Destination clubs are a relatively new and fast-growing part of the luxury travel market, making it possible to take advantage of a wonderful portfolio of holiday homes without the management headaches and expenditure of private ownership.

Typically, destination club members receive access to a portfolio of large, furnished holiday homes, usually in resort destinations around the world. Members can book time in the homes, and pay an initial deposit and annual dues for the privilege.

The history
The first destination club was launched in 1998, and the industry has grown quickly since then, with more than 20 destination clubs managing a total of more than 600 homes around the world.

The benefits of belonging to a destination club
Destination clubs offer a unique set of benefits - much more space than a typical hotel; a wider range of destination options than traditional holiday home ownership; a very high level of service; financial advantages over direct home ownership; concierge and travel assistance and so on. These points of difference add up to a big advantage over luxury hotels, villa rentals, private residence clubs, and second home ownership.

The target market
Most destination clubs are aimed at members with families, and often include homes large enough for a second family also. Homes are typically 2,500 to 7,000 square feet, with luxury fittings, furniture, kitchens and electronic goods.

What’s the difference between a destination club and a private residence club?
Essentially, private residence clubs offer a similar ‘product’ but in a single location.

How do these clubs make money?
Destination clubs make money by retaining the non-refundable portion of member deposits (typically, this is 20% of $250,000 - 1,000,000), and through the appreciation in value of the portfolio homes. The clubs take on debt to finance their purchases, and some clubs lease some or all of their homes to minimize their capital requirements. The annual dues that members pay typically cover the cost of operating the homes, plus a modest profit. This is important, of course, because a company that makes no money won’t stay in business, and that’s not what anyone wants!

Isn’t this just a form of timeshare?
Actually, it’s quite different. For a start, members have access to multiple locations and they don’t usually have any deeded ownership in the real estate itself - some clubs DO offer equity ownership options, though, and these have been quite popular.

What if I already have a holiday home?
Interestingly, a good number of destination club members actually own second or third homes, and view the destination club as a complement to their other properties.

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