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The Halogen Guides Take: Are Destination Club Plans Too Confusing?
| Written by Alec Rosekrans 05/13/2008 |
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One of the main draws of destination club membership is the promise of simplicity. No more worrying about the upkeep of a second home. No more hours spent researching hotels, villas or hot destinations for your next trip. Just book your week at one of your club’s many homes and you’re done. But if being a member of a destination club means the end of your vacation planning headaches, choosing among a club’s myriad tiers of memberships is no doubt its own challenge.
These days a single destination club might have six, 12 or even 15 separate plan options. Quintess, LRW offers no fewer than 12 tiers of membership, depending on both the number of nights and whether holiday reservations are included. Ultimate Resort has ten membership plans; five for homes with an average value of $1.5 million, and five for homes with an average of $3 million, while the soon to launch Ultimate Escapes, a marriage between Private Escapes and Ultimate Resort, will boast 15 plans across three separate tiers of clubs. Exclusive Resort just increased the number of plans in their line-up from four to six. Sure, there are clubs like the Lusso Collection with one level of membership, but the trend over the last year has been for clubs to rollout more plans, rather than streamline offerings.
The good news? Consumers have more choices. The bad news? Well, consumers have more choices, which can require even more number crunching to get to that bottom line out of pocket cost. While it’s clear that the destination clubs are offering more plans in an effort to accommodate the varying vacation preferences of members, the profusion of membership levels could potentially confuse the consumer, especially when clubs offer holiday reservations as an extra or tack on friends and family access as a bonus fee.
Industry leader Exclusive Resorts’ new membership matrix seems like a step in the right direction. They’ve done away with names for their various membership tiers (the standard practice seems to be a gradation of slightly more superlative names for each level) in favor plans named after the number of days they include. But in the same breath, the destination club giant managed to muddle the offering by introducing a less than straightforward à la carte option for preferred holiday booking—a non-refundable, one time fee of $59,000 or $39,000 paid per week of holiday reservation allowance. Of course the number of weeks of holiday reservations you can book depends on your membership tier, and the plans force you to put a premium on one set of holiday versus another. And there’s no guarantee for any specific holiday, only for one of those holidays.
The challenge for destination clubs is to accommodate a wide variety of tastes and habits while presenting a cohesive and compelling product to potential members. This is no small feat when factors as wide-ranging as holiday availability, home value, reserved usage and space-available reservations must be considered. Most clubs would argue that the primary motivation in introducing new plans, and in changing preexisting membership schemes, is to accommodate consumer preference. But there is also a general trend towards offering more membership options with an entry level price tag, no doubt easier to swallow in a recession. This points to both the maturation of the industry as a whole as it moves beyond its initial high net worth target demographic to a broader mass affluent clientele as well as perhaps a recognition on the part of the clubs that in the current economic climate wealthy individuals may not be turning away from luxury habits, but they may be scaling back a bit.
With the destination club industry predicting solid growth into the future, it seems likely that we’ll see membership plans continue to multiply as the clubs seek to accommodate and court an expanding demographic. The challenge for clubs? Streamlining their sales pitch to new members.
Are there simply too many plans out there? How do you think destination clubs can best decipher their array of plans to potential members? Weigh in below.
For a comprehensive analysis of club plans in their many permutations, download our decision guide to destination clubs.
Reader Feedback
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From: RK@americanaffluenceresearchcenterTuesday, May, 20, 2008 at 05:53 PM
Yes, the plans are too complicated. KISS is a basic rule of marketing, especially when introducing a new concept and expecially when the basic concept is complicated like vacation clubs (and private residence clubs, which add to the confusion). It is understandable that the clubs want to offer choices to differentiate themselves and to attract the most prospects, but the net result has been negative as the club membership numbers have not grown in proportion to the growth in the number of clubs, the club marketing expenditures, and the exposure in the media. The thought of analyzing all of the various options is daunting and intimidating. The target consumer is one that generally makes reasoned and thoroughly considered decisions. I believe many of them are waiting to see how the industry shakes out (and what their peers have to say about their experience) before making a commitment.
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From: rayyedThursday, May, 22, 2008 at 08:09 AM
After working my way through the club universe, what became a torture was not necessarily the various levels and options, but sorting out the reservation rules. I think that I am not unique in that availability is the primary selection criteria (or at least the perception of availability). What I found very difficult was to build a decision tree on the complicated holiday reservation rules attached to each level of membership. With school/college age children we are relative inflexible in our holiday vacation schedules. This means hitting at least two to three prime holiday reservation dates per year. I certainly appreciate the challenge that the clubs face in putting something comprehensible forth, but when someone puts out over $300 thousand and then gets shut out at Christmas or New Years, one can imagine that the club will have a very, very unhappy customer. In the end, I simply joined the club that backed up their promises with confirmed reservations....two years out and what I thought was a sensible reservation policy.
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From: IndustryGuyTuesday, May, 13, 2008 at 07:53 PM
Not sure of there are too many, but would be interesting to look at the timeshare industry - what did that business do to make it simple to sell and consumers to buy.