posted by Desties on Nov 10
These are tough times for the destination club industry, but no one is having it harder than High Country Club. The club is facing an implosion if enough members don’t buy into the company’s “Success Plan” this month.
Ultimate Escapes is in a position to help.
Forget a buyout. High Country Club supposedly owes more on their properties than they are currently worth in resale, and the CEO’s stern warning that liquidation of the club won’t likely leave any funds to repay member deposits implies that acquiring members is also a liability.
However, as the new entry-level destination club (with High Country Club temporarily ceasing the marketing of new memberships), Ultimate Escapes is in a great position to offer disenchanted HCC members another way out.
The proposed new HCC dues to keep the club afloat are within spitting distance of what Ultimate Escapes Premiere is charging. Once you factor in the more DC-centric features of Ultimate Escapes (greater booking flexibility, lack of exit cleaning fees, the presence of a local host to tackle grassroots problems, serve as concierge, and stock requested groceries) it’s arguably a better deal.
The rub, of course, is that High Country Club members are unlikely to fork over new deposits to a second club. The negative equity of HCC makes UE unlikely to take on members with a lack of deposit funds.
However, if — and only IF — the HCC Success Plan falters, why doesn’t UE take in the HCC members with “dues only” memberships?
UE has the same problem that all of its peers have at the moment. Membership growth has stalled. In fact, going by UE’s own marketing materials, one can deduce that several of the Private Escapes members (in the dozens, since recruitment emails to the public have gone from touting a club with “1400 members” in mid-August to “more than 1300 members” today) decided not to stick around after the merger with Ultimate Resorts to form Ultimate Escapes.
In other words, Ultimate Escapes could use more members. Since every club’s goal these days is to bump up occupancy levels, it also makes better sense to take on new “dues only” members than to unload properties.
I know. Dues pay for maintenance fees but deposits pay for new homes. Taking on SOME of the HCC members won’t bankroll new properties. It doesn’t have to, as long as the move wins over “dozens” of HCC members instead of “hundreds” — which in of itself wouldn’t be a bad problem to have.
The beauty, of course, is that UE can offer HCC members the “dues only” memberships for a limited time. Let’s say, for instance, it offers folks who can confirm that they were HCC members a “dues only” deal for the next 2-3 years. At that point they would have to pay a deposit to continue as members. This would give HCC members a sampling of the club and it would also give UE bodies to ride out the near-term slump.
It’s a win-win, and that’s rare these days.