A vacation home by the beach alone doesn't cut it anymore. These days, millionaires and billionaires want estates in England, condos in New York, pied a terres in Paris and chalets in Gstaad--plus the beach house and more.
Thanks to the relatively new phenomenon of private membership clubs, they are getting them--along with staff to run them, and yachts and private jets to take them there.
"Fractional resort real estate has emerged as the fastest growing--and very often most profitable--segment of the resort real estate industry in North America," says Jon Peterson, president of the Washington-based Peterson Economics, a real estate consulting firm.
"And private membership clubs are the fastest-growing segment of the fractional industry."
While not all private membership clubs, also known as resort or destination clubs, offer their members an ownership stake in the clubs' properties, these clubs represent the top tier of luxury vacationing, with members paying a one-time initiation fee of up to $4 million, annual dues of up to $67,500 and sometimes even daily fees of as much as $650, for the use of multi-million dollar castles, condominiums and hotel suites in some of the world's most beautiful, and exclusive, corners.
Sound good to you? Steve Case, billionaire America Online founder and the former chairman of Time Warner, thought so too. He is the chairman of the board of directors and the majority owner of Denver-based Exclusive Resorts, a private membership club founded in 2002. Exclusive Resorts offers its 1,600 members a portfolio of real estate valued at over $750 million, including a chalet in the French Alps and five villas in Little Dix Bay in the British Virgin Islands. Full membership runs $395,000 for a deposit, in addition to membership fees which can reach $30,000 per year.
If that sounds expensive, consider The Yellowstone Club, a private ski and golf community set on 14,000 acres in Big Sky, Mont., which counts Microsoft (nasdaq: MSFT - news - people ) founder Bill Gates as a member. The Yellowstone Club recently announced the launch of Yellowstone Club World Membership, a membership club which will offer access to about ten properties worldwide, including a golf course in St. Andrew's, Scotland, two yachts and two Gulfstream jets. No word on whether Gates is planning to join Yellowstone Club World Membership, which costs $2 million in upgrade fees for existing Yellowstone Club members but starts at $4 million for non-members (although a company spokesman hints it could climb as high as $10 million).
Private membership clubs operate on a variety of financial models. While Yellowstone Club World Membership will not offer fractional ownership or an equity stake of any kind, a major draw for some potential members is the chance to own a stake in the club itself--and possibly make a little money while on vacation. California-based Solstice Homes operates on an equity-sharing model, offering members the upside appreciation of the cost of membership should they choose to exit the club several years down the line.
Money isn't the only thing to be gained from joining a private membership club. Guy Hale, a management consultant from the San Francisco Bay area, joined the golf-specific Markers Golfers' Residence Club in Utah last May and is taking full advantage of his membership. "I do a lot of traveling for business, and a lot of the courses that I play I've combined with business trips. It's like a fantasy for a golfer--we have tournaments, equipment discounts, Bruce Summerhays [a PGA professional on the Markers advisory committee] and other pros holding clinics and lessons." In addition, Hale says he has networked with other members who belong to different private golf clubs, giving him access to a whole new set of private courses. "It blends a second-home concept with a sport I'm passionate about: This is a dream retirement," says Hale.