The $200 million merger between destination clubs Ultimate Resort and Private Escapes is set to close in early January forming a new venture, Ultimate Escapes. The combined company will offer members three separate clubs, each with five levels of plans, and a total of 140 homes in nearly 50 locations.

Private Escapes’ founder and CEO Richard Keith will become chairman of the new company (and co-CEO for a four to six month period) while Ultimate Resort’s CEO Jim Tousignant will be CEO of Ultimate Escapes.

The family of three clubs under the new brand represents a fusion of the plans at both Private Escapes and Ultimate Resort, which prior to the merger had offered members plan options based on the value of the homes. Ultimate Resort had two levels of membership, including Ultimate Resort Elite with homes averaging $3 million in value while Private Escapes had three separate clubs, with the high end Pinnacle level representing the most luxurious collection of real estate.

The new membership options

Under the new banner of Ultimate Escapes, club options will include Premier, an entry-level offering with a portfolio of homes averaging $1 million in value. The Pinnacle level of club will have homes worth $1.5 million to $2 million, while the Elite club will have homes valued at around $3 million. Each club will have five separate membership options that include various amounts of vacation time and advanced booking reservations. Membership prices for the new plans will jump about $20,000 from the prices of existing plans according to Tousignant.

The various levels of plans within each club will allow members to upgrade or downgrade their vacation options each year if needed, said Tousignant. Additionally members will be able book time at homes in other club’s portfolios on a limited basis. “We intend to provide some form of reciprocity,” said Tousignant, who oversaw Ultimate Resort’s acquisition of Tanner and Haley’s assets earlier this year. “If a member wants to go to Cabo and all of the homes in the club are booked, but there is availability in another level of club, they can book that home.”

Ultimate Escapes will be headquartered in Orlando, Fla. while operations will be run out of Private Escapes’ hub in Fort Collins, Colo. An additional operations center will be based out of Kansas City, Kan. and a new website for combined company will be launched upon completion of the merger.

With some 1,250 members, Ultimate Escapes will be the second largest club behind Exclusive Resorts, and with its size the club will begin to mimic the home buying strategies of the industry giant.

“The prototype going forward will be purchases of four, six or eight homes,” said,” said Keith, noting that such bulk purchases in a single development can yield attractive cost savings. Getting in early, said Keith, “can be 30 to 40 percent below the cost of the finished product.” And the softening of the real estate market has only meant more buying incentives from developers.

Keith will head up the real estate acquisition side of the business. The company is starting a real estate investment fund to fuel new home buying. “We will have a substantial war chest,” said Keith. He plans to have $10 million to $20 million invested in future real estate developments.

Ultimate Escapes will already have a large presence in some markets with 18 homes in Cabo San Lucas and 16 homes in New York. Members are now likely to see more private communities within resort developments, just as Exclusive Resorts and Quintess have done this year. This year, pre-merger, Ultimate Resort launched the first of its private enclaves on the Caribbean island, Nevis. The development, a former Tanner and Haley holding that Ultimate Resort had revamped, is a collection of seven villas on nine acres with a private beach, close to the Four Seasons Resort.

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