The co-founder of AOL and former Chairman of Time Warner is the majority shareholder and Chairman of destination club Exclusive Resorts. In a recent interview he shared his views on the club and how he saw it developing.
Early on in the interview, and showing his belief in the whole destination club concept behind Exclusive Resorts, he made the strong statement that "I think I'll be owning it forever". You can see the full interview here, with his main comments about Exclusive Resorts starting at about the 5 minute mark.
Steve talked a lot about the value a destination club offers and the reasons for joining, noting that it doesn't make sense for many people to buy a vacation home saying "It's crazy to buy a home and deal with all the costs and hassles of that". More specifically, he said people are thinking " I don't really want to go buy a home for $3m and spend hundreds of thousands of dollars maintaining it and only to use it a few times a year". It's certainly better value and offers more choice to join a destination club rather than to buy a second home, we've summarised the differences and pros and cons between the two in this earlier article.
When asked how the club was doing Steve commented that it had over 3,000 members and had sold over $1bn in memberships in the last 5 years, but that 2009 was definately the slowest year for new members joining. He said that the club was "seeing a bit of an uptick, December was strong" and continued "we'll have a decent year in 2010 and probably we'll accelerate from there".The Services
A large part of the benefits of joining a destination club is the level of service that members receive. Everything from helping to arrange travel, to booking theater tickets, golf tee times, restaurants, to organizing nannies or private chefs. The whole idea is to have a hassle free relaxing vacation. "People love the service, and so we'll never cut back on the amenities ......the last survey showed 96% member satisfaction" said Steve Case and continued "People love the experience".Compared to Hotels
Steve Case originally invested in Exclusive Resorts after personally experiencing the far from ideal vacation experience, of either rental homes or hotels. "The home experience is a better family experience, if you want to bring people together" he said. "It's probably not good enough to simply rent a hotel room or several hotel rooms and hope the connecting doors work," he continued, sounding as if he was speaking from experience.Recent Changes
The CNBC interviewers asked him how the business was and he replied "The club is pretty stable, ....so we're seeing some people who want to leave and some come in". This has been the case with all the destination clubs, that because of the recession and changing personal circumstances, some members have decided to leave. We've heard unconfirmed rumors that Steve Case recently invested several tens of millions of dollars in the club and told the interviewers "in 2011 it will be break even, assuming no real estate sales and no new member sales".
Members who joined the club in it's early years have been paying significantly lower membership fees and Steve noted they are "moving everyone to a common structure and in 2011 everyone will be paying the same dues" and what's more he said "dues will cover all operating costs." This is a key factor for the clubs nowadays, that they have all needed to adjust to.
The new membership fee and dues structure for Exclusive Resorts is set out in the table below. The key part of the changes that the club made was to bring all the levels of membership plan to parity in terms of the equivalent nightly rate. So whether you choose a 20 night plan or a 60 night plan the annual dues equate to $995 per night, and give you access to all of the clubs 400+ homes around the world.
Annual Plan Days
|Space Available Window||30 days||45 days||60 days||75 days||90 days||90 days|
Overall Steve Case sounded fairly positive about the future for Exclusive Resorts.