LUXLife Creates Exchange Offering

By: Destination Club News
Date: February 20, 2011

Nearly a year ago, LUXLife, a destination club based out of Hong Kong, introduced their Equity Shares Villa Membership, a new option that provided "ownership plus a full VIP LUXLife Membership." Available for between HK$2.9 to HK$3.9 million, a maximum of 48 of these memberships would be offered, giving members 1/12th equity share increments to the club's residences. Now LUXLife has Exchange Villa Memberships, allowing luxury villa owners the opportunity to contribute their asset into the club's portfolio.

Not limited solely to luxury villas, other assets such as yachts, boats, planes, or private jets can also be placed into the program. Contributing members can exchange time in these for equal value privileges, use, and access to the LUXLife portfolio.

"In essence any third party owner who wishes to place their villa or luxury asset into the LUXLife portfolio may do so for a specific number of allocated and approved days use per year in exchange for an equal value of days use in LUXLife," writes the club. "This allows the third party owner to use the ownership and equity financial value of their villa or other luxury asset to access and gain reciprocal exchange use of the LUXLife villas and the club program. LUXLife will carefully vet and review each potential villa or luxury asset offered for exchange by another owner to make sure that the villa or asset and the said owner meet the highest suitable standards for inclusion in and participation in the LUXLife program. It has to be the right match for all concerned."

This exchange based model has picked up momentum recently in the destination club industry, as it is a pillar in the design of Demeure, the club that acquired select assets of the bankrupt Ultimate Escapes. Demeure's "fair exchange program" allows property owners the opportunity to contribute their home into the Demeure portfolio, allowing them to offset some, if not all, of their travel costs with the club.

The obvious advantage to clubs using this exchange based concept are the greatly reduced expenses as the purchase and maintenance costs are paid by the members. In turn, members enjoy any real estate appreciation on the property and can set when they would like their vacation residence to be available to other members.

Equity, exchange, and leased based models all seem to be on the rise in recent years. If you would like to provide your input on which will become the dominant market leader, join our new Destination Club Forum where you can ask questions, provide your insight, and discuss all of the happenings in the destination club industry.