M Private Residences Opens Up Secondary Sales Channel

By: Destination Club News
Date: February 10, 2010

Canada's largest destination club, M Private Residences, has opened up a secondary market that will allow new members the ability to procure memberships at steep discounts and let members wishing to exit the club the ability to set their own prices upon their departure. Continuing until the end of April, this secondary sales channel closely mirrors a similar structure previously used by the club.

Late in 2008, M Private Residences made a series of changes to their destination club, including the introduction of the secondary sales to club members. Members looking to leave the club were put on a resignation list in order of the date they expressed their intent to exit the club. Simply put, the member who had been on the resignation list the longest would be highest on the list; the second longest on the list would follow and so on. The new redemption structure created by M Private Residences would allow potential members to select the membership option they desired and then to submit an offer for that membership. This offer would be given to the member highest on the resignation list with the selected membership option. That member could elect to accept the offer, receiving the proposed amount and transferring the membership to the new member. If the member rejected the offer, it would be proposed to the next member on the resignation list and follow the same pattern. If no members accepted the offer, the prospective member could submit a new offer and the process would begin anew.

While virtually identical to this previous structure, M Private Residences has made some changes to the current offer according to the club's Vice President of Sales & Marketing, Michele Beitel. "The current offer is identical in process from last year's secondary market with a few differences to maintain value in the exiting members' share price. We have instituted a right of first refusal clause making sure there will not be any low ball bids and acceptances," said Beitel. "The transferee now must pay a 7% activation fee and the asking price is higher by about $15,000 as the value of the portfolio of homes has increased with the increase in housing prices in some of the areas we have homes in."

The savings continue for M Private Residences' members as the club has announced that annual dues will not be increased throughout 2010. As mentioned by Beitel, the value of the properties within the portfolio have seen some increases and M Private Residences plans on adding another property to their portfolio within the next two months.

Many of the destination club industry's major players have again begun to purchase properties, a tell tale sign about the strength of the industry. Far from rocket science, when clubs are purchasing properties, they likely have a strong sales funnel. Exclusive Resorts, the world's largest destination club, finished 2009 with their strongest month of the year. The Abercrombie & Kent Residence Club is seeing positive gains on their attractive pricing offers.

Including the current offer available through M Private Residences, there are many incentives available throughout the destination club industry. If you are presently considering joining a destination club, a good place to begin is our free Destination Club Guide where you will learn more about the benefits and risks of the model, how it compares to other luxury travel options, and a list of suggested due diligence questions to ask when speaking with a club.