A&K

http://www.phnompenhpost.com/index....-Insider/who-wants-to-host-a-billionaire.html

"...The tour, organised by the Hong Kong office of Abercrombie & Kent, one of the world’s leading luxury travel companies, kicked off on November 7 with a brief overnight stay in Phnom Penh, where participants were greeted with a welcome dinner at the National Museum with special guests such as Roland Eng, former Cambodian Ambassador to the US....

"...European, Asian, US and Latin American business tycoons were part of the group, which also included US commercial aristocracy such as Peter Coors and his wife Marilyn. Coors is the chairman of Molson Coors Brewing Company and chairman of MillerCoors. He is the great grandson of the founder of the brewing empire, Adolph Coors, who set up the Golden Brewery in the US 1873.

Multinational media interests were also well represented, including the presence of high-profile American David Zucker. He is a former president and CEO of Playboy Enterprises, and former exec vice president of ESPN.

Other notables on the tour included Rumi Verjee, founder of Domino’s Pizza in the UK and former owner of Watford Football Club along with Sir Elton John."

offer

Got an email that A&K just sent me something by UPS. Bet it is some new offer for UE members finalky......

aisa said:

Got an email that A&K just sent me something by UPS. Bet it is some new offer for UE members finalky......

Click to expand...

It would be nice if it provided for continued travel. Hopefully, you're willing to share what the offer is when you get it.

The good and the bad

The downside of the club (coming from a trial member) is the amount of places here in the US and North America...ER and Quintess obviously have more. And the small amount actually gets smaller when you look at how difficult it is to get to a few of them from certain parts of the country (Read: Idaho). The Villas are limited in number and in available weeks.

The upside:
The cost for a 30 day plan (if lined up with the ER and Quintess plans) is a little over $150,000 less (not using any discounts) (I added the holiday packages in)

Give me 5 or 6 locations that are great and I don't see the family getting bored for many many years (I play the same golf course over and over again...). Today, AK has 10 solid locations (multiple houses in a few), at least.

The Villas really are pretty awesome.

I don't think anyone has mentioned the $350 per night fee for 21 day space available nights (instead of using your other nights). They are simply cheaper and thus better than anything out there.

I understand if I joined a club and was burned (maybe even more than once) how I would be quite hesitant to go back for more. It would really come down to the need (young kids or a large family to bring, a ton of flexibility and desire to travel) and the stomach for more risk. If I was seriously thinking about it though, I think AK is one of the better choices because of the equity model (and how conservative they are financially).

I remember having the discussion 10 years ago with my wife about the whole joining a country club decision and she was pointing out how the rounds of golf were cheaper at the nice local course than at the club (using our calculations for how many rounds we would play). Today, we couldn't go back. Sometimes the math is less important than the quality of life, and I can assure you that we wouldn’t have gone on as many trips over the last year if those days weren’t sitting there. And we certainly haven’t regretted a single trip, all were great!

Anyway, I am not sure if any of that is helpful, but I figured I would throw it up. The $350 per night benefit is really something…especially when you could give it to a sibling, child, or parent to use.

We too love the $350 Space Available days. We use our nights for the tough to get properties and use the $350 for the easier properties.

Spot on observations, Teddy AK. I genuinely feel like the AKRC is the total package, EXCEPT for the number of residence locations. Sure, it absolutely helps to have the A&K travel and villa credit programs and the RC exchange, but the number of residence locations is the one negative that I see.

The only other thing IMHO that could be a negative depending on your perspective is they're so darn conservative. When you're a DC member and you see all these other clubs doing mergers, making aggressive offers to land new members and other deals, you do sometimes think shouldn't my club be doing this. In the end and with the benefit of hindsight, those conservative financial decisions do look better and better.

The $350/night space available pricing is really good. I looked at January's availability the other day, and there were 12 or 13 destinations still with good availability (and almost all were ones that you'd want to go to (not Kiawah in January)).

surprisingly, AK is the only one to actually have a meaningful debt cap (5%)

(luxus/rocksure have 0 debt, but are barebones)

Kiawah voted top residence by A&K RC members:

http://www.fractionallife.com/news_...ination_for_abercrombie__kent_members1354.asp

Also -
"Abercrombie & Kent (A&K) was voted "World's Best Luxury Tour Operator" and "Best Africa Tour Operator" for the seventh consecutive year by travel professionals at the Travel Weekly Readers Choice Awards last night in in New York. This comes just weeks after the company was named "Best Luxury Tour Operator" by readers of Luxury Travel Advisor and "Best Africa/Middle East Tour Operator" by TravelAge West and Recommend."

Current Fee V's Property Value

Hi, new member to TUG, but spent a lot of time following DC4MS - glad to see many familiar names here.
Anyway, have been watching from the sidelines for a long time now and feel that the time is drawing close to making a value based decision on an equity club.
I've been out of the loop for a little while, and it's quite possible that I've missed out on something, but in my most recent review of the A&K club it appears that the initiation fees have dropped from where they used to be - is this correct? If so, does anyone out there know what this means for the price of the homes that are now being purchased? I was of the impression that there were 6 members per home and that the homes were being bought for $3.0m. Obviously this math doesn't work at the new fee levels. I assume they're simply buying cheaper homes, but any feed back on this (plus any idea of how the membership has grown, or shrunk, over the past 12 months) would be appreciated.

http://www.akresidenceclub.com/pricing-chart.aspx

2010 sales - AKRC had a good H1 for industry, with presumably better H2.

They haven't bought any new homes in a while, so it's hard to tell. The 3MM number was before the housing depression. I'm really not sure what they would target now. My guess is the 3MM number is correct but then downsized for the current real estate market. 2.5MM or so?

Regarding the decrease in prices, AK gets 27.5% of every membership they sell. It's one of the ways they make money. They lowered the price by eliminating all or most of their commission, so the same money would go into 'the home' as before. (just AK's commission is less)

The member per home ratio hasn't changed.

http://tugbbs.com/forums/showthread.php?t=130505
12.5% for membership sales and marketing expenses
5% for general and administrative expenses
10% return or profit to A&K manager

Is the membership ratio 6:1? I thought it was, however if this ratio is based on the top tier membership of 60 days, this would equate to 360 member use days per year (can't be right). Conversely, if the ratio is based on the 30 nights per year tier, this would only generate $1.8 m (6 x $300k) in revenue to be applied towards the purchase of a new home plus any A&K expenses, well below the original $3.0m level. I assume it must be the 45 day tier - therefore generating $2.25m in initition fee revenue (6 x $375k) and 270 use days per year. If A&K is taking 10% or more out of this number (for marketing or other expenses) then I guess they would be looking at $2.0m houses or less going forward, this sounds like a reasonable price point for houses going forward, but this would generate 270 use days per year (and $250k in dues per house p.a) this seem seems like a lot of use.

TarheelTraveler said:

The maximum ratio of homes to members is 6.5 to 1.

Click to expand...

have they standardized dues? whats the current AK exchange?

The A&K deposit prices are down from the peak. Of course, that reflects the reality that the portfolio value is also down from the peak.

With respect to new homes (which additional deposits would go towards), I'm assuming with some certainty that they'd be buying houses for less than the $3M at this point in time. The A&K model is pretty cut and dried. There is no debt in the member's corporation, so what you bring in is what would be used to buy new homes. The net deposits are simply added to a separate account (which is precisely reflected in the audited financials) used only for that purpose. You can call the A&K RC CFO to get that number at any point in time.

Don't hold me to this, but for some reason a maximum of 270 days sold is sticking in my head. Assuming you sold only 15 day memberships, you'd have $3.15M before the reduced commission. Of course, if you sold only 45 day memberships, you'd only have $2.25M before the reduced commission. The sales reality for all clubs from what I understand is you typically have way more 15 day members than 45 day members, so the actual number is somewhere in between, perhaps skewing the net towards the higher number. My understanding is that A&K is taking less than 10% out to cover their expenses.

One thing that is different with A&K as opposed to most of the clubs is they have a 1 in: 1 out, which has kept the resignation list low during the recession but has also inhibited the purchase of new homes. Not sure what the long term policy will be.

As far as occupancy, the overall maximum occupancy number is a little better than most clubs. Some clubs had no caps and others were around 80%. One other difference is that A&K dues also include the A&K trips and European villas which lowers the actual occupancy by a decent chunk. I believe overall occupancy has been around 50% based on the last two annual member meetings (from a combination of extra houses, A&K trips and the villas).

TT is correct as usual on all accounts....

The usage is probably a little higher now with the Ritz Carlton members coming in, but we have a lot more choices.

Kagehitokiri2 said:

have they standardized dues? whats the current AK exchange?

Click to expand...

The dues are fairly close to being standardized at this point. There have been no dues increases for newer members, and legacy members have had the standard increase applied. Also, a decent chunk of legacy members upgraded for additional benefits like $350/night space available nights. On the A&K exchange for trips, it's either a $1,200 or $1,400 credit per night for any A&K travel, just can't remember which off the top of my head.

Agree with NGB on the Ritz-Carlton exchange. You see somewhat less availability on our side, but you also have their side to pull from.

Appreciate all the input and help with this. I guess the area that's still a little confusing and difficult to pin down relates to the member ratio of 6.5:1. If there are mostly 15 day members and not 45 day members the ratio might get up over 15:1. I understand that this doesn't affect the 270 day usage cap, but it would certainly make things a lot more competitive for peak periods - something that family travellers with kids, like me, need to think about when reviewing the respective clubs. Thanks again for the input.

Need2Know said:

Appreciate all the input and help with this. I guess the area that's still a little confusing and difficult to pin down relates to the member ratio of 6.5:1. If there are mostly 15 day members and not 45 day members the ratio might get up over 15:1. I understand that this doesn't affect the 270 day usage cap, but it would certainly make things a lot more competitive for peak periods - something that family travellers with kids, like me, need to think about when reviewing the respective clubs. Thanks again for the input.

Click to expand...

My two cents FWIW. I do think that the member makeup is going to be similar across the industry. However, there will be some variation on how that issue is handled by the various clubs. For example, I believe ER handles it by fastest finger two years in advance, and A&K does it through spring and fall drawings where your prioritize your selections. Obviously, each of those systems will appeal to and be better for some, but worse for others.

I can't speak to the ER system, but I would normally think that I'd do better in that fast finger approach. However, we've gotten our top choice every time through the priority drawing approach, so I've been happy with it. Overall, I think 90%+ for every drawing have gotten one of top two choices, so I don't think it's that surprising necessarily. By the time you do 17 houses X 12 or so holidays (Spring Break is 6 or so weeks maybe), you take out some dog holiday weeks at particular destinations, but you also take out some of the 150 members or so that could care less about holiday travel (or those who ignore a few reminders to log in and make selections), it works surprisingly well.

Since we've got kids in school, we do a lot of our travel in the summer and during holidays from the holiday drawings. We'll then add two or three long weekends also centered on Fridays or Mondays off of school.

Thanks TT. First hand experience is the best way to gauge how the system is working - sounds like it's working well for you. Appreciate the fedback

We too have had no problems with availability. We upgraded our membership not too long ago so that we now have holidays. (our kids just became school age). I will let you know how it goes later this year.. (since I haven't used a holiday yet. But, so far, so good. I also hear good things from other members.

I booked a spring break week this year in march at Tahoe. It wasn't even a holiday week! (as defined by AK) spring break started later in march and went through april.

So, I got a holiday week with not problem without even using the lottery system.

We have also gotten exactly what we have wanted...no problems. Not sure if that is because the membership is low, but it has been great. As for the ability to buy the 18th home, don't they still have to pay for all of the homes to be transferred? Not sure where that stands or how many more members they need to go get number 18...

Still the best deal out there.

so does kiawah pretty much book up for the summer ahead of time?

which properties have best $350 last minute avail?

by standardized i meant for new members, since they no longer publish dues.

Kagehitokiri2 said:

so does kiawah pretty much book up for the summer ahead of time?

which properties have best $350 last minute avail?

by standardized i meant for new members, since they no longer publish dues.

Click to expand...

Kiawah is one of the harder properties to get, particularly for the summertime. There is some short notice availability in the winter, spring and fall, but not summer.

As far as short notice availability, there are typically 5-10 properties available for short notice reservations at any one time, probably a few more if you have flexibility in day of week. Mountain properties typically have the best availability, as well as Cabo, Mayan Riviera, and Hawaii from what I can gather. New York and Kiawah in the summer have the least in my experience.

The dues for new members vary based on number of days, with a discount for additional days.

Here are properties available over the next three weeks with at least 3 day availablity

Cabo
Jackson Hole
Kiawah
La Quinta
Tahoe
NY
Turks and Caicos
Riviera Maya
Sun Valley