With this weeks announcement of a restructuring at High Country Club the members have an interesting decision to make. Here's our take on the key points to consider.

To some extent the decision for members is similar to the initial decision to join a destination club. High Country Club like other destination clubs offers relaxing, easy to arrange, family vacations in spacious vacation homes. Whether you want to stay in the club depends on your answers to the following questions.

Do I want to spend my vacations in spacious family homes as opposed to hotel rooms ? Are the destinations clubs homes in places that I would like to visit ? Do I have the time to do all the research to find the right homes to rent, or, do I want to have the club essentially do all this research, so that I know that the homes will be just right when I arrive on vacation ? Can I reserve the homes I want, within reasonable limits, when I want to travel ? Are the costs in line with or better than the alternatives? How comfortable do I feel with the financial commitment?

After the restructuring High Country Club will have 21 homes in the following locations.

Beach
 1) Cabo San Lucas/Villa La Estancia
 2) Playa del Carmen/Luna Encantada Beach
 3) Playa del Carmen/Luna Encantada Penthouse
 4) Punta Mita/La Playa Estates
 5) Cancun/Portofino
 6) Nuevo Vallarta/Villa La Estancia
 7) Big Island-Waikoloa/Colony Villas
 8) Maui-Wailea/The Palms
 9) Hilton Head/Sea Pines Plantation
 10) Turks & Caicos/Villa Renaissance
 11) Costa Rica/Reserva Conchal

Mountain
 12) Beaver Creek/Village Hall
 13) Beaver Creek-Arrowhead/Aspenwood Lodge
 14) Breckenridge Golf/Stonehaven
 15) Keystone/Settlers Creek
 16) Telluride/Owl Meadows
 17) Winter Park/Antler's at Lakota
 18) Mammoth/Grand Sierra Lodge

City
 19) New York/1600 Broadway

Leisure
 20) La Quinta/PGA West
 21) Orlando/Champion's Gate

The club is cutting 15 homes from its portfolio, so if all the 375 members stay on, there will be increased demand and usage of the 21 homes that remain.

This is probably the hardest part of the analysis for members. Destination clubs typically have occupancy rates that average 50% to 70% over the course of the year. This leaves plenty of open time when the homes aren't occupied, and so makes it easier for members to reserve the times they want. Under the Success Plan, High Country is estimating that its homes will be used 315 nights per year, equivalent to an occupancy rate of 86%.

Normally when we analyze the cost per night for a destination club, the calculation includes an amount for the initial membership deposit. In this case for High Country, the club is saying that due to the fall in property values and the debt level in the club, there is no equity in the clubs homes. If members do not approve the "Success Plan" the club will be wound down and members will receive zero for their deposits. So under the current circumstances, the equivalent cost per night that members pay is just their annual dues and the new cleaning fee divided by the number of nights in their membership plan. In the table below we've made some assumptions on number of stays and so how many times members will pay this $200 cleaning fee.

As a High Country Club member you can compare this cost per night to the alternatives of hotel stays or villa rentals.

High Country Club has offered to make the full financial spreadsheet for the new plan available to any member that requests it. Look though it, test it, ask your financial friends or your accountant to look at it. This openness and financial transparency is great to see.

In the current economy everyone is affected. High Country Club has moved quickly and openly to adjust to this new economy which has severely impacted the club, their business model and their members.