Demeure Selected As Successful Bidder For Ultimate Escapes

By: Destination Club News
Date: October 21, 2010

Just over one month since Ultimate Escapes filed for bankruptcy, it has been announced that Demeure has been selected as the successful bidder for many of the club's assets.

"Our goal is to move the membership and portfolio to a safe and secure financial footing as soon as possible," said Demeure CEO and Chairman Peter Schwartz. "Our plan addresses concerns that members have shared around stability, flexibility, transparency and fairness in how a club operates and treats its members. We'll begin contacting Ultimate Escapes members immediately."

Demeure plans to contact the roughly 1,250 Ultimate Escapes members over the next two weeks to begin the transition process while opening more than 300 homes, villas, and hotels to their own portfolio. The club has said that "favorable membership terms" will be offered, but details regarding the membership options have yet to be revealed.

Last month, our dear friend Susan Kime asked Schwartz about his club and Ultimate Escapes. "Let me first say that we know the UE members love the vacation experience – that has engendered their loyalty over years," Schwartz began. "But I think they realize it is very expensive, and the financial instability of the club creates risk and uncertainty that don't mesh well with the seamless vacation experience they are looking for. The instability of UE is due to difficulties with the non-equity based destination club model itself. What's most important from a member perspective is that there will be a known cost and surety with respect to their vacation experience. However, this assurance is difficult now, as it appears that management has lost member confidence."

The recently launched Demeure has been in the works for roughly three years, conceiving an exchange based model that is built around underutilized villas, flats, and second homes around the world, with members receiving discounts of 40% to 50% on stays and second home owners the ability to contribute their own residences to the club in exchange for access. While Demeure didn't play a part in the Ultimate Escapes downfall, they will be the ones that will be forced to rebuild trust with members.

"We believe this is a very good result for all constituencies," said Ultimate Escapes Chief Restructuring Officer Sheon Karol. "We are pleased to provide a home for members of Ultimate Escapes in Demeure that will enable them to begin traveling again very soon."

Information will continue to emerge regarding the sale and the next hurdles will be court approval of the transaction, satisfaction of the closing conditions, and ultimately the unofficial support by members. Check back soon for Sheon Karol's message to members and for more up to the minute information about the Ultimate Escapes bankruptcy and Demeure's acquisition.