Destination Clubs and Private Residence Clubs have a lot in common. The terminology can be confusing and the lines between these two are getting increasingly blurry. In many cases the terms are used interchangeably so you'll find some companies that might fit closer to a Destination Club (definition), but which refer to themselves as Private Residence Clubs (definition).

Destination Club Home in Telluride

Both of them are alternatives to fully owning a luxury second home and both offer impeccably furnished, luxurious accommodation. Both also provide very high levels of service to their members and owners. So if you're considering buying one of these products we certainly recommend that you look at the other. Both require an initial upfront payment to purchase a membership or share and then both have annual dues or maintenance payments.

The biggest difference is that with Private Residence Clubs you are buying a share in one property in one location. They are therefore great for folks who know that they want to go back to the same location year after year. Some of the PRC's also offer the opportunity to swap your time and location with other locations within their group or with other affiliates. Destination Clubs on the other hand own a portfolio of luxury homes and provide access to all the properties within the Club. Members in Destination Clubs have a variety of locations to choose from each time they go on vacation.

Another major difference used to be that Destination Clubs were all none equity "membership" clubs, whereas Private Residence Clubs offered true fractional ownership in real estate. Nowadays many Destination Clubs offer an "equity" participation in one form or another, either directly, by being structured as a REIT or indirectly by offering members a share in the increased value of the properties. The other "non-equity" Destination Clubs return 75% - 100% of a members initial deposit when they resign. Owners of Private Residence Clubs own actual real estate and have a title and deed. As such they can gain or lose as the real estate values move with the market.

One other difference is the member, or owner, to property ratio. For Destination Clubs this is typically 6:1 (ie 6 members for every property in the club), but for PRC's the ratio is typically 8:1 or 10:1, so that each property has 8 owners. With the lower ratio, Destination Clubs, can offer their members more flexibility which can help with booking the property they want when they want. It also means that Destination Club properties are only in use about 55% - 65% of the time. However Destination Club homes in seasonal locations, such as ski resorts in winter, will get booked by members well in advance. PRC's have a variety of reservation systems for sharing out time, including peak periods and holiday periods, amongst their owners.

The table below sets out some of the key differences.

For more specific details on any particular club, see the sections on Private Residence Clubs and Destination Clubs.