The most recent announcement from Exclusive Resorts demonstrates the company’s willingness to define what the destination club experience is, yet also raises some questions that deserve some closer examination. Its latest program is called Once in a Lifetime experiences, and they include:

• Private members-only cruise aboard the Yachts of Seabourn
• Cultural immersion tour of the Kingdom of Bhutan
• Naturalist’s expedition to the Galapagos Islands, and
• African safari adventures, from your own villa near Mt. Kilamanjaro.

These unique and ultra-luxury tours are seven to ten days in duration, require that the member use an advance reservation, and also carry an additional daily charge – which looks to be nominal when compared to the cost of the trips.

So, what’s going on here? Destination clubs have been about providing access to luxury homes all over the globe – real estate that was mostly owned by the club to back up refund obligations. Yet, now Exclusive Resorts has decided to add luxury tours to the menu – a product that consumers can get from Abercrombie & Kent, Butterfield and Robinson and other luxury tour outfitters. Confused? So are we. It may be that members have been asking for even more variety in their travels, and since you can’t buy homes in every corner of the world, organizing tours is one way to get there.

Perhaps the fact that real estate development takes longer to bring homes online (than buying them retail), Exclusive Resorts is using these tours as a way to alleviate some availability issues – they have also recently instituted a hold on new memberships, probably for 90 days.

We will call senior management next week and see if we can learn more about why they have added this program. Our initial concern is that these tours look to be ultra-luxury and the daily fee from the member does not come close to covering the cost.

As a member however, you’d want the bulk of your membership deposit and annual dues covering the acquisition and maintenance of real estate – real assets, not covering the cost of tours. At the end of the day, what members want most is that Exclusive Resorts or any destination club pass the Net Asset Test (or something very similar), and also provide the opportunity for great vacations. Perhaps a combination of luxury homes and luxury tours will do this – but it can’t be at the expense of financial stability or home availability. More on this later.