In a continuing sign of the times, destination club Distinctive Holiday Homes has quite a few members on it's resignation list and is making adjustments to it's portfolio of homes.
Like many of the destination clubs, Distinctive has had a large number of resignations, as members are impacted by the continuing slow economy. The challenge for Distinctive is that while the resignations only add up to $600,000, the issue is they represent more than 20% of memberships and under its own rules if more than 20% of the members resign this triggers a "wind down".
Commenting on this wind down situation, Nick Wood, CEO of Distinctive Holiday Homes noted to us "this takes 2 years as per the club rules, the reality is there will be a discussion on how to refund the few people who have resigned sooner, then this technical trigger will disappear. "
Nick continued "we have a rule that applies, and we are following the rules as we have to, however we will need, with consultation of the staying Members, to make a one off amendment to deal with this, as the rest of the Members at this time support the club, and with reduced destinations the club actually can run within its cost base."
In a subsequent note, Nick stated "we are only closing Beaver Creek (at the end of winter), Lady K and Auckland. Noosa (Australia) is still under debate.
We will be keeping: Tuscany, Megeve, Queenstown, Fiji, Lake Tahoe and MY Echo (South France) will be new for this coming summer."
The club had leased a home on Hawaii a year ago, but decided not to renew the lease when it came up for renewal a few months ago. The club indicated that this home was getting only mixed reviews from members, and also the owner of the home had received an offer from a third party to buy it.
Distinctive is the most geographically diverse destination club, with homes all over the world and with its members split roughly 1/3 South Pacific, 1/3 USA and 1/3 Europe. It has always claimed a very high ratio of equity to members' deposits, which was over 11:1 at the last audit, so resigning members should be well placed to receive back their refundable deposit. Although if all the clubs assets are tied up in property, and the club needs cash to refund resigning members, then this is another reason for selling off some homes.
