Anne McBride’s calendar reads like something out of “Lifestyles of the Rich and Famous.”
This week, she and her husband will spend three days in a “casita” at the tony Miraval Resort in Tucson, Ariz. In January, it’s off to a three-bedroom, four-bath mountain home in Beaver Creek, Colo., for a week, where she plans to host six family members and friends.
In February, she, her husband and two other couples plan to stay in a four-bedroom villa in Los Cabos, Mexico, for a week. Then it’s April in Paris, where she and three friends will stay in a two-bedroom hotel apartment for a long weekend in the City of Lights.
“I feel so privileged,” says McBride, stretching out the word. The 56-year-old owner of a New York-based financial communications firm says, “It’s like being a kid in a candy store.”
McBride doesn’t technically own all those places. She just gets to stay in them, as the result of a trend in the fast-growing vacation-home industry: vacation clubs.
Essentially a more-evolved — and far more-expensive — form of time-sharing, exclusive vacation clubs grant members nearly unlimited access to multimillion-dollar homes in resort areas and cosmopolitan cities around the world. They also offer members the amenities of a five-star hotel, such as concierge service, private chefs and fly-fishing guides.
The vacation-club business is starting to attract big-name investors. Exclusive Resorts, a Denver company that began operations in January, is expected to announce this week that Steve Case, the America Online co-founder and former AOL Time Warner chairman, is purchasing a 50 percent stake in the company and taking a seat on the board. The stake’s price hasn’t been disclosed. “I like the fact that, like mortgages, this approach democratizes access, making great vacation homes more accessible and affordable to more people than ever before,” Case said in an e-mail message.
Exclusive Resorts grants members access to more than 30 commodious vacation homes, including three-bedroom residences at Kohala Coast on the Big Island of Hawaii; four-bedroom villas on Great Exuma Island in the Bahamas, and even a two-bedroom apartment on a luxury liner, the World of ResidenSea, which circumnavigates the globe. (McBride, an Exclusive Resorts member, says she has already booked an August trip on the cruise ship.)
A handful of high-end vacation-club companies have emerged in the past four years hoping to offer an upgrade to the time-share industry. They are positioning themselves as fancier, more flexible and more sophisticated alternatives to other forms of property-ownership clubs. They are certainly more expensive: Members usually pay a one-time membership deposit of $200,000 or more (refundable if a member resigns, less a 20 percent transfer fee); additional annual fees run about $12,000 to $18,000. In exchange, members can visit as many properties as they like for a maximum of 60 days a year.
The clubs’ prime targets are well-off people who want the benefits and prestige of owning multiple homes but not the burdens and responsibilities. The clubs say they have special appeal to people who travel with large families, friends, tutors, nannies and pets, and who don’t like staying in hotels (not enough room; too expensive) but who don’t like the typical time-share experience.
In addition to the investment by Case, Exclusive Resorts plans to announce the purchase of a rival, Mirabella Estates LP, which will expand Exclusive Resorts into markets in the Colorado Rockies. The company’s growth is “a sign that the industry is maturing,” says Brad Handler, who co-founded Exclusive Resorts with his younger brother, Brent. The two got their idea after vacationing together in Hawaii with their families and parents: They liked the amenities of the resort hotel where they were staying but wished they had more room — or better yet, a house, which they could visit without owning. “We created a better way to experience vacations,” says Handler, a former in-house counsel at eBay Inc.
Some analysts say the idea has promise, but warn the clubs will be challenged to expand their portfolios enough to prevent members from getting bored with visiting the same places — especially because the properties cost so much to acquire.
“The limiting factor is that these are exclusive, very high-end properties and they represent less than 1 percent of the total inventory in most markets,” says Scott Berman, a partner in the hospitality and leisure consulting group at PricewaterhouseCoopers LLP in Miami. What’s more, the high upfront membership fee narrows the clubs’ potential audience.
The less-expensive time-share industry has been growing at double-digit rates in recent years, even during the economic downturn, according to the American Resort Development Association, a Washington, D.C., trade group. Time-share units worth about $9.4 billion world-wide were sold last year, with $5.5 billion of them in the U.S.; that compares with $8.6 billion world-wide in 2001, with $4.8 billion in the U.S., according to the resort group. In 1992, sales were $4.25 billion and $1.3 billion respectively.
Time-sharing has gradually outgrown its original model, in which participants got the use of a condo at a fixed weekly interval. After years of fast growth back in the 1970s, time-sharing got a bad name because of high-pressure sales tactics some developers used; some buyers bought into condos in bad repair and then found it hard to sell their shares. More recently, big names, such as Ritz-Carlton, Marriott International Inc., Hilton Hotels Corp., and Four Seasons Hotels Inc., have entered the field with private-residence clubs, whose members buy shares in luxury accommodations for a number of weeks each year. Last year, some 6.7 million consumers world-wide owned some form of time-share, with three million of them in the U.S.
By offering more properties than regular time-shares and limiting the number of members, there is little chance of two members booking the same place at the same time, the high-end clubs say. But in the event of a conflict, clubs typically find a comparable alternative. The clubs say resigning is as simple as resigning from a country club.
