It looks like there is growing demand for a “value-oriented” destination club. High Country Club has quickly grown to 200 members, and 25 properties, up from 164 just two months ago. No doubt, some of this had to do with the “free dues for six months” offer that High Country had extended to prospects. The chart below estimates the destination club’s monthly member-count since we reported their 100-member milestone last July.

Our take: the member growth certainly implies that the market is responding well to a club that is offering a low membership entry point – based on smaller homes and reduced service levels (for example, no daily maid service).

However, as we have said on many occassions, clubs have to make sure that they take more money in than they spend – so we would expect High Country Club to end this promotion and attempt to sign new members at dues levels that reflect their real cost of owning and operating these homes. We understand that clubs use different promotions at certain times to drive membership sales – and we assume that their investors will provide the needed capital to do this.

But it’s not sustainable on a long term basis. In fact, at other clubs, annual dues are rising, reflecting the reality that delivering service requires people, and people are getting more expensive.