Jim Tousignant Presents at Leisure Real Estate Developers Forum

By: Destination Club News
Date: October 27, 2005

Jim Tousignant, the Founder, CEO, and President of Ultimate Resort spoke at the Leisure Real Estate Developers Forum yesterday with his presentation "Non-Equity Destination Clubs: Understanding the Issues."

Following a brief overview on the non-equity destination club model, Tousignant identified the five major types of destination clubs, listing where he believed that the industry's leading clubs reside.

Tousignant would go on to compare non-equity destination clubs to the more commonly known timeshare structure. The major differences that Tousignant noted include:

  • Non-Equity Destination Clubs
    • Described as a "Mass Affluent Baby Boomer," the destination club audience courts members with an annual income in excess of $300,000 and a net worth over $1 million.
    • Focus on flexible travel, personalized services, and unique experiences, not on real estate ownership.
    • Long sales cycle, typically between 60 and 90 days.
    • Members receive no real estate or financial interest in club properties.
    • No guaranteed access.
    • Properties can change at any time.
  • Timeshares
    • Traditionally sold to a buyer with an annual income of less than $70,000 and a net worth less than $100,000.
    • Focus on a purchase of actual real estate.
    • Short sales cycle, typically sold during the first meeting.
    • Owners do receive real estate interest in the property.
    • Guaranteed access to a specific property during a specific time.
    • One property.

Tousignant would continue that some of the leading non-equity destination clubs have currently been working together to develop best practices and to work towards increased regulation, including a meeting in Denver earlier this year and ongoing discussions with state regulators and the American Resort Development Association. The parties are currently on the second draft of a "Model Luxury Residence Destination Travel Club Act" that will:

  • Give statutory recognition to Luxury Residence Destination Travel Clubs in each applicable state.
  • Provide a consistent, fair regulatory framework for clubs to operate in various states throughout the US.
  • Establish procedures for the creation, sale, promotion and operation of non-equity clubs.
  • Provide consumer protection through full and fair disclosure to purchasers and prospective purchasers.
  • Require every club offered for sale or created and existing in each state to be subject to provisions of the Act.

Tousignant would identify the key elements of this Act as "full and fair disclosure" and giving consumers financial assurances, including the right to cancel their membership and receive a refund.

Still a young sector, these steps are very positive to protect consumers, and ultimately the clubs, from what Tousignant refers to as "bad operators." With the destination club model still unknown to most, these "bad operators" could potentially scar the leading clubs in the industry and members if they go unchecked.

If you are considering destination club membership, request a free copy of our Destination Club Guide for more information about the benefits and risks of membership and suggested due diligence questions that will help you during your club evaluation.