Paul Crowe, chief executive at Ireland’s The Oyster Circle destination club, is the latest executive to feature in our series of interviews with the people heading up destination clubs around the world. For more information on the club, please see the Luxury Reporter overview of The Oyster Circle.

The Oyster Circle’s Chamonix chateau

LR: Good morning Paul. For whom is The Oyster Circle a natural choice, do you think, and why? Feel free to describe a ‘typical’ scenario, if you like.

PC: The Oyster Circle is really aimed at individuals who desire to take most of their vacations in Europe. Whilst we have luxury homes all over the world, the majority will be in Europe. For example I am currently working on finishing the interiors on three new homes in Lake Garda – Italy, St Tropez – France, and Les Trois Valleés, France.

We have found that the type of individuals who join are High Earners who need the comprehensive level of service and planning we provide. They are often time poor and we introduce a large degree of organisation into their lives. Currently the majority of Members are British or Irish but we have been successful in attracting Members who are American nationals based both in the US and in mainland Europe.

LR: Can you explain for us the differences in your plan levels, and the reasons people choose each of them? Can you tell us which is the most popular?

PC: We have kept the plan options very simple. They are as follows:
Individual Preference Share (Entrance Fee) € 300,000 (1 Membership nominee)
Corporate Preference Share (Entrance Fee) € 360,000 (Up to 5 Membership nominees)

Individual Annual Subscription 28 days usage - € 20,000
Individual Annual Subscription 35 days usage - € 24,000
Corporate Annual Subscription 35 days usage - € 28,800

The Individual 35 day option is the most popular.

LR: What do you think are the most important questions a prospective member should ask of a destination club? Any questions that people tend to forget?

PC: Who are the backers and what resources do they have?
Are your properties let to non-Members?

LR: How do you respond to the very common (and important) question ‘What guarantee do I have that I will always be able to receive a refund of my membership deposit?’

PC: We are able to inform Members of the background and scale of the original investors. We also purchase the majority of homes and in fact by the time we fill the Membership, we will own all our homes. This gives the company a firm asset basis.

LR: Equity-based destination clubs seem to be gaining popularity. Do you think the trend will continue, and what do you see as the strengths and weaknesses of that model compared with the options you offer?

PC: I think the equity based option will expand and in fact we are privately offering this option to our existing Members. The main weakness is that the focus between lifestyle and financial return can get blurred and standards can suffer. Our primary focus is on the quality of lifestyle which we offer our Members.

LR: Service is a huge part of what destination clubs offer their members, but it’s not always clear to prospective members just what they might be able to expect. Can you give us any examples of times when your staff have been able to go the extra mile, or help out in unusual situations?

PC: We are highly service orientated and leave no stone unturned when it comes to looking after our Members. Some examples of things we have been able to organise include guided truffle hunts in the woods close to our Farmhouse in Umbria to taking a family by torchlight on dog sleds for dinner in an alpine cabin.

LR: What’s on the horizon for the company?

PC: We are expanding further in mainland Europe, as you can see above, mainly due to the fact that this is were our Members want to take the bulk of their holidays. In the New Year we will be focusing on adding more city destinations to strengthen our short break options.

LR: What’s on the horizon for the industry as a whole?

PC: I think in the US consolidation will continue to happen. I expect to see new entrants in the European market and also there will be the advent of new clubs in the Far East to service the vast increasingly affluent populations there.

OUR ANALYSIS

The Oyster Circle is one of the few destination clubs that’s so strongly focused on Europe as a destination. That alone is a significant point of difference, although the American clubs are starting to step up their acquisitions in France and Italy particularly.

The club does have quite a simple fee structure. This seems like a small point, and isn’t important for members, but it does make a difference in a club’s ability to attract members. Prospective members don’t like having to tax themselves in an effort to understand pricing structures, usage rules and so on. It’s our opinion that destination clubs would do well to keep their membership options as simple as possible, but (to paraphrase Einstein) not too simple.

Paul’s comment about the importance of the backers is worth noting. It’s not only a question of resources, of course, but also track record in related industries, or in entrepreneurship in general. For example, one of New Zealand’s most successful entrepreneurs has just launched a destination club, and Mike Balfour (founder of Fitness First) is one of the founders of The Hideaways Club. This experience and history of success matters. The question of financial resources is not trivial either, of course, but be sure to understand just how much has been committed to a destination club. The fact that a club is backed by a very rich individual does not mean that it has access to all of his or her resources in tough times.

We don’t have any evidence to corroborate Paul’s remark about the possibility for equity-based destination clubs to have their standards drop as a consequence of their members being investors, but it’s an interesting idea. Anything is possible, of course, but the fact that members are owners in the true sense of the word should give them even more sway in matters concerning service levels. Equity-based clubs may attract more financially conservative members, and in time this could lead to downward pressure on service levels and annual dues, but we have not heard of this happening. What this does highlight is the need for any prospective member to discuss the club’s future with its sales team, and (ideally) with its senior managers. Changes to annual dues, usage rules, membership caps, member-to-home ratios, home locations and so on can all have a significant impact on your experiences as a destination club member.

Paul makes an excellent point about the emergence of destination clubs in Asia. This isn’t something we’ve seen yet, really, but we anticipate this occurring in the near future.

OTHER ARTICLES THAT MAY BE OF INTEREST

• The Oyster Circle
• LUSSO member survey
• Try before you buy
• Destination clubs - an overview
• An interview with The Hideaways Club MD