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Private clubs for a very wealthy happy few

To flatter the ego and reinforce the sense of belonging to the happy few, there is nothing like a private club. This institution is well developed in the United Kingdom, as per its British origin. Thus, in London, SoHo House – manager of private clubs with bar, restaurant, private projection room, or even spa – expanded its activities by taking over properties to transform them into hotels: two in the English countryside at Chiswick and Babbington and a pied à terre in New York with 23 rooms, soon to be joined by a cousin in Miami with 44 rooms. Double sponsor, entry questionnaire: although one must show credentials to be a member at these properties, the group SoHo House practically looks like a bit poor with its membership fee of 1,500 euros a year. Others are far more financially selective, such as Casa Casuarina, the former 1930 residence of Gianni Versace in Miami, where the right to access the ten suites of this club costs 30,000 euros in addition to annual fees.Hotel groups remain active While these alternatives to classic hotels undoubtedly constitute competition that is gaining a bigger share of the market each day, upon careful examination it is clear that the luxury hotel industry is no stranger to these concepts. They were quick to act when they realized there was potential to reach a good critical size. It is thus that intimate hotels, upscale residences and individual villas began to appear in the portfolios of several groups. So Four Seasons has its village of tents in Thailand and Taj operates two safari lodges. Today, it is rare for a luxury hotel to be built in Bali or any of the other tropical paradises without a significant share of the inventory being dedicated to individual villas with several rooms. In the Asian and American megalopolises, the brands Four Seasons, St Regis, Mandarin, Ritz Carlton have given their residence hotels within its mixed use real estate projects a significant advantage by providing services for their guests. These residences and villas sell easily and attenuate the cost of hotel development. A more recent phenomenon, two players in the luxury sector launched “destination club” formulas: Leading Hotels of the World (LHW) and Banyan Tree. LHW partnered with Quintess to launch The Leading Residences of the World. With an entry fee of 140,000 euros that is reimbursable upon leaving the membership and an annual membership fee LRW gives access to 70 residences at 30 destinations. This year Banyan Tree began to offer its “Banyan Tree Residences” package which gives access to a luxurious villa for sixty days. And if the entire period is not “consumed”, then the package makes it possible to make exchanges with other club members in order to enjoy the group’s other properties. This new competition from more exclusive, more intimate, more sophisticated packages forces more classic hotels to change in order to avoid seeing the most lucrative part of their business taken away from them. The new projects offered by palaces, which are already an integral part of this hyper luxury dimension, make it clear that this reaction is already underway.Exclusive Resorts goes even further and offers its extremely wealthy clients an opportunity to make the world their second home. Founded in 2002 by Steve Case, the former chairman of AOL-TimeWarner, together with a few extremely rich corporate leaders, the company made its goal to offer its clients the most beautiful destinations in the world. Membership selection is discerning as it requires a membership fee of 165,000 to 320,000 euros for stays ranging from 15 to 45 days a year. 80% of this sum is paid back when a membership is given up. In addition to this fee are annual dues of 10,000 to 25,000 euros. In exchange, it guarantees the freedom and the exclusivity of choice from a portfolio of 350 residences in over 40 destinations worldwide, all of which have personnel who cater to every need.Today the real estate value of this very Exclusive “club destination” surpasses one billion dollars (700 million euros). In order to complete its offer, in addition to the private villas and chalets, the group bought units in many very upscale holiday residences, including in hotels such as the Mandarin Oriental in Chicago, the St Regis Fort Lauderdale or the Ritz-Carlton in Grand Cayman which has a private Exclusive Resorts enclave. Other types of relationships with hotel properties include partnerships with luxury properties such as in Florence with the Lungarno Hotels or in Paris where the client may choose between 6 apart ments on the left bank or a suite at the Hotel Raphaël. With now 3,000 members, Exclusive Resorts continue to grow their portfolio and 125 residences are under development.Other highly selective destination clubs such as the The Oyster Circle also show a strong desire for growth, particularly in the centers of major metropolises. But unlike Exclusive Resorts, The Oyster Circle concentrates exclusively on properties such as villas or luxury apartments. This club has equivalent membership fees, but limits access to 400 selected members and their families for 67 private houses around the world.Another formula is available, this time to turn an often significant investment to profit: fractional ownership. Like what is done on yachts or private jets, Hideaways Club offers its members the option to own part of their real estate portfolio. Better than timeshare where the client only buys one or two weeks of vacation, better than a luxury residence, which does not offer the option to travel, this solution makes it possible to enjoy 14 different destinations for the price of a single secondary home. The figure of fourteen is only temporary, however, as the group has set a goal of 30 destinations and 100 properties in the mid term. The minimum entry fee is 275,000 euros, but in general members invest around 1.4 million euros. And it is worth it, first because they may enjoy longer stays throughout the year, but above all because the member can hope for substantial capital gains on the entire portfolio when they sell the certificate. Hideaways Club makes great promises for a return on investment of nearly 10% per year. Travel more to earn more...Hotel groups remain active While these alternatives to classic hotels undoubtedly constitute competition that is gaining a bigger share of the market each day, upon careful examination it is clear that the luxury hotel industry is no stranger to these concepts. They were quick to act when they realized there was potential to reach a good critical size. It is thus that intimate hotels, upscale residences and individual villas began to appear in the portfolios of several groups. So Four Seasons has its village of tents in Thailand and Taj operates two safari lodges. Today, it is rare for a luxury hotel to be built in Bali or any of the other tropical paradises without a significant share of the inventory being dedicated to individual villas with several rooms. In the Asian and American megalopolises, the brands Four Seasons, St Regis, Mandarin, Ritz Carlton have given their residence hotels within its mixed use real estate projects a significant advantage by providing services for their guests. These residences and villas sell easily and attenuate the cost of hotel development. A more recent phenomenon, two players in the luxury sector launched “destination club” formulas: Leading Hotels of the World (LHW) and Banyan Tree. LHW partnered with Quintess to launch The Leading Residences of the World. With an entry fee of 140,000 euros that is reimbursable upon leaving the membership and an annual membership fee LRW gives access to 70 residences at 30 destinations. This year Banyan Tree began to offer its “Banyan Tree Residences” package which gives access to a luxurious villa for sixty days. And if the entire period is not “consumed”, then the package makes it possible to make exchanges with other club members in order to enjoy the group’s other properties. This new competition from more exclusive, more intimate, more sophisticated packages forces more classic hotels to change in order to avoid seeing the most lucrative part of their business taken away from them. The new projects offered by palaces, which are already an integral part of this hyper luxury dimension, make it clear that this reaction is already underway.

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