Lighthouse Resort in Point Arena, California, on California’s Mendicino Coast is one of the thousands of properties available to members of Global Exchange Vacation Club.
For today’s travelers, the number of options for vacation accommodations has never been greater. There are traditional hotels, peer-to-peer sharing through apps such Airbnb, timeshare resorts, vacation clubs where members stay at timeshare resorts, and travel clubs that offer an assortment of benefits. It’s easy to see why someone searching for their next vacation might be confused.
Over the past 40 years, developers have come up with innovative product forms to attract and retain owners and members. Some products, such as traditional timeshare ownership, are lifetime products where consumers prepay for their vacations. Others, such as travel clubs, may have a short-term membership that provides discounts off travel costs. Some companies that began as single-site timeshare resorts now offer dozens of their own resorts plus club benefits to enhance their owners’ vacations. Other industry members may even have a product ladder that begins with a travel club and leads to an ownership product.
Here, Resort Trades looks at three industry leaders each with its own approach to sending people on vacation.
One of the largest developers in our industry, Holiday Inn Club Vacations offers a variety of vacation destinations across the United States, including Orlando, Las Vegas, and Myrtle Beach. They offer a points product backed by real estate held in a trust. “We are selling you points for you to spend on travel products,” explains Nick Pestillo, vice president of Global Access. “First, you can use our points at our network of resorts across the U.S. and Mexico, and then there are ancillary travel products beyond just our resort network. So you use them for exchange through either Interval International or RCI, for hotel stays at more than 6,300 IHG properties worldwide, for cruises and even for car rental or airfare through some of our other partners.”
An important advantage of the club product over traditional fixed-week timeshare ownership is that the points are good for two years, so if a member isn’t able to travel one year, they can take an even better vacation the next year without losing any of their points.
Because the points have a specific value in terms of the underlying real estate, their value remains consistent across time, meaning that someone with a certain number of points will always be able to get a three-bedroom unit in high season.
While the flexibility of the points product offers many advantages to members, it’s also a more complicated product to explain to consumers than a traditional fixed-week ownership. “It’s pretty simple if they are using their points within our network of resorts, because they can see exactly what they can access,” Pestillo says. “It opens up more if they exchange. If they own 100,000 points and only use 90,000 for the stay, they can use the leftover 10,000 points toward their airfare. They aren’t losing any points.”
In addition to the travel products mentioned, HICV members, depending on their points level, can access VIP tour events and other curated experiences. An advantage of the company’s VIP Experiences program is that everything is bundled together including the resort stay, the concert tickets, and the many extras HICV provides to make these bucket list-type experiences. “It’s more than the just the tickets,” he says. “If it’s a concert, we will have a special viewing area with cocktails and a meet-and-greet with the band or performer. We really curate the entire experience.”
As members reach certain levels, they may receive comp nights, upgrades and even resort credits. Members at higher levels have access to personalized counselors who get to know members instead of just the call center. “The Club program really allows more flexibility of travel and encourages people to get more points so they can travel either longer or more frequently and have even more benefits,” Pestillo adds.
After RCI created its points program, Rick Sargent founded Global Exchange Vacation Club in 2003 to serve two purposes. “Initially, the club was set up as a multi-location vacation ownership program where members have rights to access vacation accommodations all over the world through the value of RCI points,” he explains. “It now also includes options for cruises and other vacation experiences.”
Members pay an initial membership fee and nominal annual dues that allow them to access luxury accommodations at RCI’s 4200 timeshare resorts around the world. Legally, GEVC is a California not-for-profit homeowners association that holds the real estate in trust for the benefit and use of its members. “The members own the club, and the club owns the real estate,” says Sargent, who remains GEVC’s president. “Unlike traditional timeshares that often provide a deed of ownership to one resort, our vacation club offers our members a choice in customizing the length of vacation time, size of accommodations and when or where they wish to travel each year. By addressing the limitations of traditional timeshares and embracing modern trends and technologies, we can offer a more flexible, valuable, and engaging vacation experience. ”
As is the case with HICV, many GEVC resorts feature top-notch amenities such as swimming pools, fitness centers, on-site dining, and concierge services, something few peer-to-peer vacation rental accommodations do.
The options for cruises, hotel stays and other travel products are heavily discounted. “The prices are far lower than what you can find on the internet,” he says. “It’s less than Expedia or Priceline or any of those companies.”
Global Connections is a resort developer that owns and operates an on-line membership-based travel club that offers various travel benefits to its members. “We have a points system that’s based on contractual rights of usage, rather than owning a physical property or any type of real estate interest,” explains Steven Grecco, corporate director of sales and marketing for the company.
The company’s products include a points product that has an annual membership fee as well as a club product that offers discounted rates to members, and most members purchase through independent distributors. Its Global Discovery Vacations travel club includes travel and leisure benefits such as condominium rentals and cruises, online shopping, and discounts on theme park admissions. GDV’s 200,000+ are served by Global Connections’ call center staff.
Resorts with excess association-owned inventory often turn to Global Connections to purchase that inventory in a bulk sale. “I like to think of it as the Costco model,” Grecco explains. “We make our money off the membership fee and because we are buying inventory in bulk, we can pass those savings along to our members.”
In addition to travel, members can access discounted life insurance, camping trips, yoga classes online shopping malls, and even set up honeymoon registries. “We try to position ourselves as not just a travel club but more of lifestyle club,” Grecco says. “We want our members to use their memberships throughout the year.”
For developers that want to offer a travel club product, perhaps as a drop-down product at the sales table, Global Connections is able to create and whitea product for them. “We like to think that we aren’t competing with timeshare but instead complementing the product,” Grecco says. “Many of our members end up becoming timeshare owners.”
Each type of club has its own advantages and drawbacks for developers and consumers. Of course, the product form a developer choses chooses will have specific legal ramifications that generally are dictated by the laws of the jurisdictions where the developer has its primary offices, where club accommodations are located, or where the product will be offered. Florida, a leader in this area, has specific statutes for timeshare sales and a separate statute for sellers of travel, which includes short-term travel clubs. “In Florida, for example, a travel club is required to offer a 30-day rescission period to buyers if the club is deemed to be offering a vacation certificate,” explains Rob Webb, a partner at BakerHostetler, “which is a trap that is easier to fall into than many people realize. It’s important to retain experienced legal counsel who can guide you through the benefits, risks and ramifications of different legal structures for vacation products.”
Judy Kenninger heads Kenninger Communications and has been covering the vacation real estate industry for two decades.
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