The first destination club, Private Retreats was created by Rob McGrath in 1998 after a long study of the fractional ownership industry. Convinced that travelers wanted more than one destination and increased flexibility, McGrath implemented elements of the fractional jet model, the country club mentality, and the benefits of shared ownership.
For a fraction of the cost of the down paymnet on one second home, members would have virtually unlimited access to a global portfolio of homes. Members would join by paying a fully refundable membership deposit, annual dues, and a small nightly fee. McGrath had created the groundwork for the destination club model used throughout the industry still today.
The new concept was a success and quickly grew to the point where McGrath began to focus on partnering to bring his club to the next level. In July of 2003, Private Retreats, already at approximately 300 members, signed a branding agreement with luxury adventure giant Abercrombie & Kent, creating Private Retreats by Abercrombie & Kent. Now with an established brand name, the club operated as Abercrombie & Kent Destination Clubs and would eventually create sister clubs in Distinctive Retreats and Legendary Retreats.
Private Retreats' portfolio grew exponentially with new memberships. The collection of $1 million plus residences remained a popular option even with the new club rollouts.
The club's success continued under the new branding, but many of the risks associated with being an early entrant began to catch up with the club. Citing growing competition and the required short-term leases to meet availability, the club was unable to continue making payments to the luxury travel giant and lost the Abercrombie & Kent license. Virtually overnight, the collective three clubs remarketed themselves as Tanner & Haley, named after McGrath's two young children.
Citing increased competition, insufficient annual dues, and the high cost of short-term leases, by 2006, Tanner & Haley was forced into Chapter 11 bankruptcy and 874 members were left without a club.
After the club's Chapter 11 bankruptcy filing, Tanner & Haley's assets were actively persued by several clubs including Ultimate Resort and Ciel. In December of 2006, after a bidding war between the two clubs, a federal bankruptcy judge selected Ultimate Resort's $100 million bid. Approximately 650 members from Tanner & Haley elected to join Ultimate Resort via either a dues only membership or via an option to upgrade to full membership when the acquisition was completed in May of 2007.
In September of 2007, Ultimate Resort and Private Escapes announced a merger between their two clubs to form what would eventually be Ultimate Escapes with the collected Tanner & Haley members still a substantial contigent of the club's member base.
RESIGNATION
Widely known as the world's first destination club, Private Retreats would create many of the staples used across the industry, including the resignation and redemption policies used by many of today's leading clubs.
"We understand life can be unpredictable and schedules or circumstances may change at any time," the club wrote. "Which is why, unlike other destination clubs that offer less than a full refund, our Members may return their membership to the Club at any time for a complete refund of the original amount paid without deductions for transfer fees, registration fees or commissions. Our one-time, fully refundable Membership fee, along with our low annual dues and nominal daily fees, are additional advantages of Tanner & Haley Destination Clubs membership."
Private Retreats would refund resigning members on a three in, one out policy. Members looking to leave would be put on a waiting list, and wfor every three new members that joined the club, the member who had been on the waiting list the longest would be refunded.
In time, the success seen at Private Retreats would lead to the creation of companion clubs Distinctive Retreats, Distinctive Retreats II, and Legendary Retreats. Each of the four clubs would have their own property collection and members and would blend resignation structures.
Distinctive Retreats would follow the same redemption policies used by Private Retreats, but the other two offerings of Tanner & Haley would follow a different model.
"Tanner & Haley Destination Clubs has created a revolutionary financial structure in our two newest Clubs, Legendary Retreats and Distinctive Retreats II, that allow you to 'own' any appreciation of your Club deposit, less a small transfer fee if you should ever choose to leave the Club," the club's literature stated. "This superior financial structure is just another way of honoring our Members and trying to improve their lives in every little way that we can."
Unfortunately, as the world's first destination club, many of their policies proved to be unsustainable, leading to the industry's first major bankruptcy.
According to club documents, the requirement to enter into countless short term leases to adhere to their availability guarantee and low annual dues and nightly fees crippled the club, forcing for a Chapter 11 bankrupcty filing in 2006.
Ultimate Resort would eventually be selected to acquire the struggling club, with nearly 650 members from Tanner & Haley's three clubs electing to join with Ultimate. Going from a strong upstart club to the second largest destination club in the sector, Ultimate Resort would go on to acquire Ventures Equity Vacation Club and Private Escapes, enter into an agreement with Everlands, and absorb members from High Country Club to form their diverse membership base, now known as Ultimate Escapes.