Destination Clubs Explained

Destination clubs offer access to a collection of luxury homes in some of the best vacation spots around the world, from beach retreats and ski chalets to urban pieds-à-terre. Over the past five years, these clubs—the newest vacation home alternative—have gained popularity, especially among families with children or multiple generations vacationing together. For these travelers, or any vacationer who wants the service of a five-star resort coupled with the comfort of more living space, destination clubs can be a better option than renting a villa (or finding a hotel with adjoining rooms).

Each destination club offers its own membership structure, price and array of residences. To join, members make a one-time membership deposit, ranging from $30,000 to more than $1 million. They then pay annual dues (median dues hover around $20,000), which cover property taxes and association fees in communities, and also go toward a capital reserve fund for property repairs. The majority of clubs don’t offer deeded real estate ownership. Instead, the deposit and dues buy a set number of vacation nights per year at the club’s homes.

Although clubs are continually building their property collections and adding new services, they remain niche players in the travel industry. There are currently fewer than two dozen individual clubs with around 6,000 members combined. Dominating the industry is Exclusive Resorts, with more than 3,000 members. Ultimate Escapes, Quintess LRW, High Country Club and Lusso Collection round out the top five.

Abercrombie & Kent, already well known for its luxury tours and safaris, launched a club this year and aims to quickly break into the top five. The club is building a collection of homes around the world, including properties in Africa, and offering members the ability to use plan nights on Abercrombie & Kent tours and safaris.

Given the mix of big names and smaller startups, joining a club could expose you to financial risk. In 2006, for example, destination club Tanner & Haley declared bankruptcy and failed to refund all its membership deposits. This implosion exemplifies why it’s critical for you to assess a club’s financial footing, weigh the costs and benefits, and conduct proper due diligence before signing on the dotted line.

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