Wealthy pay big bucks to join luxury travel club

Partnerships with five-star resorts
The club is expanding its offerings by establishing partnerships with five-star resorts, in which Exclusive Resorts builds its own luxury housing next to a high-end resort hotel. These arrangements give members access to the resort's spas and other amenities.

At Sea Island, Ga., Exclusive Resorts is currently building 24 homes next to The Cloister, a historic resort. On a recent trip, Davis looked over blueprints for the location — now just a dusty construction site — while discussing plans to seamlessly blend the homes in with the existing resort by emulating the Spanish Mediterranean architecture.

"Each home is going to look like a little mini Cloister," Davis said.

Catherine Klein, a spokeswoman for Sea Island Resorts, said the partnership makes sense because it brings in a new set of wealthy travelers who otherwise might never have set foot on Sea Island.

"It's a way to bring in their members and expose them to The Cloister," she said.

Every Exclusive Resorts home is outfitted with the same home-entertainment systems and the same remote control, so members always know how it works. The homes' architectural features are tweaked to fit with local flavor. And resort locations are almost always four-bedroom homes with open floor plans to facilitate large family gatherings.

Dale Sorensen, 67, of Vero Beach, Fla., joined the club two years ago and said it is ideal for people who like to travel with extended families and travel to new places.

"Virtually all of the destinations, except the ones in the big cities, are four- and five-bedroom homes, which makes for a nice family vacation," said Sorensen, who owns his own real estate business and looked closely at the club's financial statements before joining.

He said travel at peak times like Christmas can require some advance planning, but since he owns his own business he has more flexibility in when he travels. The dues, he said, are a relative bargain compared to what he had been spending on vacation home rentals or multiple rooms at luxury hotels.

If you go Exclusive Resorts; 800-447-8988

Jamie Cheng, editor of the Helium Report, which provides research and analysis on destination clubs and other luxury products, said the bankruptcy of industry player Tanner and Haley does not appear to have slowed the luxury travel-club business. But he said consumers are asking thorough questions and doing research before choosing a club.

"People are looking for the clubs that are fiscally responsible," he said.

Millions of millionaires
Many of Tanner and Haley's old customers are now members of Ultimate Resort, the second largest destination club, said Ultimate Resort CEO Jim Tousignant. Ultimate Resort, based in Orlando, Fla., purchased Tanner and Haley's real estate portfolio in bankruptcy, and allowed members to join Ultimate Resort without paying a membership deposit.

Tousignant said the majority of former Tanner and Haley customers are now dues-paying Ultimate Resort members, including many who have upgraded their memberships. Last month, Ultimate Resort announced plans to merge with another club, Private Escapes, giving the combined entity 1,200 members.

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Both Exclusive Resorts and Ultimate Resorts say the opportunities for growth are tremendous. Three million Americans are worth $5 million or more, the target demographic for Exclusive Resorts. And with 10 million Americans worth more than $2 million, Davis said he can envision a scaled-down version of the club that would cater to that demographic.

For now, Exclusive Resorts focuses near the high end, while Ultimate Resort offers a variety of options. The average home in Exclusive Resorts' portfolio is worth about $3 million, compared to the $1 million or $2 million homes that might be offered by lower-end clubs.

"I really think this concept will change the way we take vacations," said Davis.

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