Taking too long? Close loading screen.
Connect with us

Business

Travel Goes Members-Only

Published

on

International travel had been a major part of Paul Brinkman’s life for years. Mr. Brinkman, 47, his wife and their four children spent months meandering through Europe, flew to Puerto Rico after Hurricane Maria with relief supplies, and, this past February went to Kenya and Tanzania. While away from home, the family would frequently stay in Airbnb or Vrbo home rentals, sometimes up to 60 nights per year.

But with the onset of the pandemic, the evaporation of international travel and the increasing importance of health and safety protocols, Mr. Brinkman, chairman of the board of Brinkman Construction, found himself signing up for Exclusive Resorts, a membership-based club that owns about 400 private residences and villas. While Exclusive had been on his radar for years, the value proposition — on-site concierge services, flexible cancellation fees and now, new partnerships with both a private jet operator and a private medical service — was suddenly more appealing. The family now plans to spend Presidents’ Day weekend in February at an Exclusive property in Real del Mar, Mexico.

“You have an ambassador that helps you with anything, like your own private travel agent,” Mr. Brinkman said of Exclusive. “When you rent a house through Airbnb or Vrbo, you’re at the mercy of owners. Many of them are doing a great job, but it’s on you to ask, and to assess, which is a lot more work.”

The ability to take care of things is a part of the promise of membership travel, even if the ask has shifted from an exclusive dinner reservation to an option for medical evacuation. Club benefits often center on easing the burden of planning and uncertainty; now, safety is an essential part of that. Those benefits vary, of course, and are largely tied to the cost, and type, of the club you’re joining. A membership to the international jet-setter’s Soho House grants you access to private clubhouses outfitted with restaurants, work spaces, pools, hotel rooms, and more, around the world — so long as you’re deemed a “like-minded creative soul” and your application is approved. Newer luxury clubs like Manifest Travel offer carefully curated, small-group trips, with private air travel.

These don’t come cheap: For Exclusive, after an $150,000 initiation fee, members must book a minimum of 15 days per year, which at $1,395 per night, translates to an annual cost of at least $20,925. Even the more affordable timeshare model, which brokers in the promise of flexibility, spacious accommodations and familiarity, require an average initiation fee of $20,000.

Privatized travel, in all of its forms, has been booming in a year where much of the industry is grappling for a lifeline. With international travel on hold and the future of flying uncertain, travelers are cashing in on those timeshares, buying into second-home communities boasting exclusive perks and joining luxury travel clubs in unprecedented numbers. This, in part, is because membership models may be particularly suited to pandemic-era travel — Exclusive, for example, swaps in new pillows after each stay — but their proliferation raises an interesting question. Is health and safety only a guarantee for those with an “in” and money to burn?

The splashiest news regarding membership-centric travel came this summer, with the announcement that the Chateau Marmont, the celebrity-favorite in Hollywood, would be transitioning to a members-only hotel.

Before the pandemic, approximately 70 percent of hotel guests were repeat customers and the top 100 guests generated the majority of room revenue, according to a press representative for the Chateau Marmont.

“In all but name, we’re already more of an exclusive membership community than even outright membership-based models,” said the owner André Balazs. “I prefer to think of it as a members’ hotel.”

The new concept centers on members owning a certain portion of the Chateau and additional properties, which may include locations in London, New York, Milan and Paris. Many other details remain unknown. Mr. Balazs said that the shift is still in the planning phases, but shared that a membership fee would likely not be required, and that members might be invited by invitation. The transition is expected to take place sometime next year.

Some questions have been raised regarding the motivations behind the decision. According to the Hollywood Reporter, some believe the shift is meant to break up an attempted employees union; the article also brought up allegations of misconduct and abuse from Mr. Balazs and hotel management. A press representative for the Chateau Marmont dismissed those claims.

News of the Chateau’s shift stands out in a year of constantly shifting travel, but membership-based luxury travel options are nothing new. Exclusive Resorts was founded in 2002, by the brothers Brent and Brad Handler. Both left the company to found Inspirato, another luxury membership-based travel club, in 2011, which instead of owning properties, as Exclusive Resorts does, the company signs long-term leases of private homes and hotels. This, the company says, allows for a wider array of properties, a less pricey membership based on monthly fees and a larger membership base — though still for those with very high net worths. The cheapest membership begins at $600 per month, with a $1,200 initiation fee, and does not include accommodation fees.

Both companies hit a hard pause back in March, refunding members for trips previously planned. Since then, they have seen an almost extraordinary surge of interest when they resumed operations in May and June.

“We shut down our whole portfolio from March 30 to May 15. And in July, we came roaring back,” said Mr. Handler. “We saw our highest occupancy ever — near 90 percent.”

“This past August, we saw the highest level of demand since 2013,” said James Henderson, the current chief executive of Exclusive Resorts. “We signed members in August that have been in our database as prospects 10 years ago and decided now, at this time, they wanted the security and trust that we can offer.”

Examples of rapid, unusual interest abound across the luxury space, including membership clubs that operate based on the more traditional ownership model.

“We are seeing incredible growth,” said Mike Wilcynski, the general manager of Moonlight Basin, a home ownership-based destination community and members club in Big Sky, Mont. “On Dec. 1, 2019, we had 384 members. This December, we’re on track to have around 480.” Purchasing a home site on Moonlight Basin’s property, which generally go for a base of $800 to $1,900 per square foot, allows members access to a private lodge, golf club, social events and a dedicated staff. (Initiation fees for a comprehensive membership cost $100,000, plus annual dues of $13,000.)

Brittanny Havard, the director of marketing of the Alpine Mountain Ranch & Club, also cited, “literally unprecedented sales. We’ve sold out of all our remaining inventory,” she said.

The 1200-acre ranch in Steamboat Springs, Colo., which is similarly based on owning a home on the property, offers various membership tiers which may include everything from intimate events, like a Basque-style, wine-paired dinner centered around a whole roast lamb, to access to the adjacent golf club and a private, slope-side club at Steamboat Springs ski resort. Homes in this community tend to clock in at around $5 million.

“We believe it has to do with the trend of luxury buyers fleeing dense, urban centers, kind of combined with a do-or-die mentality,” Ms. Harvard said. “Covid has taught us, if nothing else, life is short. Instead of waiting to retire in five years, do it now … build your dream home!”

Jason Gamel, president and chief executive of the American Resort Development Association, the timeshare industry’s trade association, noted that while timeshare developers are seeing slightly slower growth from new customers, current owners are spending more thanks to familiarity, available space, and the drivability of many timeshare locations.

“There’s a desire for more space, professional management and cleanliness standards that far exceed the norm,” he said. “Right now, current owners want to buy more: more units, more time, bigger accommodations.”

Wyndham Destinations is one of the world’s largest time-share companies. At its Wyndham Vacation Clubs, which include four different brands, 900,000 owners, 230 Wyndham club resorts and 4,300 affiliated properties, online bookings for Club Wyndham (the flagship of the four brands) were up 18 percent in July, and 80 percent of resorts were seeing longer stays from guests, according to Noah Brodsky, chief brand officer of Wyndham Destinations. Mr. Gamel speculated that, in lieu of bigger, international trips, timeshare members are opting to splurge on travel within their clubs, instead.

Newer membership companies are making health and safety factors a core part of their pitch, if not the entirety of it. Manifest Travel opened its doors in August, centering on high-end, small group trips based out of local chapters in San Francisco, Los Angeles, San Diego, Santa Barbara, Phoenix and Denver. All of the club’s curated itineraries are to nearby, domestic destinations and include travel via private plane (Jeff Potter, the founder, conceived of the idea pre-Covid, but acknowledges that the model is particularly appealing).

Again, safety and security don’t come cheap. A Manifest membership is $2,500 per year, plus individual trip costs, which may range from $5,000 to $7,000.

The ability to pay for membership, and therefore, a kind peace of mind, is and has always been a privilege. But it’s a highly appealing one in uncertain times.

“In the short term, I think this focus on safety has increased the profile of clubs like ourselves,” Mr. Henderson said. “But I don’t necessarily think that this is the only way people are going to travel in the future. We have very specific types of offerings and we’re not looking to change that. Plus, our members also join for a sense of community.”

Follow New York Times Travel on Instagram, Twitter and Facebook. You can also sign up for our Travel Dispatch newsletter: Each week you’ll receive tips on traveling smarter, stories on hot destinations and access to photos from all over the world.

Source

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

The Trump campaign celebrated a growth record that Democrats downplayed.

Published

on

The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

Source

Continue Reading

Business

Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

Published

on

The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

Source

Continue Reading

Business

Ant Challenged Beijing and Prospered. Now It Toes the Line.

Published

on

As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

Source

Continue Reading

Trending