|
|
| |
| |
 |
|
 |
|
The Most Expensive Membership Clubs
Forbes.com, Sophia Banay
|
Article Excerpt
A vacation home by the beach alone doesn't cut it anymore. These days, millionaires and billionaires want estates in England, condos in New York, pied a terres in Paris and chalets in Gstaad--plus the beach house and more. Thanks to the relatively new phenomenon of private membership clubs, they are getting them--along with staff to run them, and yachts and private jets to take them there.
"Fractional resort real estate has emerged as the fastest growing--and very often most profitable--segment of the resort real estate industry in North America," says Jon Peterson, president of the Washington-based Peterson Economics, a real estate consulting firm. "And private membership clubs are the fastest-growing segment of the fractional industry."
While not all private membership clubs, also known as resort or destination clubs, offer their members an ownership stake in the clubs' properties, these clubs represent the top tier of luxury vacationing, with members paying a one-time initiation fee of up to $4 million, annual dues of up to $67,500 and sometimes even daily fees of as much as $650, for the use of multi-million dollar castles, condominiums and hotel suites in some of the world's most beautiful, and exclusive, corners.
...Guy Hale, a management consultant from the San Francisco Bay area, joined the golf-specific Markers -- Golfers' Residence Club in Utah last May and is taking full advantage of his membership. "I do a lot of traveling for business, and a lot of the courses that I play I've combined with business trips. It's like a fantasy for a golfer--we have tournaments, equipment discounts, Bruce Summerhays [a PGA professional on the Markers advisory committee] and other pros holding clinics and lessons." In addition, Hale says he has networked with other members who belong to different private golf clubs, giving him access to a whole new set of private courses. "It blends a second-home concept with a sport I'm passionate about: This is a dream retirement," says Hale.
The fee system at clubs like … The Markers is based on a country-club model. Upon exiting the club, members receive between 80% and 100% of their deposit back--and sometimes more, with property values (and, therefore, club membership values) appreciating. Still, "private membership clubs are luxury items, not investments," says Matt Budjack, an analyst at Oregon-based Ragatz Associates, a consulting firm to the resort industry. "Annual dues can be well over $35,000 per year for maintenance and concierge services, and those aren't refundable." Because members have no direct ownership of the club properties (instead, they have a stake in the club itself, which in turn owns the properties), annual dues are not even partially tax refundable.
On top of that, additional nightly fees and variable transfer fees of up to 20% deducted from the refunded membership deposit can mean that "a lot of math goes into calculating the cost of an average night of use," says Budjack.
But potential members don't seem to mind. When Ragatz Associates first surveyed the membership club sector in 2003, they found membership sales of at least $130 million. Figures for 2004 indicated that membership sales had generated at least $450 million--and that was with a response rate of less than 100%. If that pace continues, the industry could generate over a billion dollars in 2005. "Membership clubs are definitely catching on," Budjack concludes.
|
|
|
|
|
|
| |
