What exactly is a destination club? How do we define a destination club? Many people seem to have mixed ideas of what exactly a destination club is. Here at SherpaReport we like to keep things pretty simple and consistent and being fans of the bard we follow Shakespeares tenets.

A destination club is an entity that gives its owners or members access to multiple luxury vacation homes spread around the country, or around a region, or around the world. At the same time the club provides a high level of service to help those members so that they can enjoy relaxing, hassle-free, family vacations. People join destination clubs as an alternative to buying second homes, or renting a villa or staying in a hotel.

There are a couple of different structures or models that the club's use. Many of the original clubs were non-equity clubs in which the members were purely members, who had a right to use the club's homes. Many of the newer clubs are equity clubs in which the members are also owners or have some interest in the club's real estate. Nowadays the majority of the clubs are some form of equity club. Having said that, the two biggest clubs - Exclusive Resorts and Quintess - are both non-equity clubs.

Destination clubs are often mixed up with private residence clubs – read about the differences here. The industry itself mixes up the terms and the broader media also mixes up the terms. For instance the New York Times just ran an article last weekend saying “private residence clubs start to resurface”. The article actually mentioned three companies, which by the above definition would all be destination clubs, because they all offer luxury homes in multiple different locations to their owners and members.

Part of the problem is the sectors mixed history in which many clubs have come and gone. Some were badly run to start with and others failed in the recession that we’re just coming out of. As a result some consider the moniker “destination club” a bit of a four letter word. Another part of the problem is the industry's own mixed use of the terms destination club and residence club. For instance, the Abercrombie & Kent Residence Club is in fact a destination club and has some 18 or so beautiful homes around the world plus a selection of European villas and also provides access to its parent company Abercrombie and Kent's renowned tours. The Ritz-Carlton Destination Club has both a destination club component, that it calls portfolio membership, and a private residence club component, that it calls a home club membership.

Some destination clubs prefer not to be called destination clubs at all and talk about themselves as property funds or investment funds or fractional ownership funds. Some of these funds have a defined finite lifetime, at the end of which they will sell the residences and divide the proceeds amongst the investors. Examples in this category include Equity Estates, Lifestyle Assets, and the Hideaways Club. We refer to all these as equity destination clubs.

As Shakespeare had Juliet say to Romeo:

"What's in a name? that which we call a rose
    By any other name would smell as sweet;"

If you're looking at destinations clubs, start at the top of this page and read through some of the articles linked in the top few paragraphs.