01 May Letter From CEO: Why The Waitlist?
Equity Estates has initiated a waitlist for new investors in Fund IV. If you’ve been following our growth this year, it should come as no surprise. A waitlist program is evidence of how carefully we acquire residences and target the best availability for shared ownership of luxury vacation homes. Our fifteen-year history of continuous improvement separates us from the competition, regardless of how well backed they are by venture capital whose primary concern is a return on their capital, not yours.
Most people I speak with have a lot of questions about the waitlist. Why are you rolling this out now? How does it work? What does it mean for new investors? Allow me to lay it all out for you.
Why Is This Happening?
Equity Estates cares about making smart buys and ensuring our average occupancy ratio. We target 60% occupancy and 40% vacancy. This has proven to be a successful balance of shared cost and shared use.
We’re finding the best buys – for long term use and appreciation potential – to be homes that require new furnishings and other improvements. Some large, some small. This approach requires an effective strategy, including an awareness of timing of when we release a property to host our investors. Hence the waitlist.
How Does The Waitlist Work?
We’ve chosen to waitlist new investors to help manage residence availability. It’s very straightforward.
- To join the waitlist, new investors make a deposit of 30% of the capital contribution.
- No interest is due on the outstanding balance and a minimum 60-day notice will be provided when the money is needed to close on a home.
- Waitlist investors are assigned a Personal Travel Concierge, given a welcome orientation, and receive access to Voyager, our Investor Reservation Portal.
- Waitlist investors immediately enjoy unlimited last-minute travel to portfolio residences reserved within 21 days of arrival for only $600 per night.
- With each new residence purchased, we’ll release a group of waitlisted investors.
- Once activated, investors may begin reserving their Allotted Nights (typically 15, 30, or 45 nights) as far into the future as they prefer.
Ensuring The Best Flexibility And Availability In The Industry
If you’ve done your homework, you already know there are several business models offering travel to private luxury residences. Companies manage availability in different ways…and it’s a real point of differentiation. Here are the three main ways it’s done:
- Variable pricing
- Fixed dates or rotating schedule format
- The Equity Estates Method
Variable pricing, aka, yield management, is a strategy that allows a company to maximize revenue for limited inventory. Think about your own experience with airline seats or hotel room reservations. Prices are significantly higher for high demand times when you likely want to travel. If done properly, variable pricing can help an operator manage supply and demand to maximize its profits to whatever the market can tolerate. Here’s the rub. Every potential customer (i.e., fellow club member) is an added competitor. Bigger is not always better. These clubs have no need for a waitlist, as the more members competing for nights, the higher the profitability for the operator.
Fixed dates or rotating schedule is synonymous with timeshare or fractional use. This type of calendar program is the definition of timeshare. Customers own or have rights to specific dates, and they may float or rotate over time. This process allows for full utilization for the highest number of owners. The operator’s goal is maximum occupancy for the entire year, leading to maximum profitability on the sale of the fraction or timeshare. Great if you want the same thing every year. Not so great if you are looking for a little variety or flexibility.
The Equity Estates Method focuses on a target occupancy ratio of 60%. We consider an individual home’s calendar being “full” if we have 210 nights of reservations. This means 40% is intentionally left vacant, allowing more flexibility for both those who like to plan ahead and those who don’t. It’s the most generous accessibility we’ve come across. Most importantly, there is no financial incentive to target a higher occupancy ratio. We are more like a cooperative, sharing resources fairly with intentional down time to support reservation flexibility and effective maintenance plans.
Now Is A Still Great Time To Join
The waitlist helps investors plan for a smooth transition from what they may have already on their travel calendar before entering the Equity Estates life.
If you are ready to learn more now, please let us know. And if you are not ready, that’s perfectly fine. We will still be here when it is the right time for you.
Call us at 404.445.8501 or click here to schedule an appointment with one of our Investor Relations Team members.
Until next time, safe travels!
CEO, Equity Estates