# DC price increases...and "special" discounts



## Elsway (Jun 19, 2007)

Rarely does a week go by without a DC announcing a price increase.
Exclusive Resorts is announcing a price increase effective August 1.  Memberships are increasing by as much as $34,000.

These increases have the dual effect of improving the clubs' financial condition and creating a sense of urgency for those who are considering membership but sitting on the fence (like me).

ER is somewhat unique among the clubs I have investigated in the sense that they are completely unwilling to negotiate any aspect of their price structure.  In the past month, I have had three of the major clubs offer me discounts and freebies that are not apart of their published prices.  These offers have ranged from free lifetime privileges for friends and family...an increase in the refundable portion of membership deposit...and an outright discount on deposit and annual dues.

I negotiated hard with ER, but they would not budge an inch.  To me, this is a reflection of their dominant position in the DC industry and it reinforces my confidence in their business model.  ER remains at the top of my list...


----------



## puffpuff (Jun 19, 2007)

ER is top dog. Deep pockets, excellent marketing and early entry sure helps. 
Operationally, their business model is not much different from others such as UR, Quintess, etc. AFter the past 5 years of existance, most clubs remaining today are working on essentially the similar type formula -

1. Sell out 320 days
2. Actual usage in 70-80% range
3. Encourage non holiday use
4. Have a reasonsable holiday booking schedule
5. Built in a 10% management fee on the annual dues end of things 


ER is much bigger and is facing issues that smaller clubs have yet to face. The bankruptcy of T and H make their financial strength so much more appealing. ER , with its own mini-developement in resorts, is in a sweet spot in terms of cash flow, as they are charing retail for membership while building at developers price. That will only get better and make them stronger. Certainly a positive. 

As far as financial sustainablity, ER will be around for sure. There will be some consolidation with the rest, but at the end of the day, there will be 2-3 volume players ( ER, UR , and quintess the way it looks now )  and multiple smaller boutique players over time ( Lusso, Cresendo etc. )

 I think you pay a premium to be with # 1,and for those who can afford it, great. Easier to sleep. 

Does it mean the industry will have ER and no one else. I dont think so. Based on my study, I find that most current clubs, including the more established one such as Quintess, UR,  PE etc will survive. Contgrary to some  tuggers here, I dont find the risk of BK as high as some may have factored in. I could be wrong . 

The smaller club may not  be able to scale up  , but they will make it on an ongoing basis, offering its member good vacation option for the money. They will offer things that ER cannot offer because of size and scale. So at the end of the day, it will be different strokes for different folks.  The current model for clubs taht are in existance can be self sustaining in my view. They simply dont have the wild promises of clubs from before that cannot be met. 

. ER does have a downside for those who wants a boutique privacy feel instead of a community feel but the industry is big enough for multiple players.  If ER raise price further, I will find Quintess  and UR Elite offer far greater value property for property. ER was great value when it first came on. They are top dog, and I do see them pulling away further - but you are payng for it. Most members of ER that I know are kind of stuck. They cannot leave becauset the fee keeps going up, but the ER reservation system is quite jammed.

You may want to talk to some ER members . Good luck with your selection. Let us know.


----------



## pwrshift (Jun 19, 2007)

I got a kit from ER last week and got the email today too...sure sounds like they learned how to sell from Marriott sales reps, eh?

I'm also afraid of Steve Case, having lost a lot of money in the AOL/Time Warner fiasco. I'll bet Ted Turner isn't a member!

And now Case is turning his attention to wellness?  Will that hurt ER?

Brian


----------



## GregGH (Jun 19, 2007)

*more deals*

Here is another special I received via e-mail today --- fyi --- ( i have not relationship with this or any DC - so far )

Regards

Greg H

from Private Escapes .....

Good evening Greg, 

I wanted to let you know about a very compelling membership incentive we are offering through July 4.

For the next two weeks, new members joining Private Escapes will receive a 100% refundable initial deposit, instead of an 80% refundable deposit.

We are offering this strong benefit because we have a series of new real estate acquisitions closing over the next 3 weeks. Rather than stagger these closings, we would prefer to close on all the residences at once, as these residences will make great summer options for you and other members.

Not only will you receive a 100% refundable deposit and benefit from today's lower prices (our next pricing increase takes effect in 45-60 days), but as our thanks for helping close on these residences, we will also extend to you the first 6 months of your membership with waived annual dues.

Certainly, the timing of your interest is very personal, and we welcome your evaluation whenever best suits you. However, I wanted to be sure I was not remiss in my assistance to you, as it is an extremely opportune time to consider membership! If these benefits are of interest, Greg, please let me know at your earliest opportunity.

Standing by for your questions and thoughts, and please feel free to reach me at your convenience if I can assist in any way, Greg.

Best regards,

Jim

Jim Pippin


----------



## travelguy (Jun 19, 2007)

GregGH said:


> Best regards,
> 
> Jim
> 
> Jim Pippin



Greg,

I was under the impression that Jim Pippin was gone from PE and replaced by Karla Jones as Membership Director in May.  What date was that sent and did it list a position for Jim?


----------



## Elsway (Jun 20, 2007)

travelguy said:


> Greg,
> 
> I was under the impression that Jim Pippin was gone from PE and replaced by Karla Jones as Membership Director in May.  What date was that sent and did it list a position for Jim?



I received a similar e-mail from Jim Pippin on Friday, June 15.  His title, according to the e-mail is "Membership Director".

It is always possible that they have co-membership directors.  Or he may not have updated his title on his e-mails.


----------



## TarheelTraveler (Jun 20, 2007)

Personally I'm not a big fan of offering special deals for people.  Too much like trying to buy a car.  You never know if the next person is getting an even better deal and waiving dues for example then impacts the other members who are paying dues.  As a member, I would always wonder what kind of side deals other members are getting.  Am I subsidizing them or are they subsidizing me?  What's wrong with some transperency across the board?  I can rationalize increasing membership fees, but for some reason, I think dues ought to be the same across the board for the same number of nights regardless of when you join, as it should reflect running the company and its properties and a certain amount of usage.


----------



## Steamboat Bill (Jun 20, 2007)

I was called by Exclusive Resorts and was told the following:

1. There is a current freeze on ER membership and they have about 180 people on the waiting list

2. They are increasing the future average home value from $3m to $5m

3. They are getting $400m in investment income from somewhere to buy more property.

4. They are LEASING more ski week properties

5. They will soon have almost 700 homes available for booking

6. There is a price increase on August 1 by $14k for the 15 night and $24k for the 25 night plans

7. They are increasing annual dues by $1k for the 15 night plan and $3k for the 25 night plan

8. They usually raise annual dues CPI + 4%


----------

