Six months ago, Helium Report predicted Exclusive Resorts would soon announce a $1 billion real estate portfolio (click here for our Nov 2006 analysis). Today, Exclusive Resorts officially confirmed the estimate in a press release declaring the luxury vacation club “owns more real estate than all other destination clubs combined.”

Exclusive Resorts bundled three announcements together into today’s release. We’ve included links to our past coverage on each announcement.

• “Record-setting” $1 billion value of owned residential resort real estate (Helium Report article here)
• Agreements to acquire 50 more luxury residences (Helium Report article here, here, and here)
• “Once in a Lifetime” travel excursions (Helium Report exclusive interview here)

Exclusive Resorts now boasts over 300 residences in more than 35 resort destinations around the world. Another 150 are under construction. We spoke with COO Michael Beindorff last September about the destination club’s real estate development plans which forecasted a 33% increase in the number of homes by 2008.

Earlier this week, we wrote about their upcoming development in Sea Island, Georgia. Exclusive Resorts is developing 24 custom 4-bedroom residences near the Cloister Hotel – each home averaging 3,500 square feet with its own private pool.

The club is also developing ten condos at One Steamboat Place, a ski-in/ski-out luxury residence club developed by the Timbers Group. According to David Burden, CEO of Timbers, Exclusive Resorts own properties at each of the firm’s resorts, including Castello di Casole in Tuscany, Italy.

Additional real estate includes two-bedroom units in the Mandarin Oriental in Chicago. As with most urban residences for destination clubs, these condos will be smaller than resort residences and average 1,500 square feet.

Beindorff elaborated on the firm’s new “Once in a Lifetime” program in a phone interview with Helium Report analysts. Click here to see the story. Current trips include:

A cultural immersion tour of the Himalayan Kingdom of Bhutan A naturalist’s expedition to the Galapagos Islands A private Eastern African villa safari at the base of Mt. Kilimanjaro Ultra-luxury Exclusive Resorts members-only cruise in the Mediterranean

Helium Report Perspective

According to the release, Exclusive Resorts’ members average six trips each year (click here to read member reviews). As the largest destination club by member size, the luxury destination club also offers the broadest portfolio of residences to its several thousand members. Increasingly, Exclusive Resorts is developing ten to thirty residences simultaneously in a location while other destination clubs are looking to acquire one or two homes for its members.

The scale provides Exclusive Resorts with a cost advantage – both in the acquisition and development of its residences and in the firm’s ability to amortize operating costs across multiple units. For example, concierge services, housekeeping, and maintenance can service twenty clustered units far more cost effectively than a single home.

Smaller boutique destination clubs differentiate themselves by telling consumers their homes are unique and not part of a larger resort development. While a stand-alone home may appeal to some prospects, the more important metric a prospect should consider is not the number of homes in a destination, but rather the ability of a particular destination club to cover membership deposit obligations with real estate equity and cash. Indeed, Exclusive Resort’s billion dollar announcement further assures prospects that the destination club meets that “net asset test.”

For more information about destination clubs including a cost-per-night analysis and key due diligence questions, download our independent Decision Guide to Destination Clubs.