Ultimate Escapes 2010 First Half Results

By: Destination Club News
Date: August 11, 2010

Luxury destination club Ultimate Escapes filed their quarterly report earlier this week, discussing the club's results through the end of June. The world's first publicly-traded destination club, Ultimate Escapes is required to disclose far more public information than any of their peers, giving members and potential members alike a glimpse into the club's inner workings.

At the end of 2009, Ultimate Escapes counted 1,214 members across their three clubs: Premiere, Signature, and Elite. As of June 30, 2010, Ultimate Escapes had 1,232 total members. Compared to the three months ending June 30, 2009, the world's second largest destination club did see an increase in membership fees and annual dues but also in operating expenses and a decrease in revenue, as outlined by the club's comments below, with numbers in thousands.

"For the three months ended June 30, 2010 revenues of $7,558 decreased by $1,253, or 14%, from $8,811 for the same period in 2009. Membership fees of $2,135 for the three months ended June 30, 2010 increased by $1,260 or 144% compared with $875 for the same period in 2009. Membership annual dues were $4,945 the three months ended June 30, 2010, representing an increase of $771, or 19% from annual dues of $4,174 for the same period in 2009. Both membership fees and annual dues increased because of the larger membership base resulting from the September 2009 acquisition of Private Escapes. Other revenue was $478 for the three months ended June 30, 2010, representing a net decrease of $248, or 34%, compared with $726 for the same period in 2009. The decrease was mostly due to $203 of nightly fees charged to Private Escapes' members in 2009 as cross reservation program fees allowing their members to stay at our properties. This cross reservation program ended effective September 15, 2009, when we acquired Private Escapes. The remaining $45 of the decrease is due to trips in 2010 having fewer goods and services billable back to the members. Revenues for the three months ended June 30, 2009 included a $3,036 assessment fees charged to members in 2009 that were not charged in 2010."

Earlier this month, we profiled Exclusive Resorts first half results for 2010. The world's largest destination club enjoyed their strongest sales month in nearly two years in June. Earlier in the year, Ultimate Escapes President and CEO Jim Tousignant stated that the club's sales pipeline was "the highest it's been in the past 18 months." With the economy still in flux, this week's 10-Q filing stated that the club has "experienced a decrease in new membership sales and existing member upgrades throughout 2009 and continuing in 2010."

Ultimate Escapes is currently looking to "increase cash flow in order to cover 2010 operational expenses" and stated that they may "encounter a liquidity event." As always, we will continue to monitor the club and let you know more information as it becomes available.

If you are interested in destination club membership, a good place to begin is our Destination Club Guide. This free resource will help you learn more about the destination club model, including its benefits and risks, with contributions from members, executives, and industry insiders.