Tanner & Haley

By July of 2003, Private Retreats had CEO and Founder Rob McGrath had already established themselves as one of the premiere clubs in the young destination club industry and looked to expand their reach by partnering with an established name in the luxury travel arena. Already with over 300 members, McGrath and Private Retreats announced a branding agreement with Abercrombie & Kent, one of the luxury travel sector's largest organizations since their launch in 1962. Under the new branding, the club was known as Abercrombie & Kent Destination Clubs.

Launched in 1998, Private Retreats created a new model in the luxury travel industry. Several years earlier, McGrath and two partners purchased the 29-unit Franz Klammer Lodge in Telluride, Colorado for $28 million. The group began selling tenth-share interests in each unit and managed to take in $29 million in the first year. After another similar venture in Jackson Hole, Wyoming, McGrath sold his interests and looked to evolve the shared ownership model, convinced that travelers wanted more travel options and increased availability. McGrath's vision took components of the country club market, fractional jet model, and shared ownership and the foundations of the destination club model were in place. Members were promised guaranteed reservations, low annual dues, full refundability of their membership deposit, and a fraction of the cost of second home ownership.

While the club was successful under the Private Retreats namesake, the Abercrombie & Kent branding and auxiliary travel benefits that members were afforded within A&K allowed the club to reach even higher heights. Unfortunately, many of the risks associated with being an early entrant began to catch up with the club.

Just months prior to the Abercrombie & Kent branding agreement, Steve Case became an investor and owner at Exclusive Resorts, helping them to establish a dominant market position while young clubs such as Private Escapes, Quintess, and Dream Catcher Retreats were beginning to make their own headway in the industry. Due to a "member focus" model that guaranteed reservations, the club also was forced to make numerous short-term leases to sustain availability. With sales slowing and costs building, the club missed multiple payments to Abercrombie & Kent and lost the licensing and the brand identity they had established over the years. The club quickly rebranded as Tanner & Haley Destination Clubs, naming the new venture after McGrath's two young children.

"We have reached a natural conclusion to this partnership with the sellout of our first two clubs," said McGrath, referring to Private Retreats and spinoff Distinctive Retreats. "The two clubs will continue to operate as they have in the past with no changes. Having just launched Legendary Retreats, a Tanner & Haley Destination Club, we are now focused on expanding the Tanner & Haley brand and its unique identity."

Tanner & Haley was never able to truly recover from their first mover flaws and by 2006, the club filed for Chapter 11 bankruptcy. After the 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 of Tanner & Haley's 874 members elected to join Ultimate Resort via either a dues only membership or through 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.

MEMBERSHIP PLANS

Tanner & Haley Destination Clubs was the master brand for the collected Private Retreats, Distinctive Retreats, and Legendary Retreats.

Either the first or second largest destination club at all points during their tenure within the destination club sector, Tanner & Haley wasn't officially created until August of 2005.

In July of 2003, club Founder and Chief Executive Officer Rob McGrath would enter into a licensing agreement with the established travel company Abecrombie & Kent to form the master brand Abercrombie & Kent Destination Clubs.

"Our new name creates a distinct presence in this growing industry evolving from the private club, travel and fractional ownership sectors," said McGrath. "With the positive response to our first club, Private Retreats by Abercrombie & Kent, and the initiation of our second club, Distinctive Retreats by Abercrombie & Kent, Abercrombie & Kent Destination Clubs looks to further strengthen its leading position and continue to provide exceptional service to our Members."

The two clubs would continue to see positive gains with Distinctive Retreats even needing a spin-off Distinctive Retreats II to meet demand.

Just as the ultra-luxury club Legendary Retreats was launching, Abercrombie & Kent would pull their license from the club, forcing the three collected clubs to rebrand under the Tanner & Haley Destination Clubs name.

Each of the three clubs had their own base of members and members but shared the same membership plans.

Members could choose between the Individual Membership Plan that gave members unlimited annual access to their club's properties or a Corporate Membership Plan that offered between 40 and 42 nights of annual usage.

If you would like to learn more about the respective club's membership plans, please visit our individual club pages below.

• Private Retreats Membership Plans
• Distinctive Retreats Membership Plans
• Legendary Retreats Membership Plans

Less than a year after their brand transition, Tanner & Haley filed for bankruptcy. The combined club totaled 874 members and the destination club industry was shaken with the collapse of the industry pioneer.

Ultimate Resort would acquire the assets of the club and a large portion of the members continue to travel with the club as it is known now, Ultimate Escapes.

MEMBERSHIP PRICING

Within the Tanner & Haley Destination Clubs umbrella, three different destination clubs existed, each with their own properties, members, and pricing.

Private Retreats was the world's first destination club. Created in 1998, the first member joined in September of 1999 and before all was said and done, would reach 349 total members.

Following the success of Private Retreats, the companion club Distinctive Retreats was introduced and proved to be the most successful of the three clubs, requiring the creation of a Distinctive Retreats II to meet demand. The two Distinctive Retreats would amass 510 total members.

When the clubs were losing the Abercrombie & Kent brand that they had used for over two years, Legendary Retreats was being launched. Now under the Tanner & Haley brand, Legendary Retreats would serve as the club's ultra-luxury offering, providing members access to a collection of $7 million properties.

If you would like to learn more about the pricing structure of these three clubs, please access the links below.

• Private Retreats Membership Pricing
• Distinctive Retreats Membership Pricing
• Legendary Retreats Membership Pricing

Less than a year following the change in name, Tanner & Haley filed for bankruptcy. One of the reasons the club cited for the bankruptcy was low up-front membership fees that members locked in early in the club's history. While this contributed to the club's downfall, one of the more chief reasons for the bankruptcy was need for the countless short-term leases to accommodate members. A guarantee provision in the club's documents required the club to provide members access to a comparable property if their own properties were already in use by other club members.

Tanner & Haley would eventually be acquired by Ultimate Resort, making them the second largest club in the destination club sector.

Ultimate Resort and Private Escapes would announce a merger in September of 2007 that would eventually create Ultimate Escapes, where members of Ultimate Resort, Private Escapes, Tanner & Haley, High Country Club, Everlands, and Ventures Equity Vacation Club all make up a portion of the second largest club in the industry.

ANNUAL DUES

Known primarily for creating the destination club concept and for the industry's largest bankruptcy, Tanner & Haley consisted of three distinct clubs: Private Retreats, Distinctive Retreats, and Legendary Retreats.

Selling their first membership in September of 1999, Private Retreats is widely considered the first true destination club. The companion club Distinctive Retreats would launch late in 2003, affording members even more expensive vacation properties to access on an unlimited annual basis.

In February of 2004, the collected Private Retreats and Distinctive Retreats would introduce their new "master brand" Abercrombie & Kent Destination Clubs.

"Our new name creates a distinct presence in this growing industry evolving from the private club, travel and fractional ownership sectors," said CEO and Founder Rob McGrath. "With the positive response to our first club, Private Retreats by Abercrombie & Kent, and the initiation of our second club, Distinctive Retreats by Abercrombie & Kent, Abercrombie & Kent Destination Clubs looks to further strengthen its leading position and continue to provide exceptional service to our Members."

Despite licensing their valuable A&K name to the club, who had posted a 362% increase in new sales, Abercrombie & Kent would have no say in the day to day operations of the club.

"Abercrombie & Kent Destination Clubs will continue to surmount the challenges of other industries, as it did with its destination club concept and Proprietary Capacity Model, with more offerings that better match consumer expectations and needs, and guarantee a Member’s accommodation request 365 days a year,” added McGrath.

Now with the A&K brand and the benefit of letting members travel within the Abercrombie & Kent catalogue, McGrath and his club's continued to enjoy a great deal of success until late in 2005.

In August of that year, McGrath and Abercrombie & Kent would discontinue their licensing agreement. The clubs had missed repeated payments to Abercrombie & Kent, leading to the conclusion of alliance. Geoffrey Kent of A&K would say "Our long term business strategy now requires that we maintain full control over our valuable brand name." McGrath and the three clubs, with the recent introduction of Legendary Retreats, would quickly rebrand themselves under the new Tanner & Haley Destination Club brand.

Despite the club's early successes, low annual dues and nightly fees and a guaranteed access provision in the club's documents that required the club to enter into numerous short term leases to meet availability needs would quickly erode the club's strength.

Within a year of their change in brand, Tanner & Haley filed for bankruptcy.

Ultimate Resort would eventually win the rights to acquire the club's assets, with approximately 650 members joining the club, now known as Ultimate Escapes following a merger with Private Escapes.

As Tanner & Haley acted as the master brand of the three respective clubs, it had no annual dues per se. If you would like to learn more about the annual dues for the clubs under Tanner & Haley, please visit the pages below.

• Private Retreats Annual Dues
• Distinctive Retreats Annual Dues
• Legendary Retreats Annual Dues

PROPERTIES

All part of the Tanner & Haley Destination Clubs master brand, Private Retreats, Distinctive Retreats, and Legendary Retreats all had their own property portfolios.

Despite a great deal of success early in their history, Tanner & Haley would eventually file for bankruptcy in 2006. Citing increased competition in the destination club industry, insufficient membership prices, annual dues, and nightly fees, one of the chief problems with the club's model was a reliance on short term leases to meet availability needs. "For instance, they have rarely refused a member's travel request," said Chief Restructuring Officer Holly Felder Etlin. "If a desired property in their portfolio was unavailable, they commonly entered into a costly short-term lease with a third party."

These payments quickly eroded the club's early success, leading to the destination club industry's first major black eye. Ultimate Resort would acquire a significant amount of the club's properties and members which continue to both be a part of Ultimate Escapes following the merger of Ultimate Resort and Private Escapes.

Private Retreats

The world's first destination club, Private Retreats offered a collection of luxury vacation homes averaging $1.5 million each. At the time of the club's bankruptcy announcement, Private Retreats quoted 73 properties.

• Cabo San Lucas, Mexico
• Deer Valley/Park City, Utah
• Charleston, South Carolina
• Las Vegas, Nevada
• Cayo Espanto, Belize
• Jackson Hole, Wyoming
• La Quinta, California
• London, England
• Dominican Republic
• Lake Tahoe, California
• Naples, Florida
• Scottsdale, Arizona
• Miami, Florida
• Maui, Hawaii
• Nevis, West Indies
• Palm Beach County, Florida
• Steamboat Springs, Colorado
• New York, New York
• Paris, France
• Stowe, Vermont
• San Diego, California
• Telluride, Colorado
• San Francisco, California
• Vail, Colorado

Distinctive Retreats

Following in the footsteps of Private Retreats, Distinctive Retreats was introduced late in 2003, further enhancing the properties available to members. Residences within the Distinctive Retreats portfolio averaged approximately $3 million each, and according to the club's bankruptcy documents, members had access to 77 properties.

• Aspen, Colorado
• Kiawah, South Carolina
• Las Vegas, Nevada
• Bahamas
• Jackson Hole, Wyoming
• Puerto Vallarta, Mexico
• La Quinta, California
• London, England
• Bermuda
• Park City, Utah
• Miami, Florida
• Newport, Rhode Island
• British Virgin Islands
• Naples, Florida
• Cabo San Lucas, Mexico
• Stowe, Vermont
• Cayo Espanto, Belize
• Sun Valley, Idaho
• Maui, Hawaii
• Rancho Santa Fe, California
• Nevis, West Indies
• Telluride, Colorado
• New York, New York
• Paris, France
• Palm Beach County, Florida
• Whistler, British Columbia
• Scottsdale, Arizona
• San Francisco, California
• Tuscany, Italy

Legendary Retreats

Introduced just as the collected clubs were losing the valuable Abercrombie & Kent brand name, forcing the introduction of Tanner & Haley, Legendary Retreats had little chance to succeed due to the model employed by Private Retreats and Distinctive Retreats. The club published several different figures regarding the average home values within Legendary, ranging between $7 million and $12.3 million. At the time of the club's bankruptcy, the club was quoted to have eight properties within the club, available to just 15 members acquired between their July 2005 introduction and their bankruptcy announcement.

• Maui, Hawaii
• Scottsdale, Arizona
• Cabo San Lucas, Mexico
• Vail, Colorado
• Kiawah, South Carolina
• Telluride, Colorado
• Naples, Florida
• Tuscany, Italy

USAGE

The innovator of the destination club concept, Tanner & Haley managed to grow to nearly 900 members before filing for bankruptcy in 2006.

The club's usage rules were outlined by the "Proprietary Capacity Model" that the club developed. From the club's literature:

"Tanner & Haley strives to achieve a perfect balance between Members and residences through its Proprietary Capacity Model designed to make one residence available for every 5.5 Members."

"Currently, we have 150 homes divided among 35 destinations, an average of 4.5 homes per destination. Under normal demand conditions, this should assure Members have access to a desired destination within the timeframes they request."

"On those few occasions that Member bookings exceed the supply of residences in a given location, the Club's affiliate, Tanner & Haley Villas, provides the Club pre-approved residences for Member use. In most Tanner & Haley destinations, the Company operates its owned and managed assets, giving it a critical mass of residences that allow it to accommodate its Members' requests more efficiently."

"When Tanner & Haley reaches a Member-to-home ratio that exceeds its target of 6:1, the Company purchases additional residences in existing destinations or adds new destinations. In certain destinations, the Club currently owns more residences than are needed for just the existing membership base. Typically, where such a situation exists, new residences are in the construction stage."

Each of the three club's within the Tanner & Haley brand, Private Retreats, Distinctive Retreats, and Legendary Retreats, provided members with unlimited annual travel.

Each of the three club's had their own respective property portfolios, letting members choose their club by the home values they wished to occupy.

As part of this usage structure, members were guaranteed access to properties even if the club residences were in use by other club members. To meet their availability needs, the collected clubs were forced to enter into numerous short-term leases. The funds spent on procuring these properties crippled the club, leading to the first major black eye in the destination club sector.

Tanner & Haley would eventually be acquired by Ultimate Resort for $100 million. At the time of the acquisition, Ultimate Resort had less than 100 members and would move to approximately 750, making them the second largest destination club in the world.

Just months after the finalized acquisition of Tanner & Haley, Ultimate Resort and Private Escapes would announce a merger that would create Ultimate Escapes.

MEMBERS

One of the largest destination clubs in the history of the sector, Tanner & Haley would ultimately count 874 members between their three clubs before filing for bankruptcy in July of 2006.

Private Retreats, the first destination club ever created, sold their first membership in September of 1999 and would eventually grow to 349 total members.

The second club introduced was Distinctive Retreats, launched late in 2003. The most popular choice for members, Distinctive Retreats would reach their 400 member capacity and subsequently introduce Distinctive Retreats II. Between the two, 510 total members joined at the Distinctive Retreats level.

Legendary Retreats would be introduced just as the clubs lost the Abercrombie & Kent brand, creating the new brand Tanner & Haley. The ultra-luxury option was available for over $1 million and reached just 15 total members, nearly all upgrades from the Private Retreats and Distinctive Retreats levels.

Within a year of losing the Abercrombie & Kent brand, Tanner & Haley filed for bankruptcy.

Many clubs looked into acquiring the assets of Tanner & Haley, notably Ultimate Resort and Ciel. The bankruptcy judge Alan H.W. Shiff would choose the Ultimate Resort bid and hundreds of club members would move forward with the club.

Now as a market leader, moving from less than 100 members to approaching 1,000 as a result of the Tanner & Haley acquisition, Ultimate Resort would go on to acquire Ventures Equity Vacation Club to bring in nearly 20 members and make an offer to members of the struggling Everlands Life, but the most notable acquisition outside of Tanner & Haley was the Ultimate Resort acquisition of Private Escapes.

Announced in September of 2007, just months after the completion of the acquisition of Tanner & Haley, Ultimate Resort and Private Escapes would merge their two clubs, the second and third largest clubs in the industry respectfully. The combined club would move forward under the new Ultimate Escapes Destination Clubs brand, with a large number of former Tanner & Haley members still traveling with the club.

RESIGNATION

The master brand for destination clubs Private Retreats, Distinctive Retreats, and Legendary Retreats, Tanner & Haley Destination Clubs included multiple resignation structures between their three clubs.

Private Retreats, the world's first destination club, was created in 1998 and offered members access to a portfolio of $1.5 million residences around the world. Distinctive Retreats would follow, providing members $3 million properties, and the trio would conclude with Legendary Retreats with homes between $7 million and $12.3 million.

Each of the three clubs would have their own property portfolios and members, but would share two different resignation structures.

Private Retreats and Distinctive Retreats would both offer members a 100% redemption if they ever elected to leave the club, subject to a three in, one out redemption model.

"We understand life can be unpredictable and schedules or circumstances may change at any time," the club's literature stated. "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."

Distinctive Retreats would prove so successful that a Distinctive Retreats II would be introduced once the original reached their 400 member capacity. For the new Distinctive Retreats and ultra-luxury Legendary Retreats, a new redemption model was designed.

"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, few had the opportunity to see these resignation policies in action as Tanner & Haley filed for bankruptcy in 2006 with 874 members divided between the three club levels.

Understanding the resignation and redemption structures should be one of the most crucial components of your due diligence evaluation of a destination club you are considering.

EXECUTIVES

Originally known as Abercrombie & Kent Destinations Clubs, Tanner & Haley was created after A&K pulled their valuable brand name when the club failed to pay their licensing fee to the travel giant.

The master brand of Private Retreats, Distinctive Retreats, and Legendary Retreats, Tanner & Haley's executive tree still remains a strong presence today in the destination club sectors. While not all officially with Tanner & Haley, the list of destination club executives that served with Private Retreats, Abercrombie & Kent Destinations Clubs, or Tanner & Haley Destination Clubs is a who's who list of industry players, including:

• Richard Keith Private Escapes Ultimate Escapes
• Mark Cain Parallel Solstice Collection Presnell Sporting Collection
• Mark Cibik Parallel Solstice Collection
• Christine Frost My Global Playground Moncasa Private Club Residences
• Vicki Vorhees Premier Destinations by Anne Sebastian
• Robert Dorsey Everlands

NOTES FROM THE CLUB

Consisting of Private Retreats, Distinctive Retreats, and Legendary Retreats, Tanner & Haley Destination Clubs was created by Rob McGrath and is known as the originator of the destination club concept.

Created in 1998, Private Retreats was the world's first destination club, blending components of country clubs with second home ownership and fractional jet travel to create a shared usage model for luxury travelers. The concept would instantly become a success and Distinctive Retreats would be introduced late in 2003, providing members even more luxurious homes than the original Private Retreats.

Looking to further the club's growth curve, McGrath would reach out to travel giant Abercrombie & Kent to not only provide members access to the A&K catalogue of safaris and expeditions, but also to attach the recognizable brand name to the new destination club concept.

Under the Abercrombie & Kent Destination Clubs brand name, the two clubs would continue to see success, but the impact of an unsustainable business model was beginning to take affect.

As part of the club structure, members were guaranteed access to properties even if the club residence in that area was reserved by another member. To meet their availability needs, the clubs would have to enter into short-term leases, draining funds from the club that would be far better used for operations and payments on the club properties.

Poaring money into these non-appreciating assets, the clubs were unable to make their licensing payments to A&K. In August of 2005, Abercrombie & Kent discontinued their agreement with McGrath and his clubs, just as the new Legendary Retreats was launching.

The three clubs would quickly be rebranded under the Tanner & Haley brand, named after McGrath's two children. "We have reached a natural conclusion to this partnership with the sellout of our first two clubs," said McGrath. "The two clubs will continue to operate as they have in the past with no changes. Having just launched Legendary Retreats, a Tanner & Haley Destination Club, we are now focused on expanding the Tanner & Haley brand and its unique identity."

The structure of the club had already had been fractured, and within a year, Tanner & Haley filed for bankruptcy.

Ultimate Resort and the ultra-luxury Ciel would both make offers for the assets of the clubs, with Ultimate Resort's $100 million selected by the bankruptcy judge.

No longer in operation, there are currently no notes available from the club, but many of the Tanner & Haley members remain with Ultimate Escapes, the fusion of Ultimate Resort and Private Escapes.

PARTNERSHIPS

While many destination clubs look outside of their organization to assist members with car rentals and private jet access, industry pioneer Tanner & Haley looked to capture some of these revenues themselves.

Launched in 1998, Private Retreats was the world's first destination club, combining elements of country clubs, fractional jets, and second home ownership. The club would quickly become a success and Distinctive Retreats would be created, offering even more extravagant properties to club members.

The club would enter into a licensing agreement with travel giant Abercrombie & Kent, allowing the clubs to move forward under the brand name Abercrombie & Kent Destination Clubs.

After using the A&K name for over two years, the license would be discontinued after the clubs failed to make their payments to Abercrombie & Kent. The clubs, now with the ultra-luxury Legendary Retreats, would quickly be rebranded as Tanner & Haley Destination Clubs.

Within a year, Tanner & Haley was bankrupt and 874 members were left without a club prior to being acquired by Ultimate Resort.

Quoted in the club's bankruptcy documents were the failures of many club initiatives outside of their destination club structure. Holly Felder Etlin, the Tanner & Haley Chief Restructuring Officer, outlined many of these programs.

"Ms. Etlin relates that Complete Retreats, et al., also operate an air travel program, whereby they make available their fractional ownerships in airplanes to destination club members, and book ticket commercial air travel for a fee. The program generated approximately $1,400,000 in revenutes in 2005."

"The Company also previously operated a luxury car rental service, a wine sales business, a fine art sales program, and various other luxury service and amenity programs for their destination club members. 'None of these businesses generated any substantial revenues during their periods of operation,' Ms. Etlin reports."

While Tanner & Haley did look to keep many of their business operations in house, the club did have a substantial partnership network prior to their bankruptcy.

Operating more than 3,600 flights per day at the time of their partnership, Tanner & Haley partnered with American Airlines, but no details regarding the partnership were disclosed.

Considered one of the foremost leaders in luxury linens and textiles, Anichini bedding was used at residences throughout the three Tanner & Haley clubs.

Members of any of the three clubs could access private jet services through the club. Tanner & Haley purchased fractional jet hours through Bombardier Skyjet and would allow members the ability to purchase hours as they needed.

For those that didn't travel through American Airlines or Bombardier, a partnership with Delta Airlines was also established by Tanner & Haley. Like the American Airlines partnership, details regarding the specifics of their alliance were not revealed.

Quintessentially had relationships with 250 of the world's finest spas and gyms, but members could also procure tickets to concerts, VIP access to nightclubs, and a list of other preferred benefits.