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Exclusive Resorts Member Deposits Now 100 Percent Refundable? Not So Fast...
| Written by Alec Rosekrans 07/16/2008 |
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As we reported yesterday, Exclusive Resorts will be increasing the price of its membership plans by $20,000 on August 30. That’s not really too surprising, as the growth in destination clubs over the last few years has seen most of the players increase prices incrementally at least once a year. But as we looked over the breakdown of Exclusive Resorts plans that accompanied the club’s press release we were struck by what seemed, at first, to be a completely different pricing structure. The top row of the chart was taken up by an “initiation fee,” while down below we saw that the membership deposit was now “100% refundable.” Hadn’t Exclusive Resorts just announced that they were reducing the refundable portion of member deposits to 75 percent? Had Exclusive Resorts completely changed its business plan?
It turns out Exclusive Resorts plans haven’t undergone any fundamental change. Rather they’ve settled upon an alternative way of presenting their model to potential members. Exclusive Resorts has taken the nonrefundable portion of the deposit and termed that as an “initiation fee.” You’ll find that the breakdown is exactly the same, with members able to get back 75 percent of the money, both the initiation fee and the refundable deposit, put down.
So what’s behind this change? In part it meshes well with a promotion that the club is running until the end of the year. Until August 30, Exclusive Resorts is letting new members join by just paying the initiation fee while deferring payment of the full membership deposit until the end of the year. Of course, don’t doubt the marketing strength of this club. There’s a reason why Exclusive Resorts has over 3,000 members. Not only have they learned to keep members happy, but they’ve figured out the most effective means to market themselves, as well. Perhaps the move to a 75 percent refundable deposit earlier this year altered the way potential members compare their offering to clubs with refunds set at 80 percent?
Now that Exclusive Resorts has changed the way it presents its plans to consumers, will the other clubs follow? Given the strength of the Exclusive Resorts brand, they may just have to.
Destination club members, weigh in below. What do you think about this latest move by Exclusive Resorts?
Reader Feedback
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From: Just BrowsingThursday, July, 17, 2008 at 08:07 PM
This is a very gimmicky marketing ploy and one that I hope prospective members see through. Other clubs should make a point of NOT following this example so that ER remains as a glaring example of poor marketing.
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From: TxnTravlrThursday, July, 17, 2008 at 09:32 PM
Regarding one of your comments above, "Not only have they learned to keep members happy, but they’ve figured out the most effective means to market themselves, as well."... it seems that ER has no need to keep members happy, as they will reap benefits of member turnover, far greater than they would by keeping members! With a 25% "take" from exiting members, and new members paying continually higher prices, they stand to profit more from actually losing members... go figure!
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From: From an ER memberFriday, July, 18, 2008 at 11:16 AM
As a member of Exclusive Resorts, I must say I am a little disappointed in this marketing lingo the club is using. But I disagree with the comment above about the club benefiting from member turnover. They may take 20% of my deposit, but they are losing my $20K+ I pay a year in dues, not to mention my word-of-mouth power. If anything I think this show that even as the industry leader, the club is still very young and has a lot to learn. My family has loved every trip we've taken with ER and I do not regret joining one bit, but I would expect ER to at least know that target their consumer/member is very intelligent and trying to pull the wool over their eyes with marketing jargon like this doesn't behoove them...just makes them look more skeptical.
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From: DC ObserverThursday, July, 17, 2008 at 04:05 AM
This is clearly worrisome from a club that does not release its full financial status to prospective members. An established giant in good financial standing should not need this kind of marketing gimmick. The industry needs to move toward transparency not borderline deceptive marketing. I would be disappointed if the rest of the clubs follow along.