Ultimate Escapes Voted Biggest Destination Club Bankruptcy By Readers

By: Destination Club News
Date: September 26, 2010

Now over a decade old, the destination club industry has enjoyed unparalleled highs, reaching nearly $1 billion in revenue per year, to the deepest of valleys, forcing many of the sector's largest clubs to file for bankruptcy. These successes and failures have both shaped the destination club space as it is seen today. The boom years led to rapid expansion in the industry with new players looking to share in the profits. Many thought those times would never end and began rewarding executives with massive salaries, purchasing properties in anticipation of new membership growth, and throwing diligent financial principles to the wind. The inevitable bust that followed these peaks saw both new clubs and old fold. As sales declined, new clubs were unable to compete against the industry titans. Established clubs were unable to course correct and respond to the ever changing market climate.

We asked our readers over the past week to voice their opinion on what they believed was the most game changing destination club bankruptcy in history, Tanner & Haley, High Country Club, or the recent filing at Ultimate Escapes.

Each of the three have strong arguments. Tanner & Haley, the world's first destination club, created the entire industry and while they filed for bankruptcy in 2006, legal battles around the club continue still today. High Country Club quickly became a major player in the sector for their low cost model, signing on several hundred members in a short amount of time. The fact that the club was a founding member of the Destination Club Association, a group created to help assure buyers that another Tanner & Haley wouldn't happen, made the High Country Club bankruptcy cut even deeper during their very public closure. And just earlier this month, Ultimate Escapes filed for bankruptcy protection, estimating between 1,000 and 5,000 creditors, $100 million to $500 million in liabilities, and just $10 million to $50 million in assets.

Our readers have made their opinions abundantly clear as nearly two out of every three votes cast identified Ultimate Escapes as the biggest destination club bankruptcy in the industry's history.

Many of the facts support such an opinion. With approximately 1,300 members, Ultimate Escapes is by far the largest destination club in terms of members to file for bankruptcy. To add to matters, a strong contingent of Ultimate Escapes members came to the club after enduring the Tanner & Haley bankruptcy, furthering the anger by many of the members who were now suffering through their second destination club bankruptcy.

The Ultimate Escapes bankruptcy filing showed that the club owed nearly $500,000 to Trump International Hotel & Tower, millions of dollars in legal service fees and litigation settlements, and several resorts where they had homes.

At present, Ultimate Escapes and restructuring firm CRG Partners are evaluating their options, including the full or partial sale of the club's real estate or an acquisition by another club. The coming days, weeks, and years, will determine the full scope of the Ultimate Escapes bankruptcy, so check back frequently for more information about every piece of breaking news about Ultimate Escapes and the rest of the destination club industry.