Would You Join A Destination Club Started By Executives Behind A Bankruptcy?

By: Destination Club News
Date: October 20, 2010

Second Home Destinations. DUO. Boundless Journeys Club. A wellspring of new destination clubs have launched or are planning to make their formal introduction shortly, each with their own backstory and executive team. The vision for Second Home Destinations began when High Country Club filed for bankruptcy last year, started by a group of members. The foundation for DUO was forged by Quintess, one of the longest tenured destination clubs in the industry. Boundless Journeys Club boldly proclaims that much of their design comes from Doug Burger, a long-time destination club member and launched their new club with a no ownership model.

Another new destination club may be on the horizon with an executive team of former Ultimate Escapes executives at the helm. Their experience virtually unmatched, we ask below would you join a destination club run by executives coming from a bankrupt club?

The advantages of having an experienced executive team are obvious. Starting a destination club simply doesn't begin with making properties available to members, but crafting legal documents, understanding the financial implications of ownership, creating reservation software, staffing of multiple departments, and a long list of other responsibilities. Even executives coming from failed clubs have experience in these areas, giving their new club a solid foundation. They also likely bring a sizeable collection of leads from their prior club, allowing the club to launch immediately and begin courting new members, the life blood of any new destination club.

On the other hand, former members have a long memory, particularly after losing their refundable membership deposits and executives at these failed clubs have their names forever tarnished within the destination club arena. The recently launched Demeure hired Rob McGrath as a consultant earlier this year, more than four years after his club, Tanner & Haley, filed for bankruptcy. Potential Demeure members still associate McGrath's name with the club despite having not served with the club for a number of months and having no long term relationship with Demeure, who would go so far as confirming McGrath's departure earlier this month. If you search for Christian Kirschner, the CEO at the bankrupt High Country Club, Google auto-populates "Christian Kirschner crook" based on the abundance of blogs and articles drafted by members after their club filed for bankruptcy.

Ultimate Escapes bankruptcy is the largest in the history of the sector with the club estimating between 1,000 and 5,000 creditors and nearly $100 million owed to their primary lender CapitalSource, dominating headlines for the past month. Rightfully, the abilities of executives coming from Ultimate Escapes and other failed destination clubs will be questioned. How did they get their previous club to such a point? If the new club reaches a similar impasse, will they be able to save it? Why should I trust them now?

Potential members will need to ask these questions and weigh the benefits and drawbacks of working with previous destination club executives. We ask you below, would you work with a leadership team coming out of a bankruptcy. If you would care to voice your insight, please feel free to reach us at contribute@destinationclubnews.com.