Destination Clubs and Private Residence Clubs have a lot in common. The terminology can be confusing and the lines between these two are getting increasingly blurry. In many cases the terms are used interchangeably so you'll find some companies that might fit closer to a Destination Club (definition), but which refer to themselves as Private Residence Clubs (definition).

Destination Club Home in Telluride
Destination Club Home in Telluride

Both of them are alternatives to fully owning a luxury second home, or renting luxury vacation villas and both offer impeccably furnished, luxurious accommodation. Both also provide very high levels of service to their members and owners. So if you're considering buying one of these products we certainly recommend that you look at the other. Both require an initial upfront payment to purchase a membership or share and then both have annual dues or maintenance payments.

One Location or Many?

The most important difference is that with Private Residence Clubs (PRC) you are buying a share in one property in one location. They are therefore great for folks who know that they want to go back to the same location year after year. Some of the PRC's also offer the opportunity to swap your time and location with other locations within their group or with other affiliates. Destination Clubs on the other hand provide access to a wide variety of properties, often spread throughout the world, and may also provide access to specialised travel and tours. Members in Destination Clubs have a variety of locations to choose from each time they go on vacation.

Membership Type

Private Residence Clubs usually offer true deeded fractional ownership in real estate. Many Destination Clubs offer an "equity" participation in one form or another, either directly, by being structured as an investment company or indirectly by offering members a share in the increased value of the properties. Members in the other "non-equity" Destination Clubs are essentially renting access to the homes and services, and members don't have an ownership interest in the properties. There's no "right" answer to this structure - it really depends what your objectives and desires are, and what you feel comfortable with. Owners of Private Residence Clubs own actual real estate and have a title and deed. As such they can gain or lose as the real estate values move with the market.

Number of Owner/Members

One other difference is the member, or owner, to property ratio. For Destination Clubs this is typically 6:1 (ie 6 members for every property in the club), but for PRC's the ratio is typically 8:1 or 10:1, so that each property has 8 owners. With the lower ratio, Destination Clubs, can offer their members more flexibility which can help with booking the property they want when they want. It also means that Destination Club properties are only in use about 55% - 70% of the time when averaged across the year. However Destination Club homes in seasonal locations, such as ski resorts in winter, will get booked by members well in advance and can be at 100% occupancy during these peak times. PRC's have a variety of reservation systems for sharing out time, including peak periods and holiday periods, amongst their owners.

Homes & Residences

Private Residence Club homes are nearly always luxury condominium style residences and usually offer a mix of 2 or 3  bedroom units, and sometimes one or four bedroom units. Sometimes they are co-located with a five star hotel and provide access to all the hotel facilities. Destination Club homes tend to be larger 3, 4 or 5 bedroom residences and are often free standing homes, although in cities such as London or New York they are typically 2 or 3 bedroom apartments.

The table below sets out some of the key differences.

 Feature  Destination Clubs  Private Residence Clubs
 Investment Type   Either membership, or ownership  Ownership
 Legal Nature  Membership contract, or investment  Fee simple deed
 Returned on Exit  Varies with structure
 Market price, gain or loss
 Typical Property Characteristics  Luxury separate homes  Luxury condominium units
 Typical Days Use  10 - 60,   28 - 90
 Property sizes  1,500 sqft (city), to 6,000+ sqft   to 2,500+ sqft
 Typical Bedrooms  2/3/4/5 +  1/2/3 +
 Other Properties   5 - 200  (Usually) exchange system

For more specific details on any particular club, see the sections on Private Residence Clubs and Destination Clubs.

Partner Message

NBAA BACE 2022 - Business Aviation Conference