The first thing that a consumer typically considers before buying into a destination club is the initial refundable deposit, which is discussed at greater length in Helium Report’s Decision Guide to Destination Clubs. Simplicity is a virtue, however, and some consumers might appreciate One Key’s elimination of the deposit.

Destination clubs typically use the refundable deposit to acquire new properties. One Key’s approach of all leased properties eliminates the need for the big upfront negative cash flow for members. The club supports its operations with the yearly fee charged by all clubs. They offer two basic plans: 15 or 25 nights that cost $34,900 and $49,900 yearly. This method is not unusual in the private jet industry, but One Key is the first company to bring it to the destination club market. Incidentally, Marquis Jet’s former VP, Jay Sapovits, is One Key’s founder and CEO. We spoke with Sapovits about their model and competitive advantage.

“One Key is the next generation destination club,” said Sapovits. “We recognize that writing a six-figure check isn’t easy, especially if you don’t have the time to enjoy the large nightly commitment per year.” In fact, six-figure membership fees aren’t uncommon for a club like Exclusive Resorts, for example, whose 2,400+ members paid over $400,000 for their deposits. Another club called Solstice asks $875,000 and boasts 70+ members.

Helium Report’s cost-per-night analysis shows an average over the top five clubs in the neighborhood of $2,100, considering a 10% cost of capital. One Key’s average price per night of $2,200 is comparable to the other clubs during non-peak travel time. Nights are debited on a 2-to-1 basis during 6 designated peak travel weeks, doubling the cost-per –night on highly coveted vacation weeks. “One Key provides highly desirable locations and impeccable homes that are not available on the rental market,” said Sapovits. “The perceived premium covers the guaranteed availability of the location you want, when you want it, as well as the certainty of staying in a house that exceeds your expectations.”

We asked Sapovits what One Key’s competitive advantage is compared to operators such as Abercombie & Kent. One Key appears to operate like a high-end travel agent or villa broker with additional concierge services; “We really think of ourselves as a destination club,” said Sapovits. “We offer outstanding service and amenities. Travel agencies tend to focus on specific areas, mostly outside the US. We have a competitive line-up of properties domestically as well as internationally. Most importantly, we pre-verify all homes in our portfolio make sure they reflect the excellent standards [that] our members expect.”

Helium Report’s Perspective

One Key’s lease approach is geared to focus on customer experience rather than on asset acquisition. The premium charged by One Key buys additional flexibility, both in terms of location and travel time, along with the freedom from traditional destination clubs’ inherent long-term commitment, high cost of entry or restrictive reservation policies.

With a hybrid approach offering the services of a destination club with the flexibility of a villa broker, One Key is positioned to stir up competition as more people potentially buy into this model. As the network of One Key members grows, customer satisfaction will be the real metric on which this particular club will be measured. We are looking forward to hear from One Key club members. If you are a One Key member, please write a review.

If you are considering joining a destination club, Helium Report offers a free Decision Guide to Destination Clubs (PDF), which offers expert guidance in the research process.