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Glossary
Private Residence ClubsDestination Clubs
Condo Hotels
Exotic Car Clubs
Advanced Reservations: times that members can book beyond their confirmed holiday and reserved weeks. The terms vary by club.
Deeded fee-simple ownership: the entire residence is held as an undivided tenant-in-common property by all owners of that home. Each owner may sell their share independently at any time.
Exchange Privileges: some clubs allow members to visit a different resort in the same network.
Floating Units: ownership access is to a pool of identical residences, rather than the single specific unit that members own.
Fractional Share: fraction of the home that the member owns, corresponding to an annual allotment of weeks for usage.
Holiday Reservations: with most clubs, members are assured occupancy during the holidays at least every few years, depending on share size, inventory, and owner usage patterns.
Home Owners’ Association Fees: recurring maintenance fee that covers various expenses, including taxes, utilities, insurance, maintenance, supplies, housekeeping services, and concierge services.
Occupancy Fee: a flat fee charged per day in-residence to cover day-to-day costs. For some clubs, these expenses are covered by the HOA fee.
Purchase Agreement: includes detailed explanation of the overall resort and residence. Upon signing this document, buyers bring their payments up to the required down payment, which is now non-refundable.
Purchase Price: the price offered to prospective buyers to purchase a fraction of the property. Prospective buyers can expect to receive the lowest pricing during the earliest phase of a project.
Resale: each owner may sell their share independently at any time.
Reservation Agreement: the first stage of purchasing into a private residence club, when prospective buyers submit a deposit demonstrating their intent to buy. This deposit is generally refundable. The reservation gives them a place in line, but does not necessarily guarantee that a unit will be available.
Rotating Occupancy Schedule: most clubs use a rotating schedule, where the members’ designated week in the peak/holiday period advances each year.
Space-Available Reservations: weeks during the non-peak periods that are available for extra booking by members, often with no annual limit. Space-available time is offered to owners, usually on a first-come, first-served basis.
Advanced Reservations: standard reservations that are booked 60 days to 2 years before the travel date.
Annual Dues: yearly fees that typically include travel planning, concierge, and housekeeping services. Fees range from $8,000 to $50,000.
Asset Value: destination clubs provide an average asset value for their homes. This figure is designed to give prospective members a comparison point against a second home they might purchase.
Days Included: the number of days that members have to the destination club’s homes. Typically, destination clubs offer 2 to 5-week programs.
Deposit Appreciation: some destination clubs offer a refund of the “future value” of the membership deposit, as opposed to a percentage (80% to 100%) of the membership deposit amount that the member paid initially.
Destination Club Association (DCA): an industry trade association that is working with state regulators to define the clubs’ programs as non-investment products and, thus, not subject to complex and restrictive timeshare regulations.
Equity: destination clubs define equity in two ways. Some clubs offer ownership interest to their members, while others have a model that provides appreciation on the membership deposit.
Holiday Reservations: popular destinations become impacted during the holidays.
Reservations are usually determined by a holiday rotation system, which differs at every club.
Holiday Rotation: destination clubs have different ways of rotating their holiday reservations to make it more equitable for members. Typically, members tend to travel on the same six or seven major holidays.
Independent Financial Audit: an independent, third-party audit of a destination club’s financials is recommended to ensure sufficient net assets are available to refund member deposits at any and all times.
Members Cap: some destination clubs state a maximum number of members they plan to sign up.
Member-to-home ratio: the ratio helps to compare availability between destination clubs. The more members per home, presumably the more competition between members for the home during peak seasons.
Membership Deposit: initial cost of joining a destination club. Fees range from $50,000 to $3 million.
Membership Resignation: members who want to resign their membership work directly with the club. Almost every club has a resignation ratio in place that requires two or three new members to join before a member can leave.
Nightly Charge: a fee paid per night of stay. Currently, Private Escapes is the only one that charges a nightly fee, ranging from $82 to $185 a night.
Planned Occupancy Rate: the percentage of the year that homes are occupied by members. A lower occupancy rate will allow members to more easily secure holiday reservations and other desired reservation times.
Refundable Deposit: the portion of the membership deposit that will be returned if you leave the club. The amount ranges from 80% to 100% of your initial fee.
Space Available Reservations: bookings for spontaneous vacations made within a two-month window prior to travel.
Capacity: maximum number of units available in a hotel
Capital expenditures reserve: portion of condo revenue, often 5%, held by
management to replace or upgrade unit furnishings
Departure fees: fees charged upon exit during owner stays
Developer: the company which owns and oversees the building or development of a real estate project
Franchise fees: fees paid to hotel operator for use of their brand, typically 10-12% of gross rental income
Insurance minimum: required insurance coverage amount for condo unit owners
Maid fees: incidental fees charged for maid services during owner stays
Maintenance fees: generally based on size of unit, charges for the service and upkeep of the building and grounds
Management company: hotel operator who manages the condo hotel facilities and rental program; generally a luxury hotel brand
Management fees: varies depending on developer and project
Mixed-use development: project with some combination of residential, retail, office or other commercial use
NACHO: National Association of Condo Hotel Owners; non-profit organization of industry participants (individual owners, developers, management companies, agents,
etc.) with the goal of developing the condo hotel segment through education, transparency and best practices
Occupancy rate: percentage of units that are rented
On-site storage or owner’s closet: space at some condo hotels where owners can leave some items before or after owner stays
Operating fees: hotel operations costs which are sometimes shared with condo owners including marketing costs, travel agent commissions, credit card commissions
Reservation requirement: amount of prior notification required by hotel management company before an owner has guaranteed availability of his/her condo hotel unit
Reservation rotation: process by which available condo hotel units are rented out to hotel guests
Exotic Car Clubs
Car Share Club – generic term for any club where membership enables members to use cars.
Sign-Out Period – the amount of time a member can use a car per usage, usually measured in days. Minimum sign-out periods range from 1-7 days, while maximum sign-out periods range from 1-2 weeks (depending on the club and plan).
Member-to-Car Ratio – the number of members per car. Understand how a club uses this ratio, as this ratio does not tell you much about how available cars will be. Some clubs have large percentage of inactive or less active members, whereas other clubs have a higher percentage of active or very active members. A better ratio to use is the availability ratio.
Reservation Rate – the percentage of time that a member can reserve his or her first-choice car. Some clubs do not track this rate.
Pay-per-Use – members pay each time they use cars, as opposed to using pre-paid points or days to use cars. Clubs usually have a minimum sign-out period (e.g. 3-day minimum).
Points-per-Use – members use pre-paid points for each use.
Fractional Ownership – members own rights to usage and, in some cases, equity in cars as well. Note: Most “fractional ownership” clubs do not offer equity in cars.
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