Research Outlines Destination Club Familiarity and Interest Among Affluent Households

By: Destination Club News
Date: June 15, 2009

The bankruptcies of High Country Club and The LUSSO Collection are likely evidence enough to show the decline in interest in the destination club model with the world in an economic downfall, but research by The American Affluence Research Center (AARC) furthers this assumption.

The AARC surveyed the nation's wealthiest 10% of households in March, including 640 men and women with an average household income of $290,000, average primary residence value of $1.2 million, average net worth of $3.1 million, and average investable assets of $1.4 million.

Approximately six out of every ten respondents indicated no familiarity with either the destination club or private residence club concepts and less than 1% indicated serious consideration of the purchase of a destination club membership, time share, or private residence club. Last surveyed in 2007, the new results indicate "little or no change" in familiarity with the destination club concept over the past two years, but does show "modest improvement."

Familiarity increased in the higher income and net worth groups with familiarity of approximately 40% for the destination club concept. Unfortunately, of those who did indicate familiarity with the destination club concept, 82% could not name a brand of which they were familiar. Of the 18% that could name a brand, Exclusive Resorts, the world's largest destination club, was most frequently mentioned. The AARC noted that some brands and companies were named incorrectly, indicating "some confusion about the concept" and anecdotally, the similar brand names of many of the club's likely also contributed to this low result. Those who checked one or more brands averaged 1.6 brands of which they were familiar.

Showing slight improvement since 2007, respondents who indicated familiarity with the destination club concept checked at least one of the listed brands as one they had heard of. Again, Exclusive Resorts led the way with nearly two-thirds checking the club. Ultimate Escapes, the fusion of Private Escapes and Ultimate Resort, saw a decline as respondents were more familiar with Private Escapes in the 2007 survey than with Ultimate Escapes in the most recent study.

Survey respondents indicated that a negative 12 month outlook for their business conditions and household incomes, with declines in their savings, investments, and home values over the past two years. Because of these declines, over 80% of the survey respondents reported that they "made a general effort to reduce or defer expenditures during the past 12 months, would make a conscious effort to do so during the next 12 months, or had done so in the past and would continue to do so in the future."

According to the AARC, these results are representative of the most affluent 11.2 million United States' households that account for nearly 40% of total personal income and two-thirds of the personal wealth of all Americans.

Despite the overal negative results, there are results that are positive for the destination club industry. Just under 30% of the sample reported full ownership of a second home. Destination clubs largely market their product to those looking to replace their second home or looking at second home ownership.

If you are interested in learning more about the destination club concept, including the benefits and risks of membership, comparisons to other luxury travel options, and suggested due diligence questions to ask when speaking with a club, request a free copy of our Destination Club Guide.