Travel Club Membership - An Analysis Of Value

By Philip McCollum

As a travel enthusiast and bargain hunter, when I heard about a luxury travel club membership, I set out to do an investigation. I've always loved working with numbers and performing a cost - benefit analysis on a travel related product is one of my favorite things to do, at least besides actually taking vacations.

In case you haven’t heard about the latest version of the luxury travel club membership, let me quickly give you the details. For a one-time purchase price, members obtain a lifetime membership (100 years and transferable through your will) that offers phenomenal savings at over 5000 worldwide luxury 4 & 5 star resorts. These are largely timeshare properties that are looking to resell the accommodations on behalf of people that won't be using their time. There are some other benefits of membership, but I’ll cover that in my analysis.

I decided to assess the value of the travel club membership to a person like myself, a baby boomer nearing retirement age with kids. By the way, you could possibly relate purchase of the membership to the purchase of a timeshare, with several significant distinctions. You don’t actually purchase any real estate, which is a good thing because it means there are no maintenance fees, no escrow fees at purchase, no property taxes. And since the membership is not assigned to a specific property or specific week of the year, there are no upgrade fees associated with using the membership. That makes my analysis a lot easier.

Let me start with the cost. The travel club lifetime Platinum membership I purchased and am analyzing cost me $2995. There is also a Gold membership available for $1495 with some restricted benefits. When I go on vacation, sometimes it is as a couple, but other times we have a larger group, up to 8 persons. That works out great because the membership can accommodate groups of that size. Whether going as a single, couple, or larger family group, the price for an 8 day, 7 night vacation at 4 & 5 star resorts in beautiful locations is $298-$699.

I like to take two weeks vacations a year. So let me assume four weeks vacations in a two year period for the analysis. Every week in a decent hotel where we like to go, places like Hawaii, Mexico, the Caribbean, and Europe costs $200-$300 per night. I’m going to use the $200 per night figure for this analysis to be conservative.

That means my four weeks of vacation will be 28 nights at $200 per night for a total cost of $5600. Now let’s consider the membership. I’m not even going to consider the fact that I can book in advance and get into the nice places during peak season. I’ll just carry that as an intangible. It has huge value to me, but it’s hard to quantify for everyone. With the membership, my four weeks of vacation will cost $298-$699 per week. I’m going to assume two weeks at $298 and two weeks at $699 for a total cost of $1994. Add to that my membership cost of $2995 and my total is $4989. So after a two year period, my membership, including the one-time purchase price, has already paid for itself and saved me about $600 in the process. Now is where it gets exciting. Let me consider the next two years. That would be another $5600 without the membership. With the membership it’s only $1994. At this point my membership is saving me over $3600 per year! And it keeps on saving year after year.

Now let me tell you my plan for this membership. The initial purchase price was money that I had earmarked for my kids. But they don’t need it right now, so I bought the membership and will pass it along to them in my will. That way they get the benefit of membership for their lifetime as well. In the meantime, whenever I want to go on vacation, or my kids want to go, we always book using the membership. My kids can take their vacations separately and utilize the guest week feature. I don’t think I mentioned that. Guest weeks are a way for me to offer the benefits of my membership to my friends, neighbors, or family members.

The bottom line is that even with the up-front expense of $2995, the benefits of the travel club membership more than offset the cost after only two years of usage. After that, I’m saving thousands of dollars every year.

Phil McCollum562 225-5234

Labels: , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home