Helium Report has learned that Tanner & Haley is no longer accepting new members, pending a review of its business. According to current members, Tanner & Haley has issued an email stating:

“the Clubs’ management team believes it is appropriate to pause to reevaluate our business and service models and to take this time to modify current membership offerings…”

The message includes no specifics on plan changes, only an announcement that current members will be contacted later with details. In the meantime, the note says, “Club members may continue to book retreats and travel as provided for in their existing member contracts.” Calls from Helium Report were not returned.

As the first destination club, Tanner & Haley bears an unusually high legacy cost of continuing to service members with contract terms that may have proven inconsistent with the operating realities of the business. These early members probably hold above-market usage terms for below-market costs. Another factor that could be straining their model is an aggressive availability guarantee and 100% refund terms (less 7.5% transfer fee). Both look good for members, but are expensive to offer. The destination club formula is a delicate and elusive combination of operational and financial finesse. We expect even a best-case scenario to include price increases and plan changes for new and existing members. One additional possibility is that the club is seeking outside financing to shore up its balance sheet. We hope for the club, and particularly for its members, that the situation is resolved quickly.

Adjustments to plan terms, pricing, or the capital structure of a club will continue to happen in what is a very young industry, as is common in other emerging industries. Helium Report continues to advise readers that the destination club industry is based on an appealing concept and a viable financial formula. We continue to urge new members to thoroughly review their choice and understand the risks before signing. Our list of Due Diligence questions from our Decision Guide to Destination Clubs is a particularly useful tool in identifying critical terms of a club.

Please check back for additional details. If you have information, please send to news@heliumreport.com.