catpak1960

I have posted previously that we have been looking to join a DC and have been looking at Quintess and Lusso. We are very very close I believe to joining Lusso but should this Portofino news make me nervous??? With their 100 percent refund policy, is that a sustainable model in a declining real estate market?

3DH

While the answer to this will vary greatly based on which club, if any, the answer comes from... I can tell you that we are not worried as current LUSSO members. Given the significant growth of the club in just the last year, and with the "deposit trust" in place, we feel secure in our investment and will continue to enjoy the club and all it offers!

That said, the soft real estate market will allow acquisitions necessary for future growth to take place, and in a sense, will cost average property investments. The club has shown a true feel for what members desire, and takes great strides to provide that while maintaining a balance with regard to the financial aspects involved. Obviously, I am just a member, however, I can say that there has not been anything to have us concerned with the security of the club.

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

Desties

As someone who did a lot of digging into Lusso over a year ago, I would have no problem recommending Lusso.

I must be rubbing my eyes now that folks are starting to see the 100% refund as a troublesome policy. I narrowed my search to Lusso and PE last year BECAUSE of the 100% refund policy (and unlimited nights). Both have gone on to alter their policies.

Lusso used to be 100% + half of any new member deposit appreciation. So when I (somewhat regrettably passed) at $325k, when it became $375k a few months later, I would have been able to get $350k on redemption. I believe it's just 100% of your own deposit now, but keep in mind that Lusso has done nothing but raise its initial deposit minimum over the years -- in part because the club is growing so quickly -- so what may be 100% under a stagnant asset test, is actually less based on what the rate will be to those joining months and years later.

There is risk in any realty-based investment. T&H's failure was unique to its pioneering ways while it was still feeling its way in the niche it created with way too many leased properties and lax availability rules. Portofino may or may not fail, but if it does it appears it will be because it was too small and undercharging members for the services it aspired to provide.

DC4MS

I firmly believe that Quintess and LUSSO are on very solid foundations and you would be very satisfied with either club.

Kagehitokiri

im also surprised at some of the things people look at, and would think a look at a clubs financials would clear up any questions. if a club doesnt allow that, then you have to look at their model. IIRC ER is the least transparent, but its clear from their model that they are a profit machine.

NeilGoBlue

I don't have any clue.. but the PL and Balance sheet will tell you almost everything you need to know..

TarheelTraveler

I'm not an accountant, but I would want a cash flow statement as well.

DJTraveler

This helps me too - I try never to rush to decision. My take. A club with a 100% refund policy, still in infancy and some of the below, will be challenged. Everyone is sustainable until they run out of cash or new members. A declining real estate market it actually great for a club that has cash, equity, and development - if they can make it through the cycle. These points I have come to value.
-financial due diligence is king - more than deposit trust - will it cover all members forever? My money has to be safer.
-most recent few quarters result for net asset coverage % of member deposit liabilities. Where are they headed - trend is huge (assuming they can/will tell you and it's a >100% number!)
-Compare total assets, available equity for growth including development
-do the T&H test = If a club has too many of these... Always 100% deposit return, Short term (less than a year) deposit return requirement, unlimited use without ability to charge additional dues, low dues structure, leasing high percentage of homes, intent on being small, liability to have to rent homes for members which all contribute to under-funding expenses.
-T&H started with best availability... now all clubs claim best availability... sustainability driver is contracted nights (covered by base dues) per home and enough places members want to go for them to get full use. Unlimited use can be 20, 30, 40, 50, 60 + nights for same low dues. We're put in a position of betting on whether: members will enjoy the club more and more after they get into the swing - which is supposed to happen, but that means 40, 50 60 nights and there goes that availability OR members use 20 or 30 nights only - which begs the question, why are members not using more nights?! I'm looking for a proven unlimited use club - can't find one that will work into the future. Might be best to go with what make the most financial sense to you if you were running the club!
-who has destinations and homes you prefer
-talk to numerous members, talk to club mgmt team
Cheers

Quintess Michael

FYI- Quintess offers complete financial transparency.
With an NDA, there is nothing I can't show you

__________________
Michael Aumock
Director, Membership Development
Quintess, The Leading Residences of the World

pwrshift

Will the amount of money you were paid, including bonuses, stock options, etc. be shown in detail? How much commission you make on a sale, etc? How much of a price increase in membership fees and/or dues goes directly into your pocket? Why do you insist on an NDA ... tell us now ... we can all find out how much JW Marriott takes home, why not you too?

DC4MS

To be fair, most DCs require some type of NDA before discussing or disclosing their inner financial workings. I am not defending this action, I am simply stating, that for better or for worse, this seems to be a very common request.

The typical explanation seems to be that this is a small and growing industry and most clubs are very concerned about competition. I try to remind them how large the second home, timeshare, and PRC market is and how small the impact DC have been and that they should really concentrate on collectively growing the awareness of Destination Clubs, rather than worry about the other DCs (i.e let's not try to act like crabs in a barrel and work together).