Clubs Tout Buyers with ‘Affordable Vacationing,’
By Tom Kelly, Syndicated Columnist
BIG BEAR LAKE, Calif. – Can’t get enough of that timeshare? Would you trade a few of your allotted vacation days for the same number of nights at an upscale hotel, complete with a personal chef in your luxurious suite?
Welcome to the concept known as private residence clubs, an attempt to corral the huge number of late baby boomers stung by the rising cost of second homes who still seek the additional comfort and multi-season use not afforded by most timeshare packages.
While timeshare loyalists argue that more time and different seasonal time can easily be purchased or traded for, private residence club officials say the difference between the two leisure offerings goes far beyond obtaining keys for winter skiing and summer sailing.
“You can call a few days ahead, have groceries in the pantry and then instruct the concierge that you will like a chef for a dinner party of 12,” said Cheryl Shipe, general manager at The Club at Big Bear Village, a private residence club in the popular San Bernadino Mountains southeast of Los Angeles. “You really have the amenities of a five-star hotel at all times.”
The club’s developer, Prestige Resort Management, is betting upscale couples with children will buy into the concept instead of spending an average of $346,708 for a second home in the four-season Big Bear Valley. At $164,000 for a three-bedroom unit and $182,000 for a four-bedroom, you receive a 10 percent ownership stake (28 days a year) in one of the 58 dwellings. What about the remaining days? They are offered to members on an “open access” basis at no additional cost.
While private residence clubs are fairly common in Europe, the first official American version opened in 1994 at Deer Valley, Utah. Others have sprouted since in the Rockies, Mexico and Bermuda and are typically located near sandy beaches, popular ski slopes or excellent golf courses. Most of the clubs are members of an international exchange system facilitated through World’s Finest Resorts.
The annual fees aren’t inexpensive-$5,000 for a three-bedroom and $6,200 for a four-bedroom. Housekeeping fees and gratuities are not included. Seasonal reservations are made on a rotating priority system. Owners are not locked in to specific weeks; they can book their time in smaller increments. The flexibility also means they do not necessarily occupy the same unit each time they visit.
The units range in size from 2,045-2,880 square feet and have gourmet kitchens, wide-screen televisions and fireplaces in the master suites. The move toward pushing the luxury envelope is understandable-the older set has shown it clearly wants the glitz, so the effort is not exclusively pointed at forty-somethings.
According to the National Association of Home Builders, one-fourth of home buyers aged 50 and older are paying more for the home of their golden years than for their previous house. In addition, they are healthier and wealthier than their parents were heading into retirement, according to Seniors Research Group, a subsidiary of J. Walter Thompson Worldwide.
The market for second homes and “fractional ownership” will most likely rise for the next decade as consumers seek alternative avenues to the conventional financial markets. In addition, a recent AARP report showed the top 25 percent of the baby boomer group has a median income of $100,000 and a median net worth of $360,000, putting them well ahead at this stage than the previous generation.
Some of that cash will definitely be spent on second homes or different wrinkles, such as timeshares and fractional ownership. But do families really want to return to the same place-for at least 28 days-every year? Granted, some of the resorts like The Club at Big Bear Village are attractive year around with terrific boating, snow skiing, hiking and golf at least some time of the year. However, the average working couple does not receive, or simply can’t take, that much time away from the office even if it’s in the home.
“It’s not for everybody,” Shipe said. “It is an affordable alternative to the family who doesn’t want to own a second by themselves yet wants to come in the summer, winter and at the last minute whenever they feel like it. They also don’t have to worry about the utility bill, leaving a door unlocked or remembering to pour antifreeze down the toilet.”
Tom Kelly, former real estate editor for The Seattle Times, is a syndicated columnist and talk show host. His new book “How Your Second Home Can Be Your Best Investment” will be published by McGraw-Hill in February, 2004.