Steve Case's luxury travel club grows
By ASSOCIATED PRESS
Published June 26, 2006
One might not necessarily imagine that multimillionaires confront limited options in planning their vacations.
But a company chaired by former America Online co-founder Steve Case is growing rapidly by offering a menu of luxury vacation options as part of a club that requires members to pony up $200,000 or more to access its $750-million portfolio of vacation properties throughout North America, the Caribbean and Europe.
Exclusive Resorts this month added its 2,000th member, which makes it by far the largest company in the fledgling destination club industry.
The company has announced a partnership with golfing legend Jack Nicklaus to expand its golf amenities, and a $72-million investment that will allow it to expand its roster of nearly 300 vacation homes in 35 destinations.
Case, who bought the club in its infancy in 2003 when it had fewer than 50 members, said he knew the idea was a winner from the start. He bought the company over breakfast after an initial presentation.
"I thought it was brilliant. It was one of those why-didn't-I-think-of-that moments," Case said.
Here's how it works: Members pay a one-time up-front fee ranging from $195,000 to $395,000, which gets them between 15 and 45 days at any of the club's destinations, including the Virgin Islands, Costa Rica, Lake Tahoe, the French Alps and Tuscany. They also pay annual dues ranging from $9,500 to $25,000, again depending on how many vacation days they want. When a member leaves the club, he gets back 80 percent of his membership fee. While the figures sound steep, Case says it's affordable when compared to buying a vacation home.
Jamie Cheng, co-founder of the Helium Report, which provides research and analysis for the wealthy on various products, including destination clubs, said Exclusive Resorts is the industry leader in a rapidly growing niche of the travel sector.
The industry has perhaps 4,000 or so members, Cheng said, but there are easily 1-million Americans or more who could afford a membership.
"As people get more comfortable with the idea, and as the clubs do a better job of explaining it, we think there's a lot of growth potential," he said.
Case acknowledged that people often return to the same vacation spots year after year because they like familiarity. But he thinks people sometimes lock themselves into the same location because they worry about the hassle of dealing with a new location.
Exclusive Resorts counters that by trying to offer some consistency at its sites. For instance, every home has the same model of plasma screen TV and the same remote control. The company keeps a list of its members' preferred groceries and makes sure the refrigerator and pantry are stocked with the right variety of wine for the grownups and the right breakfast cereal for the kids.
Concierge service makes sure ski lift tickets are waiting for families on arrival. Tee times are made. Chefs and masseuses are available.
Perhaps the best indication of the club's success is that the average member books nearly seven separate reservations a year through the club, often taking vacations of two or three days. The club's chief executive, Donn Davis, said many members take more frequent vacations than they initially anticipated because the hassles of vacationing have been eliminated.