The destination club is reaching out to its suspended members with an offer to bring them back on board.
Earlier this year the destination club raised a special assessment from it's members, but at the time approximately 300 of the members did not participate in the assessment and so had their memberships suspended.
The club is making a new offer to these suspended members to have them reactivate their memberships and start traveling with the club again. I talked to Rich Keith, Chairman of Ultimate Escapes, the other day about this new offer.
Rich explained that the original assessment and resulting suspension was "no fun for anyone, but was absolutely the right thing to do (for the club)". He's talked to many of the suspended members and noted that several had chosen this route because they could not afford the assessment in the current economy, and others wanted to sit it out and see how the club fared.
As he candidly put it, "In January, we knew we had a big mountain to climb", but now the club has shed $18m in operating burn rate and he is "starting to get a little bullish" and is "pretty excited about 2010".
Ultimate is now lifting the suspension for any member and allowing members to return to active membership. In Rich's words there are two broad reasons why they are doing this :
- "Because nothing feels good about members that paid their deposits and dues but cannot travel, Ultimate wants people to enjoy their membership"
- The suspended members represent millions of dollars of annual dues and very simply the club wants the maximum number of members, in order to be a stronger, larger club. In other words Rich said "it's right thing for the business".
The reinstated members will still have to pay their annual dues in order to travel, but can defer their payment of the assessment until they resign, at which time the assessment will be deducted from the refundable portion of their membership deposit. This deferred assessment will carry an interest rate of 10%, which again can be paid out of the final deposit or can be paid each year.
The members who supported the original assessment, at the start of the year, received 3 "enrichments" as sweeteners for the deal:
- From 3 to 7 additional nights of usage for 3 years
- An amendment such that when they resign they now get 90% of the current value of membership deposit returned (whereas they had been getting 80%, so they receive an extra 10%)
- "Club credits" for the paid assessment
The members who are reactivated now will not receive these three "enrichments", and will also not be able to resign for 18 months, that is unless they subsequently pay the assessment.
Rich is "excited about having them come back" and joining the active "members (who) are traveling in record numbers and enjoying their travels".