# HCC math



## Texan in NYC (May 8, 2008)

I understand that people here like HCC, but the math sort of eludes me.  Let's say you get in at the June 2008 price increase levels:

Companion:  $30k + $3.3k/year = 7 nights
Associate:  $50k + $4.8k/year = 15 nights
Affiliate:  $60k + $7.2k/year = 25 nights
Private:  $80k + $9.6k/year = 35 nights

If you assume an after-tax opportunity cost of 2.5%, the annual cost works out to:

Companion:  $750 + $3.3k = $4050 = $578/night
Associate:  $1.25k + $4.8k = $6050 = $403/night
Affiliate:  $1.5k + $7.2k = $8700 = $348/night
Private:  $2k +$9.6k = $11600 = $331/night

At the Companion and Associate levels, I dont really see any benefit;  it should be pretty easy to source comparable properties at similar prices.  

At the Affiliate and Private levels, I suppose you might be getting a marginal discount from the $500-600/night that these properties would likely command, but then again, you're stuck to a vacation schedule that obligates you to use all nights you've paid for.

Now add in the fact that you take equity risk on your membership (i.e., using the "risk free rate" as your opportunity cost is technically incorrect).  Also, you're taking inflation risk on the yearly dues.  For example, the June 2008 increase will represent a significantly above-CPI increase at all membership levels:

Companion:  $200/$2100 = 9.5% increase
Associate:  $500/$4300 = 11.6% increase
Affiliate:  $600/$6600 = 9% increase
Private:  $600/$9000 = 6.6%

Net net:  the math doesnt make sense to me at all.


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## stevens397 (May 8, 2008)

There are many reasons to buy DCs or timeshares.  Economics is a big part of it, to be sure.  While I have no intention of purchasing at HCC in the immediate future, I think you would be hard pressed to visit many of those locations and be able to have a 2-4 bedroom condo or home for the prices listed.

Yes, there would be an incentive to maximize usage by using all of the days you paid for (I know it was an issue for you with your Phillips Club purchase).  But that brings me to the other point about purchasing.  I'm 60 years old and will probably retire in the next 8-10 years.  I'm not worried financially, but my income will certainly go down.  

At that time, there is a difference between asking my wife if she wants to take a vacation somewhere and asking WHEN she wants to take the next vacation!  The purchase is spent and committed, so at that point, if I bought in, it would be costing me $9,000 for five weeks of vacation or $1,400 per week and $200 per night.  For that level of comfort, it's a great deal.

Yes, you can play with numbers and use them any way you want, but for those who enjoy the timeshare or DC lifestyle, it can work very well - especially at the dollar levels available thru HCC.  How you can make it work with the more expensive DCs eludes me, but they are probably much wealthier and don't care as much about value - they care more about the level of experience they are getting.  To each his own!


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## Texan in NYC (May 8, 2008)

I see, the attraction is that, having paid for the club, the obligation to use it is actually a positive, since it forces you to calendar your vacations?  The mandatory all-you-can-eat pricing is a major turn-off to me, unless you can "sublet" your time to friends and family.

Maybe it is just the point in life that we're at (mid career);  since starting our professional careers, neither my wife nor I have ever managed to actually use all of our allotted vacation days for any year.  (My wife barely managed an 8 week maternity leave.)


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## Bourne (May 8, 2008)

A couple of points...



> At the Companion and Associate levels, I dont really see any benefit; it should be pretty easy to source comparable properties at similar prices.



Based on my experience and research, that statement is not true. There are some locations with rental pool where it is possible to quantatively compare the cost. i.e. La Costa, Villa Renaissance, Beaver Creek, Cabo, Nuevo Vallarta, Orlando, Playa Del Carmen etc. Take into account tax and resort fees too. Some comparisons may be anecdotal ( Maui Kula Greens, Outer Banks etc ) . 

Even at today's prices, the discount can range from 30 - 70% depending on the season and location. Even Quintess and ER make sense when you compare them. I am considering a Quintess level 20 membership in addition to HCC's membership. Primary reason is quality. 



> Maybe it is just the point in life that we're at (mid career); since starting our professional careers, neither my wife nor I have ever managed to actually use all of our allotted vacation days for any year. (My wife barely managed an 8 week maternity leave.)



Vacation time is key. Anything you buy has to be in line with the number of days you can use. Otherwise renting is the way to go.


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## Steamboat Bill (May 9, 2008)

Texan in NYC said:


> I understand that people here like HCC, but the math sort of eludes me.
> 
> For example, the June 2008 increase will represent a significantly above-CPI increase at all membership levels



Your concern is valid, but I have crunched the number every which way but loose and decided to join in Dec 2006 when the price was lower than currently offered.

There are probably a few homes that you can rent for the price per night you calculated, but not all. Almost every example I looked at joining HCC would save me a significant amount of money immediately, and the savings would probably get better as time goes on.

I really focused on places like Turks and Caicos, ski weeks, Hawaii, NYC, etc. and HCC was lower than renting for cash.

The June 2008 increase does NOT affect current members, only new members, thus if they raise prices 10x over CPI, it affects me not. All current HCC members are locked into their membership fee and annual dues (can icnrease CPI + 2-3% max).


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## BocaBum99 (May 9, 2008)

DC economics just don't work for me.  As an investment, it makes no sense at all.  The cash out requirements look a lot like a ponzi scheme.  There is a point at which members cannot get their money out under any circumstance.

The only way I buy into a DC is if I have a bunch of spare cash lying around idle that I am not actively investing and I want to blow it on a luxury purchase.  To me it would be like buying a boat.  No way to justify it economically, but I want it anyway.


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## LastTrueFamilyMan (May 9, 2008)

Texan in NYC said:


> Also, you're taking inflation risk on the yearly dues.  For example, the June 2008 increase will represent a significantly above-CPI increase at all membership levels:
> 
> Companion:  $200/$2100 = 9.5% increase
> Associate:  $500/$4300 = 11.6% increase
> ...


It's been said in this forum several times, but I'll say it again - unlike most golf country clubs where all members pay the same annual dues, HCC annual dues are determined based on when you joined + annual increases capped at CPI + 2% (or 3% for newer contracts).  So, each membership level has different "buckets" of annual dues that are progressively more for the newer members.  I've only recently joined HCC, but their CFO said the dues increases to existing members have averaged more like 3% total instead of the max allowed under the contract.

Accordingly, HCC provides a greater mitigation of inflation risk than renting as you go.  A large portion of the money that affords the nightly use is fixed and will never go up (the joining fee).  A lesser portion of the nightly use cost is subject to increases and is contractually capped (annual dues).   If you rent as you go, the entire nightly cost will be subject to inflation and it is not capped.  



> At the Affiliate and Private levels, I suppose you might be getting a marginal discount from the $500-600/night that these properties would likely command, but then again, you're stuck to a vacation schedule that obligates you to use all nights you've paid for.


I'm "stuck" using 7 of my nights March 2009 at Beaver Creek Village Hall which rents for approximately $1,500/night + tax at that time.

-LTFM


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## LastTrueFamilyMan (May 9, 2008)

Steamboat Bill said:


> The June 2008 increase does NOT affect current members, only new members, thus if they raise prices 10x over CPI, it affects me not. All current HCC members are locked into their membership fee and annual dues (can icnrease CPI + 2-3% max).


Steamboat, you beat me to this  - I took too long to type my post.  I wasn't intentionally redundant.

-LTFM


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## LastTrueFamilyMan (May 9, 2008)

BocaBum99 said:


> DC economics just don't work for me. As an investment, it makes no sense at all. The cash out requirements look a lot like a ponzi scheme. There is a point at which members cannot get their money out under any circumstance.
> 
> The only way I buy into a DC is if I have a bunch of spare cash lying around idle that I am not actively investing and I want to blow it on a luxury purchase.  To me it would be like buying a boat.  No way to justify it economically, but I want it anyway.



First, sorry for the 3 posts in a row - I'm not keeping up fast enough.  What's everybody doing up at 1:30/2:30 in the morning?

Boca, I can't disagree with you more.  I'm a CPA and an attorney, so, before joining, I crunched the heck out of the numbers, did title searches on properties, reviewd LLC operating agreements, and generally raked HCC over the coals.  I see nothing about the economics of HCC that even comes close to a "ponzi scheme."   

Look at my example of my first 7 nights of use - $1,500 + tax vs. my personal calculated cost per night of $398 (long story how I got there, but let's just say it is a very personalized formula to me).  I know BC Village Hall is on the extreme end of cost per night for HCC, but it is very easy to use the membership for those kind of properties.  I was looking earlier tonight at one of the lower end properties for HCC - Rosemary Beach - that happens to be within driving distance for me.  Similar units were going for $380 + 12% or so tax.  So, I'm still saving vs. my personal $398 per night calculation at one of their least expensive properties.     

Another great thing HCC does for us, is it gives us options for larger properties where we can invite another couple and their kids along.  It will be fun to have another couple along with us at BC next year.  They have a child my daughter's age, so they'll be in ski school together.  We're able to just invite them and not worry about splitting the cost of a condo.  In that sense, it really kind of is like owning a second home.  I'm not paying any more to have them along, so I can just invite them.  They are more likely to go b/c they aren't having to pay lodging.  I realize this is not strictly an economic benefit, but it is a real positive for me.  

-LTFM


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## vivalour (May 9, 2008)

LastTrueFamilyMan said:


> Another great thing HCC does for us, is it gives us options for larger properties where we can invite another couple and their kids along.  It will be fun to have another couple along with us at BC next year.  They have a child my daughter's age, so they'll be in ski school together.  We're able to just invite them and not worry about splitting the cost of a condo.  In that sense, it really kind of is like owning a second home.  I'm not paying any more to have them along, so I can just invite them.  They are more likely to go b/c they aren't having to pay lodging.  I realize this is not strictly an economic benefit, but it is a real positive for me.
> 
> -LTFM



Ditto for us. It boils down to a lifestyle decision -- much more space, consistently high quality, on-site and in-unit amenities -- more than a strictly economic one. We also have limited vacation time, and will use HCC properties along with rentals/hotels when more sensible or convenient. It does force us to plan ahead, however, and thus we take nicer vacations -- more often -- than otherwise.


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## capjak (May 9, 2008)

Steamboat Bill said:


> The June 2008 increase does NOT affect current members, only new members, thus if they raise prices 10x over CPI, it affects me not. All current HCC members are locked into their membership fee and annual dues (can icnrease CPI + 2-3% max).



I think it does impact you if someone decides not to join due to price increase/dues.   

I think there is a benefit in increasing membership and thus new places to visit.

HCC has added a lot of homes in a short period, I just wander if this will continue with the price increases...eventually other DCs/TSs etc.. become more attractive.

 They may decide to buy a different club or condo or timeshare.


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## vineyarder (May 9, 2008)

BocaBum99 said:


> The only way I buy into a DC is if I have a bunch of spare cash lying around idle that I am not actively investing and I want to blow it on a luxury purchase.



I basically agree - a DC membership is NOT an investment (with the possible exception of true equity clubs), but rather a luxury lifestyle purchase similar to a boat or a country club membership.  The decision is really whether the money you spend is worth the enjoyment you receive.


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## Texan in NYC (May 9, 2008)

> The June 2008 increase does NOT affect current members, only new members, thus if they raise prices 10x over CPI, it affects me not. All current HCC members are locked into their membership fee and annual dues (can icnrease CPI + 2-3% max).



I wasn't aware that price increases were not applied to all members;  this gives you some inflation protection (i.e., you wouldn't get jammed by the June 2008 increase).

On the other hand, even CPI + 3% is a material spread to inflation.  Assuming you expect to hold the DC membership long-term (e.g., 10 years), at a 3% spread to CPI, the annual fees will have increased 34% (in real terms) by the end of 10 years.

Are DC memberships transferrable or inheritable?  Or is your only option to put the membership back to the sponsor at 80% of value?  (And is it 80% of what you paid, or 80% of then-comparable membership classes?)


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## Texan in NYC (May 9, 2008)

BocaBum99 said:


> DC economics just don't work for me.  As an investment, it makes no sense at all.  The cash out requirements look a lot like a ponzi scheme.  There is a point at which members cannot get their money out under any circumstance.



I would disagree with this characterization.  The cash-out rules of 2-in/1-out is just an understandable liquidity gate, where the company's underlying assets are basically illiquid.

The real issue is whether the ongoing membership fees (plus the investment income earned on any lazy cash from membership fees), is sufficient to service all of HCC's mortgage debt, operating costs, and capital maintenance.  If the cash flow is insufficient, then you run into problems of either banks seizing collateral on default (i.e., forclosure), or HCC cutting back on maintenance/service to preserve cash.

Another big question in my mind is the average utilization level of the portfolio.  I can tell you from personal knowledge that the Phillips Club has about an 87% utilization level over the course of the year.  At this level, the club is still a usable asset (somewhat surprisingly).

As a startup, I can't imagine HCC's current utilization is anywhere near this level, which is good from the point of view of availability.  Longer-term, in terms of risk factors, I'd be most concerned if HCC management decided to adopt a gym membership approach to management, where they oversold memberships to generate cash flow, at the expense of utilization.


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## Steamboat Bill (May 9, 2008)

These debates are always interesting, but here is another way of looking at it.

Timeshares are about having an alternative to staying at hotels. In other words, you prepay your future vacations and (if done properly) you can save a ton of money and have superior accomidations than a hotel can offer.

DCs are about having an alternative to buying a second home or renting from VRBO. I have visited a TON of hotels, timeshares, B&B, hotel-condos, condo rentals, campsites, DC homes, etc. and I have come t the "PERSONAL CONCLUSION" that DCs are the "BEST FOR ME"

That said, HCC is the lowest cost DC out there and represent an introduction to DCs. The other more expensive clubs like Quintess, ER, Solstice, etc. offer even larger and more expensive homes than HCC, but you have to pay a larger membership deposit and annual dues.

HCC and (PE Premier) offer the lowest initial costs and membership fees and thus are attractive to the TUG demographics and compete with the higher end timeshares in terms of price.

Of course, DCs do not offer deeded real estate, you can't resell them on the open amrket, and you can't rent them out. If this is your cup of tea, then I would suggest a PRC or Fractional property, but get prepared to spend $250k and have MORE resrtictions placed upon you than joining a DC.

DCs represent an improved lifestyle choice that really has to be experienced to fully understand why DC members are so passionalte. I (or should I say we) have seen the light and are only trying to share our experiences.

DC are clearly NOT an investment (at least the majority are not) and like BocaBum said, can be compared to buying something like a boat.


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## Bourne (May 9, 2008)

BocaBum99 said:


> DC economics just don't work for me.  As an investment, it makes no sense at all.  The cash out requirements look a lot like a ponzi scheme.  There is a point at which members cannot get their money out under any circumstance.
> 
> The only way I buy into a DC is if I have a bunch of spare cash lying around idle that I am not actively investing and I want to blow it on a luxury purchase.  To me it would be like buying a boat.  No way to justify it economically, but I want it anyway.



You made a couple of very interesting points...

The second one is true. Investing in a second home is different than buying a DC membership. The core group buying into DCs ( minus HCC and PE Premiere ) are potential vacation home(1-2 Mil+ range) buyers. By letting go of the appreciation of second home and some flexibility around dates, they get more homes to choose from and a higher level of service that can only be maintained at the primary residence. 

As for the first point, all I can say is *NO*  non-equity based DC owner looks at their membership as an investment. A lifestyle investment, but not a monetary one. It may look like a ponzi scheme to you but the 2-1 or 3-1 rule  is designed to avoid a _run on the bank_. No Destination club Association(DCA) affiliated DC has had a member with an issue related to this rule. 



> There is a point at which members cannot get their money out under any circumstance.



That statement is incorrect. Long story short, HCC has a clause to return 60% of the deposit incase the club closes down for multiple reasons. Some may balk at the figure, but IMHO, all rules and regulations are cleary defined and explained before signing up. You don't find it on page 24 column 345 on a contract as a suprise.


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## LastTrueFamilyMan (May 9, 2008)

Bourne said:


> As for the first point, all I can say is *NO*  non-equity based DC owner looks at their membership as an investment. A lifestyle investment, but not a monetary one. It may look like a ponzi scheme to you but the 2-1 or 3-1 rule  is designed to avoid a _run on the bank_. No Destination club Association(DCA) affiliated DC has had a member with an issue related to this rule.


If Boca thinks it is a ponzi scheme based on this rule, then most non-equity golf and country clubs around the country are as well.  I was looking at the membership documents of my country club, and it pays back 75% of the initial deposit as follows:

1) No refunds until the club reaches 300 members;
2) 4 in to 1 out upon reaching 300 members;
3) 2 in to 1 out upon reaching 500 members; and
4) 1 for 1 only if the club is at full capacity of 560 members.

The club is one of the nicest around so they can be restrictive on this point and still get members.  It is only a 4 year old club, so 300 members was only recently reached.

-LTFM


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## BocaBum99 (May 9, 2008)

LastTrueFamilyMan said:


> First, sorry for the 3 posts in a row - I'm not keeping up fast enough.  What's everybody doing up at 1:30/2:30 in the morning?
> 
> Boca, I can't disagree with you more.  I'm a CPA and an attorney, so, before joining, I crunched the heck out of the numbers, did title searches on properties, reviewd LLC operating agreements, and generally raked HCC over the coals.  I see nothing about the economics of HCC that even comes close to a "ponzi scheme."
> 
> ...



Okay, you must not be a banker.  Try going to the bank and getting a loan on your membership deposit.   If your asset is so safe, let's see you get a loan on it.

If there is a problem in the economy where new members stop joining, you can't get your money out.  Look up the definition of Ponzi scheme and it will eerily look like a DC with such a rule.

If there is ever a situation where 2 won't come in, then you can't get out.  Other than a ponzi scheme, what other product has such an attribute?  Please enlighten me.

I like the idea of a DC.  I don't like the ownership structure.


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## BocaBum99 (May 9, 2008)

Bourne said:


> You made a couple of very interesting points...
> 
> The second one is true. Investing in a second home is different than buying a DC membership. The core group buying into DCs ( minus HCC and PE Premiere ) are potential vacation home(1-2 Mil+ range) buyers. By letting go of the appreciation of second home and some flexibility around dates, they get more homes to choose from and a higher level of service that can only be maintained at the primary residence.
> 
> ...



All ponzi schemes have rules for getting some or all of your money out.  That doesn't mean you will ever get it out.

It looks like a ponzi scheme.  Just admit it that there is some risk that it could be.


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## BocaBum99 (May 9, 2008)

LastTrueFamilyMan said:


> If Boca thinks it is a ponzi scheme based on this rule, then most non-equity golf and country clubs around the country are as well.  I was looking at the membership documents of my country club, and it pays back 75% of the initial deposit as follows:
> 
> 1) No refunds until the club reaches 300 members;
> 2) 4 in to 1 out upon reaching 300 members;
> ...



Exactly why I don't belong to a Country Club.

I considered joining an equity based country club once when I first moved to Boca Raton.  But, the requirement for purchasing food killed the deal.


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## BocaBum99 (May 9, 2008)

Texan in NYC said:


> I would disagree with this characterization.  The cash-out rules of 2-in/1-out is just an understandable liquidity gate, where the company's underlying assets are basically illiquid.



I think a much better liquidity gate would be a mandatory credit facility backing up the member deposits.  A bit like what is required for chips in a casino.  The casino needs to have enough cash available to handle all of the chips if they were all cashed in simultaneously.

They could easily get equity lines of credit on every property they own to achieve that objective.

I don't mind rules that state 80% of current selling price is the refund.  I am completely against the rule that requires no return of member deposit unless 2 or more come in to replace them.  That is the Ponzi rule.

I'll take away my Ponzi label if they take away the rule that defines it as such.


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## Steamboat Bill (May 9, 2008)

BocaBum99 said:


> I like the idea of a DC.  I don't like the ownership structure.



I personally just feel my membership in a DC is worth MORE to me (not simply using monetary metrics) than any ownership in a timeshare or fractional. You should really look into PRCs or fractionals, but the member satisfaction rate has been very LOW so far as compared to the incredibly HIGH member satisfaction rates of DC members.



BocaBum99 said:


> Exactly why I don't belong to a Country Club.



DCs closely mirror the country club model, thus you will prbably be disapointed with the standard DCs. I urge you to check out Equity Estates as they have a very interesting business model (like a closed end mutual fund) but they only have 5 properties and 40 members.




BocaBum99 said:


> I'll take away my Ponzi label if they take away the rule that defines it as such.



I personally think your Ponzi label of DC is a little to extreme as a true Ponzi scheme (according to wikipedia) is based upon the following:

A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business.

Thus:
1. DCs are NOT fraudulent 
2. DCs are NOT investments
3. DCs do NOT pay abnormally high returns to members
4. DCs do generate net revenues
5. DCs are real businesses
6. DCs do invest member money into buying real estate

MOST golf and spa resorts (and the Boca Raton Resort and Club) has some type of ratio of new member to refund member clause (and no ability to resell). There are TONS of Boca Raton residents that joined the BRR&C and never thought it was a Ponzi scheme.

I have even debated with BRR&C members that I could get the same benefits for less just by reserving a room (with a AAA discount) on a Saturday night 20 times per year, enjoy the club facilities the entire weekend,  and still pay less that they pay. They, of course, think I am crazy and I just don't get it.


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## Bourne (May 9, 2008)

BocaBum99 said:


> All ponzi schemes have rules for getting some or all of your money out.  That doesn't mean you will ever get it out.
> 
> It looks like a ponzi scheme.  Just admit it that there is some risk that it could be.



As Bill posted earlier, a DC cannot be defined as a Ponzi scheme. That said, I can understand what you are implying. There is a level of risk involved and a member may lose a portion of the initial depost. That is true. 

Regarding that, all I can say is that everyone has a separate tolerance level to risk and the amount they can take a risk with. One should never step out of that range without knowing what they are getting into. Otherwise, it is technically called gambling.



> I think a much better liquidity gate would be a mandatory credit facility backing up the member deposits. A bit like what is required for chips in a casino. The casino needs to have enough cash available to handle all of the chips if they were all cashed in  simultaneously.



This does exist as a requirement for DCA affiliated clubs. If all members cash in their "chips", a DC should have enough "assets" to back it. Most DCs define the "chips" as 80% of member deposits and assets as liquid cash, home equity etc. 

Here i an example related to HCC...http://www.highcountryclub.com/pdf/HCC_AUP_07.pdf



> I don't mind rules that state 80% of current selling price is the refund.



Again, to each his own. I respect your opinion regarding the subject but I am personally apposed to it. Here is the reason why...

It is great for the member as it provides Return on "Investment". I personally do not consider the membership deposit as investment. All non-equity based clubs cannot charge the actual cost upfront during the startup phase because it is not economically viable for a potential member based on the risk level. As the price and dues increase to realistic levels, so would the value of the "chips". It would be a lot harder cover for those chips i.e. too much liability on the books.

I would never join a non-equity based club that provides this benefit. There are less riskier ways to invest your money if you consider it an "investment". If it is really that important, join an equity based DC. They are a much safer option.


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## NeilGoBlue (May 9, 2008)

This is not only a numbers game.

Destination Clubs to me are about incredible service.. Hassle free vacations and awesome homes in the best locations.  The posters who ONLY crunch the numbers are missing one of the main benefits of DCs.. Service.  That's why I joined.  That's why I like it.  That is why I reccomend it.  

You really have to experience it..


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## LastTrueFamilyMan (May 10, 2008)

BocaBum99 said:


> Okay, you must not be a banker.  Try going to the bank and getting a loan on your membership deposit.   If your asset is so safe, let's see you get a loan on it.


Nope, not a banker.  And I don't count my HCC membership as an asset.  Like a lot of other non-asset purchase decisions, the fact that I can't get a bank to take a security interest in the non-asset has no bearing whatsoever on my purchase decision.  For example, I spent approximately $6,000 skiing Snowmass/Aspen this past spring break (prior to my HCC membership).  I couldn't get a bank to make a secured loan for the costs of my trip.  Does that mean I made a bad decision to spend the money?  According to your logic, it does.  And from a net worth perspective, you're right.  But, life is too short to only worry about net worth - after all, you can't take it with you.  Do you make all your purchase decisions in life based on banking rubrics?  

Again, as has been said here, I look at my HCC membership as a lifestyle purchase.  I also see it a little as a vacation savings account.  Pay the upfront costs in, pay a  level, yet moderately increasing monthly amount - boom, forced "savings" for vacation lodging costs.  Additionally, I look at it as a discount opportunity off the rates paid through vrbo and certainly directly through the resorts.  I also factored in an upside potential in my decision to join.  Get in on something now that is just off the ground floor, then look up 5 years from now and see membership costs at 2x or more what I paid with 3x the properties available.  There is an element of appreciation to be considered in joining HCC now.  Not the appreciation of an investment, but the appreciation of the lifestyle value.  I realize it could go the other way, and HCC shuts down in 5 years.  That is a risk I'm willing to take.  In life, there are pessimists and optimists -- you're either one or the other.  Yes, I may be one of the only optimist CPA's you'll ever run across - must be the attorney in me that tips the scales that way.



BocaBum99 said:


> If there is a problem in the economy where new members stop joining, you can't get your money out.  Look up the definition of Ponzi scheme and it will eerily look like a DC with such a rule.
> 
> If there is ever a situation where 2 won't come in, then you can't get out.  Other than a ponzi scheme, what other product has such an attribute?  Please enlighten me.


First, your logic is flawed. In the ponzi scheme, the point at which you want to get your money out is the point at which you stop being paid the returns.  So, the underlying value is gone, and your contribution in is lost.  If HCC is still operating but not selling any new memberships, you may not be able to get your money out, but there is still underlying value being offered - the nights of use at the properties.   Let there be light?

This scenario (club still operating, but not enough new members are coming in to allow refunds) is not really a risk that I am worried about.  If the club is still operating, I don't want to get my money back.  I've got a 4 year old and another baby due this summer - I'm going to be taking family trips for a long time to come.  I made my decision to join HCC with a long-view of the future.  

The following scenario is the one that concerned me:  the club shuts its doors in 5 years.  I spent considerable time getting comfortable with what will likely happen in this scenario.  This is where the net asset test comes in.  Even if no new members joined the club for the last year of operation, the underlying real estate assets will pay the refund obligation. 

Despite all of the analysis and diligence I did, I think the bottom line is if the membership deposit is going to break you and keep you from ever again going on vacation if HCC shuts down, then it's clearly not for you.  While it would sting me pretty bad if I lost it all, it's a risk I'm willing to take.  The potential return I stand to get for that risk is nicer and larger properties than I would normally vacation in and, potentially, exponentially more properties from which to choose than are offered today. 

-LTFM


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## pwrshift (May 10, 2008)

The problem many Tuggers have is their current ownership of timeshares. I own 6 Marriott platinum weeks, but if I split the lockoffs could take 10 weeks a year - 70 nights at any prime time of year including what DC's call "Holiday" weeks - such as Presidents Week, several Spring Break weeks, July 4, Christmas, New Year's, etc. Few DC's will let you book your holiday week two years in a row. Sure, a week in a lockoff studio is not like a 4 bdrm house somewhere in the sticks but they are very nice 'large hotel rooms' on their own. And, as an empty nester what would I do with 3 unused bedrooms?

So with my potential of 10 TS holiday weeks a year, and the potential of exchanging into 2000+ Interval TS weeks outside of Marriott I can extend my use of them for 2 years.  Or I can exchanging for Marriott Reward Points and/or easily rent unused weeks on Ebay.  Whenever you have to book holidays a year ahead, you have to have options in case of necessary changes.  There are a lot of options available to TS owners that DC members don't have. More important ... if I have 70 nights a year with my present $4535 annual maint/tax bill it works out to an average of $65 a night...try to find that deal with a DC. 

DC members have to use-them or lose-them.  So if you have 70 nights a year with your TS -- how can you squeeze in another 15 or 25 nights a year with a DC? Something has to give.

To join a DC means you have to face restrictions on where you can go and how soon -- DC members can't book all their weeks 13 or 12 months ahead -- this means it's very difficult to get FF business flights on points anytime after 330 days ahead.  If you have to book some of your DC time within 120 days, what chance would you have getting FF flights -- none. Yet the popular DC weeks go fast - 12 months out to those who paid more the get a higher tier or number of 'annual booking weeks'...similar to TS floating weeks except there just aren't as many chances as most DC's have just one or two suites at a given location and they're snapped up before 12.01 a.m. and gone, just like La Costa.

Few of the DC's are in 'resort' type locations many TS people have become used to with Marriott, Westin, Four Seasons, Hilton, etc. -- where your suite is tied in with a major hotel where fine dining is an elevator ride away or you just call for room service. Like TS, twice daily maid service is an extra with a DC -- so you pay more money in dues and still have to make your own beds!  An example is perhaps the HCC Stowe townhouse - so far from skiing you'd have to snowshoe or cross-country ski several miles just to get on the slopes. Many DC's Beach locations are residential -- inland with major walks or shuttles to dig your feet in the sand...one in Maui is a 40 minute drive to sink your feet in the sand.

Size does make a difference - and if you have 10 kids or a bunch of friends anxious to sponge on your annual DC dues you may enjoy a 5 bedrooms location in Outer Banks - but it varies with need. _But you won't get that family in many NYC DC condos with 700 sq ft and a queen bed no in-house restaurants, valet parking, maid service or room service. _Surprisingly, many DC locations are about the same size as a normal Marriott TS - 1300 sq ft.

The risk of your capital has been argued above ... but it is a factor that with any increase in fees or dues you just never know how much of that goes right into the pockets of those who own the DC company ... and that isn't the membership. There is a margin of transparency safety with a public company that a privately owned DC will never provide...while they use your money to build their stable of real estate.

DC members seem to dump on TS ownership -- but most DC's are about 3 years old. What will their suites look like in another 10 years?  Brand new TS have a wow factor too and DC's are just too new to really know what they'll be like in a dozen years.

I think there is a place for both, but if you own TS's now it will be a major adjustment to join a DC ... and not always a positive step. Time will tell.


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## travelguy (May 11, 2008)

*Lauderdale ?????*



pwrshift said:


> DC members seem to dump on TS ownership -- but most DC's are about 3 years old. What will their suites look like in another 10 years?



Even after 20 years, the High Country Club homes will certainly look better than a flea infested, Hooters associated, shag carpet decorated, "Starving Artist" infomercial artwork accessorized, Hotel 6 furniture furnished, noisy resort situated, crowded pool chair limited, timeshare salesperson lurking, Fabreeze smelling, parking lot challenged, limited concierge serviced, hotel room converted, Titanium Marriott timeshare in Lauderdale!!!!   (Lauderdale ... RU Kiddn Me!!!)   

Sorry, this is too easy


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## pwrshift (May 11, 2008)

Here is a typical indicator of the personal attacks you get from some DC members when you *dare* to point out both sides of the street -- an amateurish attempt at insulting humour that just turns people off the whole DC concept. 

Hopefully this is a forum for objectivity so Tuggers can see opinions on the advantages and disadvantages of various vacation options, but when it comes to DC's you will get flamed by the likes of _TravelGuy_ if you stray off the DC cheerleading squad. 

The fact remains, nobody knows what any DC will look like in 20 years - or whether the companies that own the homes will even exist then.



travelguy said:


> Even after 20 years, the High Country Club homes will certainly look better than a flea infested, Hooters associated, shag carpet decorated, "Starving Artist" infomercial artwork accessorized, Hotel 6 furniture furnished, noisy resort situated, crowded pool chair limited, timeshare salesperson lurking, Fabreeze smelling, parking lot challenged, limited concierge serviced, hotel room converted, Titanium Marriott timeshare in Lauderdale!!!! (Lauderdale ... RU Kiddn Me!!!)
> 
> Sorry, this is too easy


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## vivalour (May 11, 2008)

Sorry pwrshift, but this is getting TOO BORING -- not a personal attack, but maybe you could come up with some more new and creative barbs for us DCers??? You can do it! Here comes the sun so bye for now


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## travelguy (May 11, 2008)

pwrshift said:


> Here is a typical indicator of the personal attacks you get from some DC members when you *dare* to point out both sides of the street -- an amateurish attempt at insulting humour that just turns people off the whole DC concept.
> 
> Hopefully this is a forum for objectivity so Tuggers can see opinions on the advantages and disadvantages of various vacation options, but when it comes to DC's you will get flamed by the likes of _TravelGuy_ if you stray off the DC cheerleading squad.
> 
> The fact remains, nobody knows what any DC will look like in 20 years - or whether the companies that own the homes will even exist then.



Shift,

I'll keep any humor out of this response so you can attempt to understand my position.

A) It's not about you.  It's not personal.  You're not that important to the discussion. (Neither am I).

B) It's all in fun!!  Notice I didn't get involved with the math or the redundant discussions on the DC biz model (which contains much misinformation by the DC detractors by the way).  Lighten up!  Feel free to post back at us DC cheerleaders with your own amateurish humor.

C) It IS personal to me when you accuse me of "flaming" and "insulting" you or anyone else.  I was talking about a MARRIOTT timeshare vs. a DC PROPERTY.  You brought up the comparison.  How is that flaming anyone??

D) I'm qualified to compare a Marriott and a DC property.  Why you ask?  BECAUSE I'M SITTING IN A MARRIOTT TIMESHARE IN HILTON HEAD AS I WRITE THIS!  I currently own 7 timeshare weeks and have been involved with fractional ownership for over 28 years.  I have been a High Country Club Private member for two years with visits to 14 properties.  I've done extensive due diligence prior to becoming a High Country Club member and with other prospective HCC members since.

E) You certainly have the right to take shots at DCs on this forum but what makes you qualified to objectively discuss "both sides of the street" and objectively compare timeshares and DC properties?  Have you ever even experienced a Destination Club property vacation?

Finally, I don't believe I was insulting to you and that certainly wasn't my intent.  However, if you feel I've offended you and your timeshare, then I apologize.


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## Steamboat Bill (May 11, 2008)

pwrshift said:


> I think there is a place for both, but if you own TS's now it will be a major adjustment to join a DC ... and not always a positive step. Time will tell.



I went to dinner last night with my wife and another couple.

On the way out, they picked up up in their  Bentley Continental GTC (this was the first time I have actually been in the convertible version ) and we went to one of the finest seafood restaurants in town.

We ordered a bottle of fine wine, Alaskan king crab legs appetizers, and I ordered the Chilean Sea Bass, and we all shared an incredible chocolate desert.

Sure we could have all gone out in a 5 year old Ford Taurus (that costs 1/40 the price of the new Bentley) and we could have had a fish sandwich at McDonald's and we would still have enjoyed each others company.

I guess that same argument can be said for joining a DC over buying a TS.

All too ofter on TUG, we get into the same old debate and there is no clear winner (not that it mattes) as everybody has different needs and wants.

In YOUR situation, I think you made the BEST decision for YOU as I think you have maximized your benefit vs cost....I actually like the Marriott MMC and BeachPlace.

However in MY situation, I believe that joining HCC (or any other DC) is the BEST for me and my family. We are now starting to travel with friends and relatives and the larger DC homes are wonderful that would be hard to duplicate with a TS.

Also, TUGers keep comparing TS to HCC and there are many other DCs out there. If HCC does not match your needs, perhaps ER, UR, PE, A&K, Quintess, Equity Estates, etc. will.

I know for sure, that DCs are FAR superior to any TS for "MY OWN NEEDS"


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## Steamboat Bill (May 11, 2008)

travelguy said:


> I'm qualified to compare a Marriott and a DC property.  Why you ask?  BECAUSE I'M SITTING IN A MARRIOTT TIMESHARE IN HILTON HEAD AS I WRITE THIS!  I currently own 7 timeshare weeks and have been involved with fractional ownership for over 28 years.  I have been a High Country Club Private member for two years with visits to 14 properties.  I've done extensive due diligence prior to becoming a High Country Club member and with other prospective HCC members since.



Wow...talk about DECEPTION...I actually thought you were enjoying Hilton Head from the HCC property.

Admit it...you are BUSTED.

There are many nice Marriotts there, I just thought SurfSide (the new one) was a little too sterile.


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## Bourne (May 11, 2008)

pwrshift said:


> DC members seem to dump on TS ownership -- but most DC's are about 3 years old. What will their suites look like in another 10 years?  Brand new TS have a wow factor too and DC's are just too new to really know what they'll be like in a dozen years.
> 
> I think there is a place for both, but if you own TS's now it will be a major adjustment to join a DC ... and not always a positive step. Time will tell.


*DC is not HCC.* There is a whole other world out there. Do not have such a myopic vision. If you think HCC members  look down upon TS, here are a few points to consider...

1. 90%+ of all HCC owners on this forum still own and use Timeshare weeks. IMHO, I am probably the only one who dumped all of them(14K Hilton, FS Aviara Plat) in a hurry because HCC was a better fit for me. Yes, I could have saved $2000-4,000 by waiting for a while and sell at the right time, but I do not care. 
2. The media *looks down upon HCC. * Given the coverage other DCs have, HCC is largely ignored. Why. Because it is too cheap. Not good enough to be considered equivalent of the 3M++ crowd. Check out Forbes, Halogen Guides etc and you will know what I am saying. 


The oldest DC out there is 5 years+ old. You are right. There is a place for both. The 5* hotels co-exist with motels. The hotel timeshares exist with other run of the mill kinds. So will the DCs with high end fractionals...

===============================================================================================

There are many posters out here who do not have a favorable opinion of DCs in terms of risk, cost and actual viability. There are even some on this thread. A conversation with them is always cordial. 

However that does not seem to be the case with you. 

For you personally, a Marriott timeshare *studio week on the beach* works great. I am happy for you. 

For me, a *5Br home away from the beach* works great because I need an extra bedroom for my second infant also. And for the friends vacationing with us and their toddler. 

Be happy for me. If you cannot, do not diss my choice just because my needs are different from yours. That is all I am asking.


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## Steamboat Bill (May 11, 2008)

Bourne said:


> 2. The media *looks down upon HCC. * Given the covergae other DCs have, HCC is largely ignored. Why. Because it is too cheap. Not good enough to be considered equivalent of the 3M++ crowd. Check out Forbes, Halogen Guides etc and you will know what I am saying.



That does make me a little annoyed, considering HCC is the 4th largest DC out there.

I guess "you know what" rolls downhill.

ok, so I will have to "slum" it in $1m homes instead of $4m homes....poor me.


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## travelguy (May 12, 2008)

Steamboat Bill said:


> Wow...talk about DECEPTION...I actually thought you were enjoying Hilton Head from the HCC property.
> 
> Admit it...you are BUSTED.
> 
> There are many nice Marriotts there, I just thought SurfSide (the new one) was a little too sterile.



Hey now ... I never said that I was at the High Country Club Hilton Head property.  Just on Hilton Head.  Until I can get a DC to accept all my remaining timeshare weeks in trade-in for the much-anticipated SECOND DC MEMBERSHIP, I'm forced to spend nine weeks per year at semi-inferior properties.

On Saturday, I drove past the High Country Club golf course house in Sea Pines on my way to the ocean-front Marriott.  As I sit on the Marriott balcony watching the ocean this morning, I'd trade it for the HCC house in a second.  More room, less people, private pool, quiet tranquility, screened in porch, upgraded audio/video, full size kitchen, double garage, etc., etc.

Anyway, I'll "slum-it" at the Marriotts and Hiltons for four weeks until my next High Country Club vacation at the HCC 5,000 sq.ft. OBX house in July.  Life could be far worse.


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