Destination Clubs - An Overview

What are Destination Clubs?

In very simple terms a destination club or luxury residence fund provides access to a portfolio of high-quality, fully serviced, luxury, spacious vacation homes in a variety of locations. Being part of a club entitles a member to the use of the clubs properties. Destination clubs offer their members a flexible alternative to second homes, luxury hotels, and vacation home rentals. The clubs have properties located in a variety of destinations, sometimes on a global scale. They also provide the peace of mind that comes from knowing each home will be maintained to a consistent, very high standard. We use the term "destination club" to cover a variety of organizations, but the clubs themselves may use destination club, residence fund or just luxury travel club - see more on the different structures below.

Locations

Different people have different ideas about what makes a great vacation. With this in mind, the destination clubs offer their members beautiful homes in a variety of settings. Beachfront properties are always popular (eg in Hawaii, the Caribbean, Florida, the Mediterranean) and so are mountain hideaways with access to great ski slopes (eg in Vail, Aspen, Deer Valley, Swiss Alps). Locations in leisure resorts offer superb golfing, spa and other relaxation opportunities, while urban apartments provide luxurious accommodation in vibrant city destinations.

Member Services

Clubs typically provide a full range of services both before and during a stay, so that members can enjoy relaxing, stress-free vacations. They help members with all their pre-trip planning, making flight arrangements and organizing ground transportation. Prior to the member's arrival, the kitchen will be stocked with both groceries and beverages that the member requests. A similar service will be available in the living areas, with books, games, entertainment and even fresh flowers provided according to the member's wishes. Daily or weekly housekeeping is also part of the package. A local concierge will be on hand to arrange tickets and reservations for any on-site activities that the members would like to participate in. This can include tee times at the local golf course, spa bookings, and dinner reservations at exclusive restaurants, amongst many others. Clubs will also arrange for a personal chef to come in and cook either a special meal or every meal, if that's what a member would like. Anything that might be needed to accommodate small children (highchairs, playpens, safety gates) can also be installed, and nannies, babysitters or tutors can be organized for older kids.

Types of property

As a guide to the standard of property available, the homes have a typical market value of $2,000,000+, with different clubs offering homes at various levels. In metropolitan areas, the accommodation will have approximately 1,500 square feet of floor space. Beachfront and more rural retreats generally have more land, so floor space can range up to 6,000 square feet. The city locations tend to be made up of luxury condominiums and feature all the associated amenities. Beachfront and scenic retreats are usually freestanding houses with 3-, 4-, 5- or even more bedrooms, often surrounded by well-tended gardens and secluded enough to offer a real sense of privacy. The spacious nature of the homes is perfect for large families and groups of friends to all vacation together.

Club Structures

Very broadly there are two types of structures. Equity clubs in which the members are also investors and have an ownership interest in the underlying real estate. The fees to join are higher - because you are investing in real estate. These equity clubs may describe themselves as residence funds or fractional ownership funds. In the non-equity clubs, the members do not own the real estate, and simply enjoy the travel experiences and luxury vacation homes. Many clubs also offer other member-only travel opportunities, in addition to the nice vacation homes. These other experiences can include safaris, cruises and exotic adventure travel.

Costs

The cost of joining a destination club or residence fund can be split into three categories. There's the initial payment to join, annual membership dues, and nightly fees for staying in the accommodation. All of these amounts vary enormously depending on the club, its business model, the properties in its portfolio and the level of membership. 

• Equity Clubs - Typically, there will be an initial fee of $150,000+ and annual membership dues of $15,000+. The annual dues cover a number of prepaid nights. Members have ownership or an interest in the club's real estate.
• Prepaid Clubs - offer a range of memberships from one year to lifetime memberships. The initial fees and annual dues vary accordingly. Members choose a plan level each year based on the number of days they wish to travel. 
• Rental Clubs - Have a low initial fee in the region of $10,000 and annual dues of about $3,500. All nights are then paid for as they are reserved and vary according to the property, the season, and the location.

In most cases, the club's homes are available exclusively to members, though some equity clubs rent them to offset operating costs and keep dues low.

Compared to Private Residence Clubs

Destination Clubs and Private Residence Clubs have a lot in common but also have some differences. If you're considering one you should certainly look at the other. Read our article "The Difference between Destination Clubs and Private Residence Clubs" as a starting point in your research.

Destination Clubs are also an alternative to owning a second home; there are pros and cons on both sides, which you can read about in the article linked above.

For more information on destination clubs you can start at "Compare destination clubs" which lists the main clubs.