. Also they only mow the lawn on Saturdays, thus the greens are at their finest on Saturday and Sunday.

With a 2x nightly premium and 1 week stays, Companion members would never be able to book it as it would require 2 weeks and they only have 1 week. An Associate member would use all their entire years allotment with this one reservation and won't be able to book holidays there. The Affiliate members could book it and will probably never get a holiday there (6 month limit). The Private members will be the first in line to get a holiday booking there and 2x use will still allow them 3 more HCC week vacation.

saluki

I would not have an issue with banning short-term stays here (at least for bookings outside of 90 days) but do not see a need to charge a premium. Even if it is the premiere property at this point, everyone has a relatively equal chance to use it. Plus, as I wrote earlier, it is a great inducement for potential new members.

LTTravel

Bill,
You haven't been to the Beaver Creek, Breckenridge Lodge, Outer Banks, Punta Mita or the soon to be released Steamboat Springs property. I think you will find that there are several homes that are much better than some of the others. The Maui and Steamboat Spring are probably tops, followed not so far behind by the Beaver Creek, Breckenridge Lodge and Outer Banks home and not too far from the Punta Mita home and then down the line. I think you will find several great properties. If you want to see another great property next week, let me know.

ASIADCMEMBER

Steamboat:

As LTT can attest to, welcome to the "WOW" factor. Now that you've been to a house with wow factor, its the new benchmark for you and your family. Get ready to upgrade to club with wow. I am sure that the Maui home will be the most memorable for your children--and isn't that what the Clubs are actually selling us---better quality homes to spend better quality time with friends and families to create a lifetime of memories.