Private Escapes
Resignation and Redemption

One of the earliest entrants into the destination club industry, Private Escapes has gone through several different resignation and redemption structures during their long and storied tenure.

Created in November of 2003 and selling their first membership in December of the same year, Private Escapes would brand themselves as the "first and only affordable destination club." Not only would the one-time membership fee required to join the club be signficantly less than other clubs in the industry, but Private Escapes pledged to refund 100% of the deposit if a member elected to leave the club.

Members were required to remain with the club for a minimum of 18 months before they would be eligible for redemption. Members wishing to resign would be placed on a resignation list where the first requested would be the first resigned. For every third membership sold by the club, the member lowest on the list would be refunded.

As the industry matured, more and more clubs transitioned from a 100% refundable membership deposit to a 80% refundable structure and Private Escapes would follow suit. In February of 2007, the club would adopt a "transfer fee" that would be equal to 20% of the total membership fee. Semantically speaking, the "membership deposit" was still 100% refundable, but only totaled 80% of the total membership fee. This change in structure would only affect Private Escapes Premiere and Private Escapes Platinum. The recently launched Private Escapes Pinnacle was still in its early Charter Membership phase and would refund 100% of the total membership fee as the club originally was structured.

Prior to their merger announcement with Ultimate Resort in September of 2007, Private Escapes again would slightly modify their redemption structure. Rather than returning a flat 80% of the membership fee and absorbing 20% as a transfer fee, the club would refund "80% of the then market rate."

Today, this model is increasingly popular within the destination club industry. As clubs increase prices, members are due a higher redemption amount. Based on some simple math, if a club increases prices more than 25% compared to the purchase price a member paid to join, they will receive more than they originally contributed.

This is the same structure previously used at Ultimate Resort and is now used at the combined Ultimate Escapes.

If you are evaluating Ultimate Escapes or any other destination club, there are multiple due diligence questions that should be asked pertaining to resignation and redemption. For a list of suggested questions and a background about the benefits and risks of destination club membership, please request a free copy of our Destination Club Guide.