# Corporate DC membership



## caribbeansun (Jun 13, 2008)

I'd like to ask who would seriously be interested in participating in a corporate DC membership?

I haven't identified which DC but it would stand to reason that the cheaper ones might make sense ie. either HCC or UE Premiere.

*Positives: *
- lower capital cost per week
- potentially swap a DC week during a particular year for a week at another property that someone else owns (condotel, fractional or high end TS) for a nominal booking fee, something like $150.

*Negatives:*
- another layer of administrative burden which means higher annual dues
- potentially more difficult to redeem as you have to either find a replacement for yourself, have the group buy you out or wait until the group finds a new member
- it will be more difficult to manage advanced reservations and holiday reservations meaning you might have to be content to have an advanced reservation every other year and holidays may be once every 5 years

Maybe I'm off my rocker with this but it seems to have merit.

Thoughts?

*Serious* interest anyone?


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## Steamboat Bill (Jun 13, 2008)

Depending on the DC, I may be interested. 

I am already a HCC member, thus it would have to be UE, Quintess, ER, or LUSSO


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## Bourne (Jun 13, 2008)

I too may be interested and my short list is the same as Bill.


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## GregGH (Jun 13, 2008)

*add me*

Hello Carl

I am also interested. (also mentioned in PM )

Hey - Bill - what about equity clubs ? ( but I have not kept up to date with any clubs and details )

Further Bill  - you mentioned in a similar thread that these price out like a hi end TS - allowing for a couple of different clubs as an option for me (and maybe others) - whereas I just didn't see the full membership in any one club for my travel patterns.

I have sort of a comfort factor with the combined assestment of people like Borne & Steamboat Bill ( and maybe even Perry ? )

Regards

Greg H

p s- have not checked to see if this is also posted on DC4MS forum


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## caribbeansun (Jun 13, 2008)

The equity clubs are a bit tougher on the pocket book on a per night basis.

If the sole objective is to add nights at the lowest up front cost and the lowest per night cost then HCC and UE Premier are really the only viable options although HCC gives the opportunity to reduce your cost per night by buying more nights whereas UE is fixed and there aren't any economies of scale to be had.

After the first two the cost per night jumps up pretty good.

The pricing below takes into account all current promotions as communicated to me by a variety of clubs.  These are *simplistic* calculations that ignore refund %'ages and cost of capital.


--------------------------Capital Cost ---Annual Cost
Club   ------------- Nights    ---per night-----    per night
            HCC    ----------------35-------2,286      ----------329----80%  of entry 
UE - Premier    --------35-------3,286      ----------371-----80% of current 
UE - Signature    ------35------     6,143      ----------729-----80% of current
DHH --------------- 28 ------8,543 ----------711----- 80% of entry
Lusso    --------------56------     9,487      ----------625 ---- disqualified NO advanced reservations
UE - Elite    ---------- 35     -----10,000--------      1,000-----80% of current  
Quintess    -----------60------10,583      ---------838 
Equity Estates    -----30     ------10,833      ---------550 ----92.5% of current (2 year hold)
A&K    ---------------45------     11,000----------933 
Quintess    -----------30 ------11,217      ---------883 
A&K    ---------------30     ------13,000      ---------967 
ER - Ultra   --------- 60     ------13,250      ---------825


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## Steamboat Bill (Jun 13, 2008)

Beleive it or not...the ER Ultra is a fantastic plan (if you can afford it) and Solstics is an incredible bargain to stay in $6.5m homes


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## caribbeansun (Jun 14, 2008)

I'm curious about why Bill and Bourne chose the ones that they did - here's my take on them:

UE - feasible at the Premier level but annual costs escalate to >$700 with higher levels.  Big concern is their 3 in/1 out rule

Quintess - nightly costs are >$800 and low advanced reservation levels (2)

ER - Ultra -   I must be missing something where you say it's great value because I'm not seeing it as they have the highest per night capital cost.

LUSSO - no advanced reservations for corporate holders 

Why not Equity Estates?  Slightly lower capital costs, 92.5% out after 2 years, no data on advanced reservations rec'd yet, nightly cost of only $550 reflecting no debt.  Granted they have very limited inventory right now.

Or DHH - slightly lower cap cost and nightly around $700 but includes a car and $500 groceries per week.  Kinda different.


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## Steamboat Bill (Jun 15, 2008)

Perhaps I misread your post...I was viewing the annual cost per night as the "true cost"

I like EE and they seem very reputable, but only have a few homes.

DHH is really growing and their availability is incredible.

ER has the most homes and best reputation
UE has the most locations
Quintess has very high end homes
LUSSO aslo has high end homes


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## TarheelTraveler (Jun 15, 2008)

I would definitely place some emphasis on the issue of advanced reservations.  I've never had a problem getting exactly the reservations that I wanted with A&K, but I also have 3-5 advanced reservations on the books at any one time.  In my view, you want to make sure you're not getting the leftovers and have enough time to make the travel arrangements.  I don't think I realized how important it was until I started bumping up on my max #, when I started locking in some dates for the following year.  This is particularly important obviously if you have less flexibility and have to travel on holidays and school breaks.  I guess it would also be important to know what is considered an advanced reservation.   Finally, FWIW, I also think you can't ignore the cost of capital and refund percentages, as it dramatically effects the true cost per night.  I built some ridiculously complicated spreadsheets back in the day when I joined, and I was shocked how those variables can either bring the cost per night to zero or take the cost per night up to $2000/night when they are factored in.


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## caribbeansun (Jun 15, 2008)

How can it take the cost to zero?  Surely there aren't clubs that are growing at that rate with good refund rates - I'm not seeing any but I am seeing a number of clubs that assume annual increases that seem far too aggressive and factoring those into their calculations.

I also find some factoring in the theoretical difference between the market rent and the annual dues - I think that's faulty logic in that many people will opt for a cheaper alternative if faced with huge nightly rates.  To so it doesn't matter, for cheap SOB's like me I'm always looking for a bargain.


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## TarheelTraveler (Jun 15, 2008)

IIRC, when I did the spreadsheets originally, if you had appreciation of 8-10%, received 70 or 80% of the appreciation, and had a deductible capital cost of around 5% (e.g., home equity line), you could get to zero.  Appreciation of the deposit has historically been much higher than 8%-10%, but as the industry starts to mature, I have a hard time believing that it will continue at that pace, but who knows, it's still fairly early.  The clubs that don't offer any kind of appreciation or have lower refund rates, of course, discount the value of those benefits, while at the same time are counting on those factors to justify their subsidizing the portfolio and dues.  I think the key is to fully model it with conservative assumptions that you feel comfortable with.

Not to further complicate matters, but some of the smaller less established clubs and larger most aggressive clubs definitely have higher risk that ought to be considered as well.  Some are closer to or at cash flow positive, reducing the risk substantially, others like Portofino definitely aren't.  When you throw in all of the variations in the plans, it can be a pretty daunting decision making process, but one that is immensely rewarding when you actually bite the bullet.


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## caribbeansun (Jun 15, 2008)

*Quintess*

Quintess has so many options you have to do them separately as they price holidays differently than non-holiday plans (second last column is the advanced reservations, last column is "real" cost with 4% COC, 5 year life):

Q2----20----11750----938----1----1501
Q3----30----10550----883----1----1377
Q4----40----8750----800----2----1206
Q5----50----7400----770----2-----1112
Q6----60----9667----838----3----1274
Q7----75----9533----887----4----1314 (unlimited no cost space available days)

Holiday Plans

Q2----20----13250----938----1----1566
Q3----30----12050----883----1----1442
Q4----40----10250----800----2----1271
Q5----50----9000----770----2----1182
Q6----60----11000----838----3----1332
Q7----75----11667----887----4----1407(unlimited no cost space available days)

In the second through fourth year, deposit is 80 percent refundable. After fifth anniversary, deposit is up to 100 percent refundable.


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## caribbeansun (Jun 15, 2008)

---------------------------"Real" Cost
Club   ------------- Nights    ---per night

HCC    ----------------35--------432
UE - Premier    --------35--------645  
Equity Estates    -----30     -------1,019
Lusso --------------56 -------1,031 (note above re advanced res is in error) 
UE - Signature    ------35------- 1,226
DHH --------------- 28 -------1,424
UE - Elite    ---------- 35     -------1,833
A&K    ---------------45-------- 2,379
A&K    ---------------30     --------1,757
ER - Ultra   --------- 60     -------13,250*


* - valuation pending


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## caribbeansun (Jun 22, 2008)

I'm going to the UE presentation in Toronto in July and will report back on what they have to say.  If there is enough interest from here I will consider trying to do both an HCC and UE Premier membership.


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