The Oyster Circle's Paul Crowe Discusses Quintess Partnership

By: Destination Club News
Date: February 16, 2009

Less than a month ago, leading destination clubs on both sides of the Atlantic partnered together to allow members of both clubs reciprocal access to the other's portfolio of luxury real estate. On January 19th, The Oyster Circle and Quintess joined together to expand the global reach of both of their clubs and now offer their members access to nearly 100 properties in 50 of the world's most premiere destinations.

Following the announcement, The Veras Group interviewed Ben Addoms from Quintess to learn more about the partnership and how the partnership will benefit members of both clubs. Last week, we sat down with Paul Crowe, CEO of The Oyster Circle, to learn more about how the partnership was conceived and changes he has made to make The Oyster Circle sustainable into the future.

The Veras Group: How did the Quintess/The Oyster Circle partnership come about?

Paul Crowe: I actually was the one that contacted them. We are a certain sized club and wanted to increase our size with more properties and saw potential in partnering with a club like Quintess.

I spoke with Pete (Estler) and Ben and found that they were the best fit. Our properties are virtually identical. Our services are virtually identical. It is a very easy fix. If a member goes to a Quintess property, they are getting almost exactly the same service as if they were traveling to The Oyster Circle properties.

We considered several other destination clubs, but Quintess was the only one we really moved forward with. It has been very positively received by our members.

The Veras Group: What Oyster Circle property or properties do you believe will be most popular with Quintess members?

Crowe: Spain and Portugal. We also knew southern France would be quite popular with St. Tropez and Cannes.

The Veras Group: What Quintess property or properties do you believe will be most popular with The Oyster Circle members?

Crowe: Initial reactions from our members are Paris and London. We are seeing interest in east coast properties like Florida and Kiawah. Hawaii has always been one of the getaways that many of our members want to travel to but have never gotten the chance.

We have also seen members looking at Cabo to get away for the winter.

The Veras Group: What are the differences between the European homes Quintess has to offer and those in The Oyster Circle portfolio?

Crowe: One thing to be aware of is that we have some big houses, but ours are traditionally a little smaller than US houses. You build things big in the US. Ours are also a bit older. We have one 250 years old.

We are a little bit less resort based and have more stand alone homes. I traveled around Europe extensively prior to The Oyster Circle and we have a great number of homes that I know if a US member traveled to, they would be blown away.

The Veras Group: How will The Oyster Circle members reserve properties in the Quintess portfolio?

Crowe: Our members can go on the Quintess website and check availability. They then contact us and we can make their reservations.

Quintess did the lottery as we have fewer homes than they do. We are roughly 12 percent the size of Quintess and our smaller number of members can reserve on a first come, first served basis.

The Veras Group: We spoke with Ben Addoms regarding this partnership earlier and he had nothing but high praise for The Oyster Circle. What can you say about the management team that you have worked with to get this partnership finalized?

Crowe: They are excellent. I made three to four trips to visit the team prior to finishing this partnership and Ben and I are on the phone nearly every minute. They are very committed and their reaction time to us is very good. One to two hours max. We spoke to members prior to announcing this and Ben came over here and met with many of our members to discuss.

They are very innovative. Ben and I agree that in order for destination clubs to survive, annual dues must cover operating costs.

The Veras Group: Dovetailing off that, do dues at The Oyster Circle cover your operational costs?

Crowe: We are still a relatively small firm so we have not quite reached the point where our annual dues cover operational costs. We need to reach a threshold of members for that to happen. What we have done is new members are now paying 30 percent more in annual dues than our old members. We didn't feel it to be fair to charge our long time members the same as our new ones.

The Veras Group: What was occupancy for 2008 and how do you think the Quintess partnership will affect this number moving forward?

Crowe: It was just under 50 percent. 49 percent occupancy for 2008. Our partnership with Quintess is an exchange of nights. We have a smaller number of properties and don't want to swamp The Oyster Circle properties with Quintess members, so the lottery was used. If Quintess goes over their number of nights, we will cure.

The Veras Group: What level of financial disclosure is provided to members and prospects interested in The Oyster Circle?

Crowe: We are a privately owned company, so little right now, but we are moving towards full disclosure and believe that it is the only way to go moving forward.

The Veras Group: With nearly every destination club in the industry making changes in 2009 to combat the worldwide economy, what changes, if any, has The Oyster Circle made?

Crowe: We are making ourselves as lean as possible without compromising our members, as they are our life blood. We have cut back on marketing and scaled back sales goals for 2009.

A very substantial portion of our 2008 spend was PR and marketing. We significantly cut those for 2009 and the sales team is now just myself and a sales director.

We took every cost apart to see if we could do things more efficiently. Everything down to the gardeners at our properties to see if we could save more. Everyone, not just destination clubs, are doing themselves a disservice if they aren't doing this.

In our discussions with both The Oyster Circle and Quintess, both hinted that a more significant and permanent partnership could develop in the future. As the destination club industry continues to digest the High Country Club filing for Chapter 7, LUSSO Collection filing for Chapter 11, and the overall insecurity of the real estate and financial markets, partnerships that greatly increase the global reach of the club with little to no capital expenditures will be highly sought after throughout the industry. The near seamless integration that both Quintess and The Oyster Circle executives have spoken of also allow the management teams of each to concentrate on other more pressing issues that are hampering nearly every destination club in the industry.