The Eden Club - You get what you pay for

TRAVEL FEATURE

You get what you pay for!

by Robert Stevens

Eden Rock, St Barts

LUXON-LINE.COM

O

ne of the strongest selling points of fractional ownership properties has long been the flexibility and affordability that it gives owners. However while the opportunity to purchase a fractional ownership property at a single destination is appealing to some, for globetrotting clientele, being tied to a given destination resort can be less than ideal. While several ‘luxury fractional trading programs’ have been created over the years, they have until now been hit and miss. Many that have signed up and tried to use them have found them complicated, hugely frustrating and very rarely do you get what you want.

Historically most independent exchange programs focus on allowing

fractional owners the ability to swap weeks at reciprocal destination clubs, that list and trade private vacation homes. Here in lies the problem. None of them offer you a list of destinations you can go on-line and book. Like a dating agency you have to promote yourself to any attractive “suitor” and hope they are willing to trade weeks with you at the time you want to visit their location. Without the trade you don’t go anywhere. More often than not, owners in destinations where you want to travel just don’t want to give you access, as they have no interest in visiting your property at the times your offering. The whole process and experience of the traditional exchange sites operates like an online dating

service. During registration, users are asked to fill a “detailed profile to describe not only the location and the services of the property, but also the member’s interests and educational background for better member-to-member matching.” The Facebook model certainly applies here - customers are asking to be integrated and want to know more about each other’s interests and backgrounds.

For what reason, no one actually knows. Then people start reaching out to each other chatting, asking millions of questions with lots of talking back and forth. Now, some people may have the endurance and time for this type of activity, but many in the affluent category do not.

TRAVEL FEATURE

Below are just some of the programs currently available to fractional property owners.

ELITE ALLIANCE – JOINING FEE: Typically waived, Annual Dues: $495 to $695, Nightly fees: $195 to $1,499 Elite Alliance was the first club established to facilitate the exchange of luxury residences between members of high-end private residence clubs.

DCP International, one of the early sales companies in private resort clubs, created The Elite Alliance to help their members exchange time with other high quality clubs. The Elite Alliance offers an array of destination choices from the Caribbean to Napa Valley to Italy and since clubs have to be accepted into the Alliance, members by and large know what to expect from each resort. It’s fair to say that there is there is a difference in some of the destinations promoted on their website which are most North America centric and range between fourstar and five star. As with some other trade services, when you do finally find someone who will swap, members are then charged on a per-exchange nightly basis which actually makes it rather expensive. You give away nights in your home which have a value plus pay fees.

Amanyara, Turks and Caicos Islands

LUXON-LINE.COM

THE REGISTRY COLLECTION – JOINING FEE: $250 , Annual Dues: $250, Nightly fees $250 per transaction plus $164 to 199 per night Billed as the largest external fractional property exchange program, boasting over 55,000 properties in more than 100 countries, The Registry Collection claims to offer its more than 15,000 members ‘top-of-the-line’ accommodations at some of the world’s premier destinations. But as you dig deeper you find that The Registry Collection owned by RCI Global Vacation Network, is comprised largely of Wyndham Resorts destinations, and other 4-star brands. Membership is limited to fractional property owners although some of the available properties are high-end timeshares and an exchange fee is charged with each completed transaction.

3RD HOME - JOINING FEE: $2,500, Annual Dues: ZERO, Nightly fees: from $395 to $995 USD per week.

Launched In 2010 by Giles West, 3rd Home premise is built on the belief that if you own a beautiful second home you should not have to rent others when you travel. “Nobody minds having a

second home sitting empty for most of the year when the economy is good and capital appreciation is on the up and up, but when things start to take a bit of a turn, everyone starts to look at what they own through different lenses” said West. “The Sharing Economy has really grown and 3RD HOME is very much a part of this movement as members are able to unlock the grey value in their second homes by trading the downtime with others” he continued.

Whilst their platform is different to Elite or Preferred, the system does have its draw backs. Currently 3rd Home have almost 2,400 properties in 69 countries that members have “access to” by either reserving the weeks that are live on the site, i.e. being offered by other members, or through their “Request a Week” function, where you can advertise for specific weeks in certain destinations.

All properties are given a ‘Key rating’ based on their value, the desirability of the location and “club demand”. Once members have a Key rating, they get that number of Keys for a good week that they give to the club. However, if they give a peak week they get double Keys and if they give a holiday week to the club, they then get triple Keys.

Sound complicated. You’re dead right.

THE EDEN RESIDENCE CLUB – JOINING FEE: $35,000, Annual Dues: $3,250, Nightly fees: $750 for 1-bedroom to $1,150 for 2,3 and 4-bedroom The latest club to cater to owners of luxury fractional interests takes a whole different stance and builds on the personal experiences of its Founder and Chairman Tom Lawrence. “Let me make it quite clear that we are not a luxury fractional trading program”. “Unlike the other three clubs we actually own and operate our own Private Residence Club in St Andrews, Scotland. We can sit at the table with other clubs on a like-for-like basis and cooperation with us does not break their constitution said Lawrence”. We were actually looking for an exchange program for our own members and were pitched on numerous occasions by Elite Alliance and 3rdHome.

But the reality was they just could not give us what we needed. We were able to offer unfettered access to our luxury residences throughout the year, but in return, they just couldn’t reciprocate on a like-for-like basis. So we had to go out and create our own program. First of all we entered in to a partnership with Exclusive Resorts, the world’s largest Destination Club to give our

members access to hundreds of luxury homes in iconic locations on a ‘pay with reservation’ basis. Having witnessed the satisfaction of both sets of members, we set about inviting other luxury Destination Clubs and hundreds of five-star Private Residence Clubs all over the world in ski, beach, city and other lifestyle destinations to do the same. The key for us was having a similar quality of home – i.e. $2.5m to $3.5m residence in a city or $3.5m to $4.5m in beach, ski, golf or other luxury destinations. We don’t do exchanges, keys or other complicated offerings. Just the same set price each night, at over 4,000 properties in 100 locations all over the world. If you’re not of the same standard, you just don’t get in said Lawrence. . We also offer a luxury Concierge Service that interfaces with the concierge in each destination and makes travel seamless and rewarding.

CONCLUSION Although all of the clubs are totally different, its abundantly clear you get what you pay for. If you accept a low success rate that comes with the low cost option, the exchange systems are the right clubs for you. Whilst you’re not pay much for the exchange you’re not getting much for your residence either.

But if you’re looking for an assurance with higher quality, where you have to pay a preferred price off of market rate, then an exchange program won’t work and The Eden Residence Club is your best option. Exchange programs only work if you can find someone to take your residence in part payment. With the ERC model you don’t even have to rent out your unused nights. You can simply to use all of their inventory on a pay as you stay basis. It’s also clear the levels of homes are not the same either, as who’s going to rent their home for $600 a week, if it’s the same standard and they can get $1,150 per night.

While consumers who opt to purchase fractional destination properties love them at first, they often find that after 4 to 6 years they yearn for the ability to visit other places. If you can’t then rent out your unused nights, it soon become rather expensive for what you use. The proliferation of fractional exchange programs does in theory help owners do that. So, if you’re in the market to buy into a private residence club or luxury fractional, or already have, ask if the property has any formal relationship with a trading or exchange system. Once the globetrotting bug sets in, you’ll certainly be glad you did.