Cost Breakdown: Equity Estates vs. Vacation Clubs

If you have spent any time looking into vacation clubs, you already know that there are many options available. Some vacation club brands, such as Exclusive Resorts, Inspirato, Hilton, and Marriott, are commonly known within the hospitality and leisure industry, but the proliferation of options also means a proliferation of pricing structures, access rules, and ownership commitments. 

Vacation club prices vary widely, but they do generally follow a common set of principles. Understanding these principles allows you to make meaningful comparisons with alternative models and structures. This guide explores how the typical vacation club structure compares with portfolio ownership, a luxury vacation real estate investment model pioneered by Equity Estates.

Vacation Club Pricing Basics

Typically, luxury vacation clubs structure access to residences and resorts around tiered memberships or points systems. The initial buy-in is then usually supplemented by annual fees.

Upfront Membership Fees

Initial vacation club buy-in fees vary widely, but expect to pay at least a five-figure sum. Upfront fees are often tiered based on access levels or the number of points you purchase. Some clubs, for example, require a minimum points purchase at buy-in, with upfront pricing scaling up depending on how many points above the minimum you choose to purchase.

Points are then redeemed for access to vacation club facilities and residences.

Annual Dues and Assessments

In addition to the initial membership fee, vacation clubs usually levy a recurring annual or monthly fee typically tied to the cost of overall operations, staffing, or property maintenance. These annual or monthly fees will generally be required regardless of how often members travel or use the vacation club residences.

Access and Usage Limitations

Most vacation clubs function more or less as luxury timeshares, with membership affording you a certain amount of access to residences and facilities. Pricing typically connects directly to access structure — the more points you buy or the higher membership tier you purchase, the more flexibility you get in terms of when, where, and how you can make use of the vacation club facilities.

Points System and Availability

Vacation club points are typically used as a form of currency to manage access to facilities. You can book a trip using points, and the number of points required varies based on factors such as demand, facility type, and length of stay. 

For example, a short stay in the smallest residence during an off-peak time might require half the points of a longer stay in a larger residence during the most popular time of year.

Booking Windows and Restrictions

Luxury vacation clubs can further control access to facilities through the use of planning or booking windows. For example, if your vacation club has multiple resorts, you might have a “home” resort, for which you can book trips almost a year in advance. The booking window for other resorts within the club network, however, might only be six months in advance. In this way, vacation clubs can offer prioritized access to “home” resorts for their members.

There may be further restrictions, such as access to certain residences or resorts being limited to higher tiers, or blackout periods that prevent booking at certain destinations at particular times.

How Equity Estates Structures Ownership and Costs

Vacation clubs and private residence clubs are one approach to managing luxury vacation travel. Alternative structures include the portfolio ownership model pioneered by Equity Estates.

This luxury real estate investment firm offers a different model with an ownership interest in a diversified portfolio of luxury vacation homes. Each portfolio typically comprises 10-12 homes, each valued at $3-$7 million. The residences are distributed across a range of destinations, from beach homes to mountain retreats and city and leisure properties.

Your initial capital contribution gives you a partial ownership stake in a portfolio of homes. Expenses relating to the management and maintenance of the properties are billed at cost and split between the fund investors. 

Each fund has a defined exit timeline. Properties are carefully managed to maintain asset quality, protecting value for their eventual liquidation.

Capital Contribution and Portfolio Access

Your capital contribution to an Equity Estates property portfolio simultaneously qualifies you for access to the homes. The portfolio fund holds multiple properties, and you also get access to all other properties held in other Equity Estates funds, as well as any properties with which we have reciprocal arrangements. At present, more than 65 luxury vacation homes around the world are accessible to Equity Estates investors.

This is a different approach to purchasing points or prepaid usage credits. Your capital contribution is an ownership stake in a portfolio of homes with a pre-defined liquidation timeline. You book time in a property based on availability, not the number of points you have. The primary driver of your access to Equity Estates properties is your capital contribution.

Access is not tiered or subject to booking windows or blackout dates. Our proprietary Voyager app gives you full visibility of property availability, manages bookings, and keeps you connected to your account manager and vacation concierge. 

Pass-Through Costs Supporting Asset Quality

There are, of course, ongoing costs associated with the maintenance and upkeep of the properties in your portfolio. Expenses relating to the management and long-term care of the properties are billed at cost and divided between the fund investors. 

There is an ongoing and essential responsibility to maintain the properties in prime condition to protect asset quality and support possible appreciation over the life of the fund. The properties are maintained as vacation homes for investors, but the high maintenance standards also help protect asset value. 

Occupancy rates at each property are intentionally controlled at around 60% to prevent overuse and overbooking. 

Defined Exit by Design

Each fund has a defined exit — typically 10 years after launch. This supports an orderly liquidation at the end of the term. 

The proceeds derived from liquidation are distributed on a prioritized basis. The priority is the return of 100% of each capital contribution to the fund’s participants. Once that condition is satisfied, 80% of any profits are distributed between the fund’s participants, with the balance distributed as performance compensation to the Managing Member. 

Fund participants are welcome to renew their interest in Equity Estates by making a capital contribution to new funds. 

Plan Your Next Stay With Equity Estates

The Equity Estates portfolio ownership model is designed to appeal to individuals and families seeking luxury vacation experiences combined with financial growth opportunities. The model offers structural clarity, an ownership stake in a diversified selection of luxury vacation homes, and a defined exit plan. 

If you’re interested in a luxury vacation experience without booking windows or minimum point requirements, the Equity Estates portfolio ownership model might be for you. Our luxury vacation experiences are centrally coordinated by a dedicated team of Equity Estates employees who coordinate activities and amenities for you at your destination. Each property is supported by a local host and daily housekeeping. The Voyager app enables seamless booking and arrival experiences for our investors. And our properties are carefully selected to support large gatherings and multi-generational travel.

Download our Executive Summary or see property descriptions and client testimonials on our website. 

Travel with Equity Estates for a unique and memorable experience. If you would like more information about investing with Equity Estates, please reach out to our Investor Relations team at 404.445.8501 or click to schedule a call.