# Large Membership Vs Small Membership



## NeilGoBlue (Sep 18, 2007)

With all the comments regarding the UR and PE merger, most members that have posted have applauded the merger.  Perry made a post in another thread that he wants a club with a 5000 member base before he would buy a membership. One of the contexts of these posts is that bigger is better.

But is it really? 

Do you all really want to belong to a club with 5000 members?

My opinion? I don't know.  There is something about being small that appeals to me.  Being part of a club vs a multi billion dollar REIT.

I'm clear that the more members, the more destinations.  But a  number around 500 seems a good number to me.  Plenty of room for 30-50 destinations, a big enough member base that the investors and managment can make money, and small enough to be part of a 'club'.  Big enough where the club won't go bankrupt.  Small enough that everybody knows your name, when management of the club is in town, they take you out to dinner, etc. 

Bigger doesn't mean more destinations.  It just means more homes in the different destinations.  

Anyway... I'm not totally convinced either way... but 5K seems to much...100 members seems like not enough...


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## Kagehitokiri (Sep 18, 2007)

my earlier thoughts >



Kagehitokiri said:


> peresonally[sic ], im more interested in the exact nature of the club, and their current roster of homes.
> 
> in terms of an actual cap, i guess i kind of like that idea? 3 of the 4 clubs im watching happen to have caps. its not one of the things i really considered much though. which is kind of interesting.





Kagehitokiri said:


> 3 of the 4 clubs im watching[*] have membership/property caps. it wasnt something i really looked at, but i do kind of like it.. it is fairly significant that the club has based their business model on a specific numerical goal. so they will profit X once reaching that cap - and then increasing by X over X time, etc. and theyre satisfied with that. it seems like the potential for customer service is better IMHO, not just because youre limiting the number of members, but also because they are demonstrating they are not simply trying to sign as many people / make as much profit as possible - there is a quality assurance aspect - like other limited "clubs" or service oriented things like concierges etc. limits can have real benefits. OTOH if ER selected their properties a little differently than they currently do, i WOULD be more interested in them.. (either now, or just watching them for the future) even though their usage isnt as good as some others, the number of properties could be an advantage.


some membership caps >

ciel* - 100 
yellowstone club world - 150 
crescendo - 266 (REIT)
worldwide private residences* - 300 (looks like REIT/investment/security equivalent in UK)
markers - 325
lusso collection* - 550

it was interesting to watch solstice launch with a cap of 42 though, and 7 properties. they quickly sold out. they then decided to expand (done with merge with parallel) and i believe do not plan to return to a cap.

huh, just thought about something with ER - what if you want to resign when theyre waitlisting? do you have to wait until after the waitlist ends, and 3 people have been let in?


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## LTTravel (Sep 18, 2007)

Kagehitokiri said:


> my earlier thoughts >
> 
> 
> 
> ...




I have been told by ER people that if you decide to quit that you get a refund within 30 days. There is no wait for a refund. It's OK, they keep 20%. The 3 in 1 out has not been enforced.


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## Kagehitokiri (Sep 18, 2007)

good to know its not being enforced, but doesnt mean they cant decide to do so..


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## GOLFNBEACH (Sep 18, 2007)

NeilGoBlue said:


> Bigger doesn't mean more destinations.  It just means more homes in the different destinations.
> 
> ...



I asked the same question in another thread, and would love to hear more opinions on this.

IMO once you have 30-50 great destinations more members are not necessarily good.  More members will only result in more houses in the same destinations.

The problem with this approach is that the DC cannot increase sales and profits unless they grow.  Without increasing sales and profits most companies will not remain competitive.


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## vivalour (Sep 18, 2007)

*Big vs. small*



GOLFNBEACH said:


> The problem with this approach is that the DC cannot increase sales and profits unless they grow.  Without increasing sales and profits most companies will not remain competitive.



I believe that Nick, CEO of DHH, posted something here about rolling their DHH properties into a REIT at some future date, in this way allowing the founders/financiers to capitalize on their investment without having to grow forever or to sell off properties.


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## Kagehitokiri (Sep 18, 2007)

also, some start as REITs to begin with, like crescendo. others make their profits from annual dues. etc. you should be able to learn about the basic model of a specific club during due dilligence. hopefully clubs will continue increasing financial transparency. (another thing opposite of TS)


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## puffpuff (Sep 19, 2007)

Many DCs have explored REIT model as part of an exit strategy and have abandon that idea due to regulartory controls in the US. Nice to talk about it but not a reality from my understanding so far.


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## Kagehitokiri (Sep 19, 2007)

crescendo *is* an REIT. worldwide private residences seems to be the equivalent in the UK. (because they say "available to qualified investors only" and have a stated 10-year maturity etc)

also, as vivalour said, nick of DHH did not say it would be an REIT for members. he seemed to imply the owners/investors were going to turn the property portfolio into an REIT that would be a source of cash flow for them, and not members. it was interesting nick suggested their lawyers told them they could NOT offer equity in any way, because that would make it a security or whatever.. so thats why they use the resale/transfer model, instead of being responsible for the equity themselves.


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## GOLFNBEACH (Sep 19, 2007)

Would like to hear more opinions on small membership vs. large membership.  Don't want to see this thread getting off-topic.


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## travelguy (Sep 19, 2007)

puffpuff said:


> Many DCs have explored REIT model as part of an exit strategy and have abandon that idea due to regulartory controls in the US. Nice to talk about it but not a reality from my understanding so far.



This is also my understanding from talking to several DCs about it.


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## Kagehitokiri (Sep 19, 2007)

if a club is an REIT (for members) its going to have a *smaller* membership.


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## puffpuff (Sep 19, 2007)

Kagehitokiri said:


> crescendo *is* an REIT. worldwide private residences seems to be the equivalent in the UK. (because they say "available to qualified investors only" and have a stated 10-year maturity etc)
> 
> also, as vivalour said, nick of DHH did not say it would be an REIT for members. he seemed to imply the owners/investors were going to turn the property portfolio into an REIT that would be a source of cash flow for them, and not members. it was interesting nick suggested their lawyers told them they could NOT offer equity in any way, because that would make it a security or whatever.. so thats why they use the resale/transfer model, instead of being responsible for the equity themselves.


you may want to doublecheck on their REIT status. My understanding is taht they are a LLC and you buy into as members ( shareholder)  of an LLC. 

I could be wrong.


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## Kagehitokiri (Sep 19, 2007)

youre correct there is an LLC, but >



> Crescendo is a unique destination club structured as a REIT. Every member is an investor in Crescendo and participates directly in the real estate portfolio. Crescendo confirms each prospective member is an accredited investor qualified to assess the risks of the real estate investment.
> 
> The REIT structure provides strong asset protection for member deposits. However, it also limits the club’s growth and ability for the club to scale its operations. Since the club defines itself strictly as a real estate security product, it’s prohibited from direct marketing via traditional media channels. As such, Crescendo relies on referrals from current investors to grow their member base.


http://www.heliumreport.com/archive...mber-explains-why-his-family-joined-crescendo

Worldwide Private Residences is similar, i presume LP is equivalent to LLC in the UK, and they have the same restrictions because they are also set up as a security.
http://www.tugbbs.com/forums/showpost.php?p=364095&postcount=71


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