With regards to Membership, we have identified four important areas:

(1) Profile
What is the social, family, and economic profile of the membership base and are you a good fit? Will the club be run in a way that is consistent with what you will want and need? For example, do the homes offer family-friendly amenities or is there a big emphasis on golf? Many properties are purchased in locations that are really only good for golf but not optimal for parents traveling with young kids. Exclusive Resorts has a big investment in the Phoenix area that would not appeal to a family demographic yet could be ideal for active baby boomers in early retirement.

(2) Membership Totals
In particular, is there a target number for total members? If that target is met, is another club formed or are more homes added? We prefer the model where more homes are added, so that clubs cannot avoid early, initial problems by simply starting a second club.

How does the club count the number of members? We ask to see the number of parties that can book vacations at the same time. The total number reflects the number of people with whom you are competing for homes at busy times of the year. Pay attention to any related family member rules, too. You want flexibility for your own use, but you probably don’t want houses full of college-aged kids partying on spring break.

(3) Rules and Fees
Some questions to ask include: Are the rules and fees competitive, including transfer fees? Also, if there are new benefits or plans, can all members take advantage of them? What have been annual dues increases?

We expect that clubs will raise annual dues to the allowable maximum in their member contract as they will find that the cost of maintaining homes in great condition, operating good onsite concierge services, and providing customer service will escalate. These costs could exceed their assumptions in their original plans, so you should inquire about these types of potential surprises.

(4) Satisfaction
Is there a waiting list to get out or in? Will the club be frank with you about what their member satisfaction issues have been? The level of transparency varies from club to club. Some are more forthcoming but their answers may be misleading.

Summary
We recommend you speak with at least 4 to 6 current members before joining – charter members or investors excluded. Make an effort to probe and find the issues that affected their use and enjoyment of the club.

You want to hear from the club, not that there have been no issues and all their members are very happy, but that there have been issues and how the club has responded. The reality is that destination clubs are a new concept, and no one has completely figured the model out yet.

You need to get a strong impression that the club management faces issues and uses good sense to solve them. At the same time, the team balances their desire to keep you happy but also keep the club viable. Spending too much money and causing the club to fail operationally will not get your money back in the long run.

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