“The secret of success is making your vocation your vacation.” Steve Greer, CEO and founder, quotes Mark Twain as his inspiration for launching The Lusso Collection, the latest entrant into the destination club industry. A former PricewaterhouseCoopers consultant and COO of Rapala, Greer recently went from fishing lures to fractional luxury, as we announced in a post last week. Today, in the second of an exclusive three-part series on LUSSO, we interview Steve Greer to learn more about the new club. The interview is longer than the typical Helium Report news, but we expect you’ll find the insights interesting. Click here to request more information from The Lusso Collection.

1. When did The Lusso Collection launch?

We sold our first membership towards the end of 2005 and only officially started marketing the Club in June of this year. We have been developing the business for over 2 years and have taken a deliberate step by step approach to get to a certain stage of development prior to our public launch.

2. Why did you choose the stealth approach to start?

While we were developing the business plan and raising the initial financing we saw many new entrants appear on the destination club scene, though not all in our category. In several cases, and we are still surprisingly seeing it today, newcomers to the space seemed to be adopting the “if you come, we will build it” mentality by launching with a web site and very little, if anything, in the way of properties, members or infrastructure.

In an increasingly competitive arena I think the reverse approach, namely “if we will build it, they will come”, has a better chance of success and that has been our philosophy, frankly at the expense of speed to market.

So while we will undoubtedly appear as a new club to many, we are in fact quite well developed in terms of destinations, properties, members and infrastructure.

3. Many destination clubs are founded by real estate professionals. Your background is in operations and finance. Where does LUSSO draw its real estate experience?

Our investor base, from which the core of our Management Board is drawn, includes several prominent real estate professionals from both the commercial and residential arenas. In addition, the Club has an Advisory Board whose purpose is to supplement the Management Board with expert input.

One member of our Advisory Board is Wally Hobson, the founder and president of Hobson Real Estate Advisors, a Pacific Northwest real estate consulting and development advisory firm. For the last ten years, he has specialized in the resort industry, and has become generally regarded as the leading international expert on fractional residence clubs, having worked on more than 100 projects throughout the world advising many of the major participants in the branded private residence club arena including Four Seasons, Rosewood, Auberge, Relais & Chateaux, Club Regent, and St. Regis.

4. The other key area for destination clubs is hospitality experience. Tell us about your team and your hiring philosophy.

I’m a big believer in assembling a team from diverse backgrounds, focusing more on the skills they bring to the table and not necessarily hiring people with “names” on their resume.

Also, since this is still a very new product which is redefining the high-end travel industry to some extent, there is not a huge pool of talent out there with directly relevant experience and the ingrained way of thinking that sometimes accompanies those with extensive hotel experience might not particularly work in this environment.

I don’t like to draw attention to any particular team member since everyone is playing a valuable role regardless of their background, but to directly answer your question we have on our team Veronica Champion – she holds a Masters degree from the Cornell Hotel School and began working with the first Destination Club, Private Retreats (now Tanner & Haley). She was actively involved in developing the Member Services Team, the national Sales Team and strategic analysis.

Ann Wilkinson, also most recently with Tanner & Haley, has 15 years’ experience in the travel, hospitality and vacation property rental industries and most recently was Director of Sales and Asset Acquisition Director for the Concierge Villas arm of Tanner & Haley.

5. Let’s talk about the club itself. You have 35 members so far. What’s your goal?

We aim to sell out the Club at 550 Members with 100 homes. Although it is early days, we are continually thinking of our next moves, some of which will be concurrent with, rather than subsequent to, the sell out of this Club. These may involve other Clubs with a similar geographic focus to this one, similar Clubs but with distinct membership bases and a different primary geographical focus in terms of destinations (for example, more European or Asian focused). A cluster of truly exclusive clubs with some reciprocity between them would seem to be a better proposition for the Members, and that after all is what it is all about – the Members.

6. Exclusive Resorts recently announced their 2000th member and they’re still growing. Why set a member cap for The Lusso Collection?

First of all I would say that, from what I know, I think Exclusive Resorts have done a tremendous job and they clearly provide a product that holds much appeal for a large part of our target audience. We have decided to take a different route in capping our membership. We want to ensure that continued aura of exclusivity, we want to be sure we can deliver personalized service to all of our Members all of the time and we want to be sure that we can select the very best properties for our Members in each destination.

This last point warrants more explanation – a club that aims to be, say, ten times the size that we are targeting is for sure not targeting to be in ten times the number of destinations that we will be in. So inevitably the “mass” club needs to buy more real estate than we do in each destination; and we feel that the our need to buy in fewer quantities (while offering the same or probably better access) enables us to “cherry pick” properties between which our Members will feel indifferent.

7. The deposit is similar to many other luxury destination clubs. What’s special about LUSSO membership?

We pride ourselves on having the most complete array of features in the destination club space. We call it the three A’s – Access, Amenities and Appreciation.

On the Access front, we do not cap annual usage for our individual members and we also have what I think are the most accommodating reservation polices in the industry. Other features we might group under the Access banner are the ability to gift up to two weeks each year to a family member, the ability to transfer your membership once every five years to a family member and the ability to will your membership to a successor.

On the Amenities side, we have gone above and beyond and frankly created more work for ourselves in wishing to deliver the widest range of services for our Members – but that is our reason for being. For example, your annual dues with LUSSO include airport transfers and also the use of a luxury vehicle at most of our U.S. locations.

Finally, our Members have the ability to share in any Appreciation of the Membership Deposit during the period of their Membership (50% of the increase is paid, in addition to a full refund of the original Membership Deposit). We see this as an equitable sharing of the benefits of the Club between the Members and the Club’s investors.

8. What’s the biggest challenge The Lusso Collection faces in the next few years?

As with any business there are controllable and uncontrollable risks. The controllable ones involve ensuring that we maintain our standard of real estate selection and consistently execute on our service delivery promises.

On the uncontrollable side we are no different to any other club. The industry will likely face some form of regulation in the not too distant future – although we welcome this rather than being afraid of it. The fortunes of all the clubs in the category will also contribute to the public’s ongoing perception of the product and we can only keep our own house in order in that regard.

The continued ability to buy real estate in which our use is compliant with all applicable regulations is always in our minds, and we have plans that I cannot currently disclose to maximize our ability in that regard.

9. Helium Report readers are often skeptical of new destination clubs. How do you assure prospective members that LUSSO will be around in ten years?

We have assembled an investor base that is viewing this as a long term proposition and in no way a venture capital-type play that would inflict short term pressures. Our structure also plays into the longer term in that the spoils of belonging to the club in any capacity (investor or member) are shared – there is great alignment of goals. I think our start is indicative of our future – we have planned for the long term and resisted an ill-considered rush to market. We will continue to develop the business in the same way, delivering to our Members today while always planning for the longer term.

10. Thanks, Steve. To wrap up on a more personal note, what’s your favorite home in The Lusso Collection?

That’s maybe the toughest question! The reality is that all of our properties are very special to me. They are also very diverse, from traditional in Kiawah Island to contemporary in La Jolla. My favorite home is always the one we are about to announce next – since that shows our continued growth as a Club and expands the offering to our current Members.

The LUSSO Collection: La Jolla, CA – Residence 1. Courtesy http://www.lussocollection.com.