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Cost-Per-Night Analysis Update: Price of a Destination Club Membership is on the Rise

Written by Alec Rosekrans 07/22/2008
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Cost per night

Since we last published our cost-per-night analysis, we’ve seen the merger of Ultimate Resort and Private Escapes into Ultimate Escapes, price increases from Quintess, LRW, and a major plan restructuring from Exclusive Resorts.

The cost-per-night analysis is designed to help consumers measure the value of a destination club membership versus staying in a five-star hotel or renting a villa. While the upfront costs of destination club membership are apparent, they don’t necessarily make for an easy comparison with other vacation alternatives. For instance, how do the club’s membership deposits and yearly dues translate into nightly usage? Halogen Guides developed a cost-per-night-analysis in order to determine exactly this. (For a detailed explanation of how our formula works see this article.)

Once a quarter, we update our cost-per-night analysis to reflect price changes made by destination clubs. The average cost-per-night jumped more than $200 since March to $1,354. This figure refers to the basic cost-per-night, and not the opportunity cost which factors in the money which could be potentially earned from investing elsewhere. When you factor in opportunity cost (our model assumes a five percent annual return) the figure jumps to $2,185 per night. Our analysis also assumes that a member is part of a destination club for ten years.

While we tried to design our analysis to allow for easy comparison between clubs, it should be noted that some factors cannot be accounted for in this basic model. For example, Exclusive Resorts charges a one-time premium of $79,000 for members looking to book during Christmas, New Years or President’s Day holidays or $49,000 to book during spring break week, the Fourth of July or Thanksgiving holiday period, a service that most other clubs price into their membership deposits. In an upcoming article we’ll be looking at how the cost-per-night of an Exclusive Resorts membership is impacted by add-ons like holiday access and extended family access. We’ll also preview how Exclusive Resorts’ planned 20 percent membership deposit hike, to take effect at the end of August, will impact the cost-per-night.

One notable absence from our analysis is Abercrombie & Kent Residence Club. While club executives are keeping plan specifics under wraps, they did release their own calculated cost-per-night figure for a mid-level 30-night plan. At $1,212 per night that plan is priced competitively with comparable clubs’ offerings, especially considering that privileges like holiday reservations and the rights for extended family use are included.

To download a copy of our updated cost-per-night analysis, click here.

Reader Feedback

  • From: DC4MSTuesday, July, 22, 2008 at 11:47 AM

    Exclusive Resorts now charges $79,000 for Peak Holiday and $49,000 for Select Holiday access. http://www.destinationclubforums.com/f5/exclusive-resorts-increases-optional-priority-holiday-1010.html

  • From: DCerWednesday, July, 23, 2008 at 04:23 AM

    A big deficiency in the Halogen numbers that makes it hard to compare clubs is when you can receive a higher deposit return than what is paid in. The Sherpareport spreadsheets at least include that important variable. If I put in 500K and receive 400K when I leave, that is a big difference from receiving 500K or 1M 10 years later like other clubs based on normal assumptions. If the clubs that keep 20% and the appreciation include it in their numbers shown to investors, why wouldn't a potential member include in their numbers the 100% return or appreciation that other clubs offer.

  • From: arosekransWednesday, July, 23, 2008 at 09:36 AM

    DCER, thanks for your comment. As you'll see our cost-per-night analysis includes a column titled "% Refundable." For clubs which allow for an appreciation in the value of membership to be returned upon refund of the deposit, you can change the assumption to a number greater than 100%. Solstice for example allows for either a 100% refund of the deposit or 80% of the then value of membership. One of the strengths of our model is the ability to tweak any of the assumptions in any number of ways. That said even with club's which offer future value deposit refunds, there's no way of knowing just what that value may be.

  • From: arosekransWednesday, July, 23, 2008 at 01:20 PM

    DC4MS, thanks for the update on Exclusive Resort's increase in holiday booking surcharge (after just a few months too!...yeesh) I've changed the article to reflect this info.

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