2006 was a busy and eventful year for the destination club industry. No more so than for Quintess. A Quintess member recently provided us with a summary of a recent club member communication. Here are the highlights:

• Quintess recently hit 300 members, which is up from 90 the year before. We know most of the growth is from acquiring Dream Catcher Retreats and Leading Hotels of the World. Members now have access to 49 homes in 26 locations.
• The charter membership program will conclude at the end of February. Here is how the program works: the Charter Membership deposit increases in value. For example, the current Charter Premium Unlimited Membership with Holiday Use deposit price is $375,000 with a potential upside cap of $600,000. After two years of membership and upon exit, potential deposit return is 80% of the then-current deposit, up to $480,000. Frankly we are surprised that Quintess is still offering this – we think it’s a generous offer – and assuming that club deposit fees continue to increase, it has real value.
• For new members, within the first year, 100% of the membership deposit paid is returned upon resignation for any reason, once three new members join. Other clubs have been offering this as well – reminds us to do a quick survey and find out how many other clubs are still doing this.
• A new member-referral reward program was launched, which rewards members for bringing their friends into the club with their choice of additional nights usage and booking privileges, private chef services, complimentary air fare and more.
• The parent company of Quintesss announced in September a $10 million equity fund raising proposal, and since investor response was strong the club closed the equity round with $14 million.

Helium Report Perspective

Two clubs, Quintess and Ultimate Resort, both via acquisition, have made a bid to be considered the “alternative” to Exclusive Resorts in the minds of prospective members. They form, along with Private Escapes, a group of clubs that each have over 300 members, and all are settling on a similar approach to the non-equity club business: 80% refundable deposit (based on three-in, one-out), limited use of leasing homes, some degree of financial transparency to assume members of their stability (at least in concept). So these clubs are looking more like Exclusive Resorts than not.

But with some important differences. In the case of Quintess, the 100% deposit refund in the first year provides peace of mind to a prospective member who is new the destination club concept – as most people are. We also like that they are formalizing their member referral program. We think that encouraging and rewarding referrals will drive down membership sales costs.

But the real test is what current members think – so if you are one, send us your feedback at tips@heliumreport.com or better yet, write a review for Quintess here.