On Valentine's Day in 2005, Ultimate Resort launched, marketing themselves as "the most affordable luxury destination club on earth, designed to provide individuals, families and corporate members with virtually unlimited access to 100 luxury residence club properties planned over the next few years, each averaging $1.5 million in value and located in premier beach, mountain, golf and city resort destinations throughout the United States, Mexico, the Caribbean and Europe."
Founded by Jim Tousignant, a former Thomson Financial and Morgan Stanley Managing Director, the club's approach was to cater to luxury travelers, but also make an aggressive play at the untapped corporate market.
"Now the corporate market can enjoy access to a growing portfolio of luxury homes at tope destinations with all the amenities and concierge services of a private country club - all at a very affordable corporate membership fee," Tousignant said in the club's launch press release.
"Ultimate Resort appeals to the growing base of 6 million 'mass affluent' luxury travelers, many of whom are looking for the flexibility and benefits of a luxury destination club, but at a fraction of the high cost of other leading destination clubs. Membership fees in Ultimate Resort are very affordable - 50% less expensive than other leading clubs such as Exclusive Resorts and Abercrombie & Kent Destination Clubs, offering our club members a great value," Tousignant continued.
By August, Ultimate Resort had sold out the first phase of their Charter Membership offering while Abercrombie & Kent Destination Clubs was moving in the other direction. Founder and CEO Rob McGrath had partnered his clubs with Abercrombie & Kent back in 2003, but due to increased competition and dozens of costly short-term leases to satisfy occupancy, McGrath was unable to continue payments to access the A&K name.
McGrath quickly rebranded his collected three clubs, Private Retreats, Distinctive Retreats, and Legendary Retreats, under a new club called Tanner & Haley, named after his two children. As the industry titan began to collapse, Ultimate Resort quietly continued to generate momentum, signing a partnership with Stirling Sotheby's International Realty, winning Panache magazine's "Finest Luxury Destination Club award, and signing Boston Celtic's Coach Doc Rivers as a member.
Over 1,000 miles away in Westport, Connecticut, the ramifications of Tanner and Haley's business model and drastic rebranding had taken their toll on membership sales. On July 23, 2006, the club filed for Chapter 11 bankruptcy to reorganize. According to Holly Felder Etlin, the club's Chief Restructuring Officer, "As part of the Chapter 11 process, we will be reviewing and, where appropriate, revising Tanner & Haley's business model so that, upon completion of the financial reorganization, the company will be better positioned to achieve long-term strength, stability, profitability and growth. We are also committed to having the company emerge from the process with greatly enhanced corporate governance and financial transparency."
While the club began the process, Ultimate Resort and Tousignant saw an opportunity. Ultimate Resort submitted a $98 million bid to acquired the assets of Tanner and Haley that was unanimously approved by Tanner & Haley's Unsecured Creditors' Committee. Just days after the approval, billionaire J. Joe Ricketts, the Founder of TD Ameritrade and of upstart ultra-luxury destination club Ciel, submitted a $108 million bid for the assets. Ultimate Resort would eventually up their offer to $100 million and Ciel to $112 million, but the Committee and Judge Alan H.W. Swiff remained with Ultimate Resort.
"I’m delighted that — less than four months after Tanner & Haley’s Chapter 11 filing — our intense efforts to preserve as much value as possible for Tanner & Haley’s members and other creditors have been so well rewarded. Ultimate Resort is one of the industry leaders in the luxury destination club business, and will assume ownership and management of most of T&H’s current properties. I’m also pleased that the vast majority of Tanner & Haley’s current employees will continue to be employed by Ultimate Resort once the purchase agreement is approved and the transaction executed. In my view, this is the best possible result, under challenging circumstances, for everyone involved," said Etlin.
Overnight, Ultimate Resort went from a young club with under 100 members to the dominant number two club with almost 1,000 members, passing other leading clubs Private Escapes, Quintess, and Solstice Collection.
In September of 2007, Ultimate Resort announced another substantial merger when news hit that they would merge with Private Escapes, the industry's third largest club for a reported $200 million. Months later in February of 2008, Ultimate Resort acquired equity destination club Ventures Equity Vacation Club, bringing in six homes and approximately $17 million in real estate.
As Ultimate Resort and Private Escapes continued to work towards finalizing their merger, now branded as Ultimate Escapes Destination Club, the financial and credit markets began their historic meltdown, punctuated by plummeting real estate values. Forced to delay, the merger agreement was completed in June of 2009.
To learn more about Ultimate Resort, please visit any of the club's quick links found to the right. To learn more about the new club, please visit our Ultimate Escapes Overview page or request a free copy of our Destination Club Guide.
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Tanner & Haley