Millionaires have tough choices to make

WASHINGTON – One might not necessarily imagine that multimillionaires confront limited options in planning their vacations.

But a company led by America Online co-founder Steve Case is growing rapidly by offering a menu of luxury vacation options as part of a club that requires members to pony up $200,000 or more for access to its $750 million portfolio of vacation properties throughout North America, the Caribbean and Europe.

Exclusive Resorts recently announced it has added its 2,000th member, which makes it by far the largest company in the fledgling destination club industry.

They will also announce a partnership with golfing legend Jack Nicklaus to expand their golf amenities, and a $72 million investment that will allow them to expand their current roster of nearly 300 vacation homes in 35 destinations.

Case, who bought the club in its infancy in 2003 when it had fewer than 50 members, said he knew the idea was a winner from the start. He bought the company over breakfast after an initial presentation.

“I thought it was brilliant. It was one of those why-didn’t-I-think-of-that moments,” Case said.

Here’s how it works: Members pay a one-time upfront free ranging from $195,000 to $395,000, which gets them between 15 and 45 days at any of the club’s destinations, including the Virgin Islands, Costa Rica, Lake Tahoe, the French Alps and Tuscany. They also pay annual dues ranging from $9,500 to $25,000, again depending on how many vacation days they want.

When a member leaves the club, he gets back 80 percent of his membership fee.

While the figures sound steep, Case says it’s affordable compared with buying a vacation home. And the club allows people to vacation in different places every year, rather than being locked into one spot with a vacation home or a timeshare.

And for those who vacation with children or in large groups, the club’s vacation homes offer size and more of a family atmosphere than you get at a hotel suite, Case said.

Jamie Cheng, co-founder of the Helium Report, which provides research and analysis for the wealthy on various products, including destination clubs, said Exclusive Resorts is the industry leader in a rapidly growing niche of the travel sector.

The industry as a whole has perhaps 4,000 or so members, Cheng said, but there are easily a million Americans or more who could afford a membership.

“As people get more comfortable with the idea, and as the clubs do a better job of explaining it, we think there’s a lot of growth potential,” he said.

Case said his own experiences convinced him of the market for such a product. He recalled renting a vacation home in his native Hawaii for his family, including his young children. He was chagrined to find out on arrival that the bedrooms for the young children were essentially isolated from the rest of the house and required you to go outside and down a flight of steps – a poor option for his 5-year-old.