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Fixed assets remain key component of the ‘vacation club’ product...

but their relevance will reduce.

By Maurizio Bisicky, COO – Anantara Vacation Club

From asset management, to the evolution of club currencies and the emergence of collaborative tech - what's next for the industry?

There are certain trends in consumer behaviour, as well as technology, which will upend the first and most financially successful 'subscription model' ever: the vacation clubs. I’ve tried to capture those in this article. Let me know if you agree or disagree, and everything in between.

Fixed assets will remain a key component of the ‘vacation club’ product, but their relevance will reduce

The trend started long ago, with branded operators offering membership-based access to affiliated hotels. However, in recent years, three distinct lines of new customer engagement have emerged. One is providing ‘experiences’ in the form of entertainment events (concerts and sporting events for example), with groups of members gathering in a single location. Next is the provision of on-site creative entertainment – going above and beyond the range of typical resort activities to actively engage members – somewhere in-between a Club Med and a Disney park experience. Meanwhile, the third trend entails the transition to liquid club currencies that can be exchanged or traded (think air miles or retail loyalty points), opening up a new range of possibilities on which members can spend their points. It’s clear that focus is shifting back to those for whom these clubs were originally built and designed: the members. For as long as the industry has been based purely on resort offerings, consumer-driven product management has moved at a glacial pace. Not anymore. Moving forward, the members and prospect base will become the key focus – not the assets.

This shift poses significant financial challenges to operators. The calculation underpinning vacation ownership, which was predicated on selling the usage of one good (the resort) and the customer using the good, is no longer valid. Usage has taken new forms that require a different kind of financial planning when selling a long-term membership.

Clubs will evolve to become purveyors of exclusive and personalized experiences in and around travel & entertainment

If COVID-19 has shown us anything, it’s that vacation clubs are among the most resilient in the hospitality business – wherever members don’t rely on cross border travel to reach their destinations. Unlike hotels’ loyalty programs, club members are signed up for the long term, and having committed substantial amounts of money, these members are heavily invested. The strength of this relationship has very few equivalents in the business world. Beginning with travel related incidentals, or any other area in which clubs have either the scale or the buying power to significantly reduce the production cost/purchasing price, clubs will offer those services payable with the club currency – resulting in the perception of greater value in the eyes of their members. Once started on this path, clubs can begin to leverage the huge amounts of data collected from customer interactions to create hyper-personalized experiences and a ‘positive feedback loop’ between member and club.

Club currencies will be used to purchase products and services that extend beyond travel

This is the natural evolution of the point above. It doesn’t take a giant leap of imagination to see large(r) clubs acting as ‘buying groups’, able to negotiate deals on behalf of their members, for products and services that extend beyond travel. Financial institutions and retail outlets come to mind. So, what’s in it for the clubs? At the very least, providing customers with greater value, generating new lead sources and opening up additional markets for their product. Some of these deals are already happening in a disjointed, rudimentary and promotion driven form – i.e. ‘As a member of X, you get Y discount for this product’. But as clubs update their platforms, moving away from inventory-centered software and towards collaborative commerce technologies, the infrastructure for such deals to become a permanent (and necessary) feature is growing. A deeper understanding of customers, paired with the availability of technology platforms, will vastly increase cooperation between industries with shared customer demographics.

Club operators will look for the simplest ways to track customer journeys outside their ecosystem

The rise of ‘soft brands’, which are effectively brokers in the realm of hotel and private accommodation, has not been mirrored in the vacation club world. Again, an intimate customer-relationship is the key differentiator. Existing branded platforms already offer a vast selection of inventory to affiliated club members, however, the customer journey taking place ‘outside’ of the club is not accessible to the clubs themselves. This reduces clubs’ ability to receive critical data, implement feedback, formulate location and investment strategies and increase member satisfaction. Operators find themselves asking, “Should I buy inventory in that location where my members keep going?” while members are left wondering, “Why don’t my Platinum benefits apply at this affiliated club?”

Flying blind when your members use travel services outside of the club is not the only challenge. Existing platforms are already offering additional travel-related services. This may antagonize some operators, who might see it, rightly or wrongly, as an attempt to gain their customers’ share of wallet.

Therefore, it’s very likely we will see an increase in direct-exchange deals. Operators want to gain more control on both sides of the customer journey – beginning with the booking process and extending throughout the entire holiday experience. Members have expressed their desire to integrate their membership/status benefits into their travel experiences outside of their original club, and while reciprocal recognition of status and benefits is already on the table, its implementation is not always smooth.

All of the above will open opportunities for existing branded exchange operators to rethink their strategies – after all, they are the incumbents and have a natural advantage. If they don’t embrace the changes already happening, a market will open up for pure B2B markets or exchanges, focused on facilitating the transaction of value and key data between operators from an IT and process perspective, without elbowing themselves into the branded space. Sourcing partnerships that bring more value, data and trust to the table, while internalizing members’ journeys within each club, will be key.


Maurizio Bisicky is COO of Anantara Vacation Club, the leading 5-star vacation ownership business in Southeast Asia. AVC is part of Minor International (BKK: MINT).

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