Abercrombie & Kent Destination Clubs
In July of 2003, Private Retreats had already established a foothold in the destination club industry and CEO and Founder Rob McGrath began to look for ways to continue the club's unprecedented growth.
Launched in 1998, Private Retreats created a new model in the luxury travel industry. Several years earlier, McGrath and two partners purchased the 29-unit Franz Klammer Lodge in Telluride, Colorado for $28 million. The group began selling tenth-share interests in each unit and took in $29 million in the first year. After another similar venture in Jackson Hole, Wyoming, McGrath sold his interests and looked to evolve the shared ownership model, convinced that travelers wanted more travel options and increased availability. McGrath's vision took components of the country club market, fractional jet model, and shared ownership and the foundations of the destination club model were in place. Members were promised guaranteed reservations, low annual dues, full refundability of their membership deposit, and a fraction of the cost of second home ownership.
Back to 2003, Private Retreats had grown to over 300 members and connected with luxury adventure giant Abercrombie & Kent. McGrath's demonstrated success over the previous years were punctuated by his winning the Ernst & Young's Rocky Mountain Region Entrepreneur of the Year in Real Estate in June of 2003. In July of the same year, Abercrombie & Kent agreed to license their name to the young club, creating Private Retreats by Abercrombie & Kent. Now with an established brand name 40 years in the making, the club operated as Abercrombie & Kent Destination Clubs and eventually created sister clubs Distinctive Retreats and Legendary Retreats.
The club's success continued, but many of the risks associated with being an early entrant began to catch up with the club. Citing growing competition and the required short-term leases to meet availability, the club was unable to continue making payments to the luxury travel giant and lost the Abercrombie & Kent license. Virtually overnight, the club remarketed themselves as Tanner & Haley, named after McGrath's two young children.
By 2006, Tanner & Haley was forced into bankruptcy and 874 members were left without a club until they were acquired by Ultimate Resort for approximately $100 million. Despite the fact Abercrombie & Kent had no control over the operational policies of the club, many attached the bankruptcy to A&K name and lawsuits were filed against Abercrombie & Kent and Geoffrey Kent. According to legal documents, A&K was not an owner of the club, not the operator of the club, and not the manager of the club.
Abercrombie & Kent would again return to the destination club industry in April of 2008, looking to emphasis the differences between their new club and the club they were once attached to. The Abercrombie & Kent Residence Club launched after acquiring two leading equity destination clubs BelleHavens and Crescendo Residences. Utilizing a debt-free model and committing to annual member meetings, a core competencies has remained a solid financial structure to ensure that the outcome at Tanner & Haley will not happen at A&K. Despite the financial focus, litigation against Abercrombie & Kent continues today.
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Tanner & Haley