History
Private Retreats launched the industry in 1998, with one club, Private Retreats, under the company name Preferred Retreats. The company was later renamed Tanner and Haley, with over 900 members in 2006.
Brent Handler and Brad Handler founded Exclusive Resorts in 2002 and, with the backing of AOL founder Steve Case, Exclusive Resorts became the industry leader in terms of members, locations and homes. The Handler brothers sold majority ownership of Exclusive Resorts to Steve Case in 2004 and by the end of 2009, the club claimed over 3,250 members, nearly 400 homes in more than 35 locations, and delivered nearly 100,000 completed vacations.
Following the launch of Exclusive Resorts, from 2003 to 2006 entrepreneurs launched competitive clubs such as Quintess, Hideaways, Private Escapes, and Ultimate Resort. Specialty clubs joined the mix as well, for instance The Markers Club for golf. In 2009, a Fortune 200 company, Marriott International Inc. entered the market when they launched the Ritz-Carlton Destination Club.
In 2011 Brent and Brad Handler re-entered the destination club marketplace with the launch of Denver-based Inspirato. On May 16, 2012, 16 months after opening, Inspirato announced it had surpassed the 10,000 vacation-night milestone in addition to servicing nearly 2,000 club members, receiving capital investments from Kleiner Perkins Caufield & Byers and Institutional Venture Partners, raising more than $1 million for charitable causes,and being named one of "America’s Most Promising Companies" by Forbes magazine and "Best of the Best 2012: Vacation Homes" by Robb Report.
Despite generally strong membership sales across the industry in the summer of 2006, Tanner & Haley Resorts entered Chapter 11 bankruptcy proceedings. As a group, members of that club lost more than $200 million in the bankruptcy. However, the real estate and members of Tanner and Haley were acquired by another destination club, Ultimate Resort. May 2008 Ultimate Resorts and Private Escapes merged to form Ultimate Escape. Ultimately, this led to the creation of several entities focused on consumer protection. The Destination Club Association was created to help govern the industry by the leading clubs and supported financial transparency by clubs and an increase in truth in advertising. Halogen Guides and SherpaReport serve as media outlets focusing on destination club coverage. The Veras Group serves as a third-party advisory firm.
Well-managed destination clubs remain an attractive vacation option for affluent families, and companies within the space have continued to adapt and grow. It is also important to consider how the recent recession has affected customer attitudes related to luxury products and vacation experiences.
Read more about this topic: Destination Club
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