The Home You Don't OwnBy
The destination clubs business had been a fast-growing one until industry pioneer Tanner and Haley went under earlier this year. The business is sort of like time shares but customers are buying a share in the club not a share in a resort property. A membership fee of $350,000 plus $21,000 a year in dues buys you thirty days per year in luxurious homes like this one in Los Cabos owned by the destination club operator Quintess.
One hot selling point of the destination clubs is that their membership fees are party refundable—80% in Quintess’ case. That’s true if the company doesn’t fall into bankruptcy like Tanner and Haley. Quintess co-chairman Scott Anderson helped found the industry’s trade association and is pushing for standards. He’d like to see every operator disclose—as his company does—their assets and liabilities so members will know just how refundable their membership are. “There should be a statement from external auditor that shows the appraised value of property greater than refund obligation,” he says. By the way, the largest player in this business is AOL founder Steve Case’s Exclusive Resorts.
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