The Benefits Of A Points Based Destination Club

By: Destination Club News
Date: August 4, 2010

Destination clubs frequently refer to themselves as the "anti-timeshare." Rather than having access to one property year after year as is the case with most timeshares, destination club members have an ever growing collection of vacation homes at their fingertips without the hassles of trading or exchanging weeks. Destination club members also enjoy amenities such as personalized travel planning services and onsite concierge support, typically not available to timeshare owners. But while there are multiple differences between the two travel options, many destination clubs have begun to adopt a long established timeshare structure: points based reservations.

In this model, members receive an annual contribution of points that are used to make reservations to club residences. Based on the destination, time of year, and length of stay, a variable number of points are required to make a reservation, giving members more flexibility to travel during the times they wish, to the destinations they wish. Generally speaking, larger residences, more popular destinations, and high travel periods require more points than other club destinations.

The Ritz-Carlton Destination Club introduced their new club last year with many new concepts previously foreign to the sector. Not only did the Ritz-Carlton Destination Club unveil a deeded ownership component, but they would also become the first major club in the United States to feature a points based structure.

"The Ritz-Carlton Destination Club provides the discerning few with a new level of privilege and freedom when they escape to their exclusive vacation home," Peter J. Watzka, Executive Vice President and Chief Operating Officer for The Ritz-Carlton Development Company, Inc. (an affiliate of The Ritz-Carlton Hotel Company), told us. "Portfolio Memberships offer a beneficial interest in a trust where members can customize their vacations through a points-based currency. The Portfolio Membership option allows the ultimate flexibility for the member who prefers a different experience each time they travel. For example, a member may decide to use a four-bedroom residence in Abaco, The Bahamas for a family celebration and use a one-bedroom in San Francisco for a romantic getaway. When choosing from the collection of elite residences, each is assigned a varying nightly point value. The Hotel Exchange Program also enables members who purchased a Portfolio Membership to utilize a portion of their Club points at participating Ritz-Carlton hotels and resorts worldwide."

Using an allotment of 10,000 points as an example, a member of the Ritz-Carlton Destination Club could travel 24 days during their first year of membership, highlighted by a four night stay in Sarasota, Florida in December and three day trips to San Francisco and Washington DC in May and July respectively. Their second year of membership could include a six night vacation to Kapalua Bay, Hawaii in December, a five night visit to Lake Tahoe, California in July, and a four day golf excursion to Greensboro, Georgia in April but only include 21 days of total travel.

The primary advantage of this concept is that a member has the ability to prioritize their points to stay when and where they want. Should we reserve the two bedroom Bachelor Gulch residence in March for six days at 5,450 points or would trips to Abaco for seven days in October, Orlando over Memorial Day for three days, and New York for two days in December be a better way to spend my points?

The international market has long been ahead of the curve, with several leading clubs utilizing a points based reservation model. The Hideaways Club has priority, peak, mid peak, and off peak point requirements for each of their residences. For example, a member wishing to travel for one week during a priority period would spend 30 points of their annual allotment. A member traveling for a week during an off peak period would need only 20 points.

Canada's Luxus Vacation Properties, one of the most exciting destination clubs in the industry for their equity based model, offers Silver, Platinum, and Diamond membership options, ranging from 55 to 110 points. Members are able to book vacations up to 16 months in advance, paying a 25% point premium for these advanced reservations. On the other hand, vacations booked within 90 days receive a 25% point discount. Members also receive "Bonus Days" that are available for vacations booked within 30 days that do not affect point balances.

Simply put, this points based currency gives members the ability to purchase the vacation time they wish. Members can choose to make a small number of reservations in larger homes in popular destinations during peak travel periods, a larger number of reservations in more intimate residences during slow travel periods, or any combination of the two.

Points based structures are just one of the many models used throughout the destination club industry. If you would like to learn more about these various designs and find out which may be best for your unique travel needs, request a free copy of our Destination Club Guide.