Private Residence Clubs Offer Five-Star Service & Luxurious Quarters
(Reprinted from Business Week)
Here’s the latest twist in the vacation industry: the swanky time-share. High-end hotel chains such as the Ritz-Carlton and Four Seasons (FS ) are selling fractional ownership in so-called private residence clubs that offer five-star service along with luxurious quarters at such desirable destinations as Aspen, Colo.; Jackson Hole, Wyo.; and New York.
The cost, if you must ask, can be steep. For $80,000, you can buy the right to use a two-bedroom villa by a golf course at a Four Seasons club in Scottsdale, Ariz. Or for $338,000, plus annual fees that can run well into the thousands, you can buy a one-eighth share of a three-bedroom apartment at the 84-unit Phillips Club in Manhattan’s Lincoln Center neighborhood (table). That will give you the ability to use it for an average of six weeks a year, or more if it’s available.
Clearly, these clubs target a different market from conventional time-shares: They’re for people who want the comfort and convenience of a luxurious second home without the hassle of maintaining and staffing one.
Indeed, the operators take pains to add personal touches that make you feel you’re returning to your very own place. They’ll put family photos on the coffee table and stock the unit with your favorite food and wine.
Between visits, they will store your clothes in rolling wardrobes and make sure your duds are freshly laundered and arranged in closets before your arrival. At fishing and ski resorts, they keep equipment and prep it for your return.
Although these upscale vacation homes are much more exclusive than a regular time-share, the way they work is very similar: The owner buys a piece of real estate and receives a deed, which can be sold, transferred, or even willed away.
Depending on your tax status, there could be a mortgage interest deduction as well. As with standard time-shares, the resale market is spotty, so the only reason to buy into one of these clubs is if you want to use it.
Private residence clubs are the fastest-growing segment of the time-share industry. Sales grew 115% in 2000 and 24% in 2001, according to Ragatz Associates, a real estate resort market-research company in Eugene, Ore. The rest of the industry grew 15% in 2000 and 8% in 2001.
As with regular time-shares, there are organizations that enable owners to swap the use of their units. The deluxe tour operator Abercrombie & Kent, for instance, has affiliations with several residence clubs, and for an extra $1,000 a year, you can trade your home for another vacation destination, the use of a private jet or yacht, or even tickets to a marquee sporting event.
Joe Aaron, a 52-year-old hedge fund investor from San Francisco, is sold on the residence-club concept. Frustrated with long check-in lines and elevator waiting times at the Plaza Hotel, his usual haunt in New York City, he bought a piece of Phillips Club unit three years ago. There, the woman at the front desk greets him by name, and his favorite brand of French roast coffee awaits him in his room. Best of all, he doesn’t have to pack; his clothes are stored and readied for him. “The service is impeccable,” says Aaron. It’s as if everybody there works for you.” Time-shares have certainly come a long way.