People bought into clubs since 1998 during the proof of concept days, and many didn't pay rack rate, got all sorts of concessions and gimmes. Most of those folks were TH early members, even before joining with AK, and are now UE members. The product had appeal and was sexy - the same reason certain car or unique product makes made it big when they came out. The same reason AOL made money. But reality did sit in - the "model" of getting all your money back, or even appreciation on it, wasn't sustainable. Especially when members wanted everything under the sun, and threatened redemption if they couldn't have it. Fast forward to other companies - like ER who copied McGrath - but with a 20% hold back. You're less likely to redeem if you have to give something up. Now that # is 75%. As a PE Member, you may or may not have had the 100% buy back since they started that way too. Keith was the COO for Tanner, don't forget that.
JT inherited a time bomb. He likely wishes today that he didn't give so many concessions when he brought the TH members over. Dues should be higher. Services should be more standardized, and cheaper. He's made some headway in this area, but is still carrying a TON of debt. If Cap Source works with him, they should - but how long can they allow deferrals? Everyone talks it up as a member, but in the end how many actually bought shares in the offering.
I did talk to my planner and Steve in Orlando yesterday about the "offering." Being told merely that if you're out of days, you can pay dues again and start over. That's always been there. It's not on the memweb, nor is it going to raise $15MM.
There is no doubt that the only thing to do if you want to keep traveling this way is to pay dues, book days and use them. So long as you think the dues will support the infrastructure. But to say "why are people still joining destination clubs?" I think is an invalid question. Because so it would appear from ALL club proforma's, no one is buying today. Yes, maybe some "trial" deals, but certainly not writing the big checks and making capital contributions. And for anyone who says something like "AK sold some 60 or 70 equity memberships last year," you need to then be asking club mgmt at AKRC where your new inventory of houses is. This was always the problem in the past, everyone touted sales as phenomenal but when it came time to improve availability and introduce new assets, they fell short. Thus short term rentals popped into the equations and the costs couldn't be supported.
It was my understanding that the Kirschner guy with High Country was responsible for shutting down the other DC forum, but I don't know that for certain.
So, make fun, call it what it is, pronounce everything as being "dead" someday, but if you can't find 5-6 friends that you feel comfortable with pitching your club on, and they in turn don't join, and find 5-6 more, all writing capital contribution checks - thus growing your club, then your (all) clubs are dead. Does that mean a bullet in the head right now? No, it can be a slow, agonizing death. Can it be accelerated by a filing from JT, or a larger run on the bank at ER, or a favorable plaintiff victory against AK, absolutely. Could it be drawn out if a consolidator came in and bought everything up - sure. But no one can argue that the "model" itself is flawed, always has been (McGrath said that in numerous interviews online) and isn't cost effective if you don't have continually, transactional cash flow, which means new sales. And unless that demand is there, you see prices fall and offers and incentives continue. Like UE currently "no dues" for first year. Think about it. How? Dues are what pay op costs. Mem fees (deposits) are supposed to secure real estate. You need BOTH.
It's odd how those that are not members profess to be the authority on the concept. That's okay, but without skin in the game, you're not fully suited up.
And by the way, what assets and debts AK reported in 2005, or any subsequent year, is very relevant. How could it not be?
and MAGIC!