With most destination clubs, initiation fees are used to purchase real estate—an important distinction because you know your money is going toward an asset that’s appreciating in value. “Our members want to know that we’re using their capital contribution to buy assets, not lease assets,” Keith says. “If we manage their assets poorly, we wouldn’t be able to refund the money owed back to them. We need to manage their assets efficiently to ensure the company’s long-term success and to pay the full obligation due to members. Leasing does nothing but cause expenses.”
Keith also recommends that members make sure their club is looking out for their best interests. “This is a lot of money we’re talking about,” he says. “Our club has a very transparent reporting requirement. We communicate with members often and regularly. We don’t operate in a vacuum. It’s very important for our members to make sure there’s an alignment between them and the corporation.”
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New Club Models A few new models have debuted in the luxury destination club market. One was introduced by BelleHavens, based in Salt Lake City, which operates as an equity destination club. In this model, members pay $200,000 to join, which is held in escrow. For every 10 members who join, BelleHavens acquires a new property free and clear of debt. Unlike a fractional ownership, members do not own part of the home; rather, they own a fraction of BelleHavens’ holding company. “One of the great benefits of owning a second home is that you have an asset,” says Darin Gilson, founder and CEO of BelleHavens. “Because of the structure of our club, none of the properties are burdened with debt. We don’t have to service debt with the proceeds from annual dues.” For people with golf on the brain during every vacation, The Markers is a private golf club with a luxury destination club component. The club, based in St. George, Utah, allows exclusive access to elite courses throughout the United States. In fact, there are 180 courses in 38 states where members can play for free. Some homes are on a golf course, while others are close to private courses and other resort amenities, so non-golfers can enjoy the vacation as well. The club hosts an annual championship for members, who pay $285,000 and up to join. Members can also rub elbows with The Markers’ players’ council, which features the likes of golf great Billy Casper and Golf Channel commentator Dave Marr. “We’re a golf club first,” says Mitch Brinton, cofounder and managing director of The Markers. “When members arrive, they’re doing what they want to do. We create experiences, and you’re not going to get that at a private club.”
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