DESTINATION CLUBS- A GUIDE FOR PROSPECTIVE MEMBERS 2018

DESTINATION CLUBS- A GUIDE FOR PROSPECTIVE MEMBERS 2018 2018 SHERPAREPORT www.sherpareport.com 1

Table of Contents 1. What Are Destination Clubs?... 4 2. Features & Benefits... 5 2.1 Services...... 5 2.1.1 Vacation Planning & Pre-trip Services... 5 2.1.2 During-trip Services... 5 2.1.3 Partnership Services... 6 2.2 The Homes & Residences... 6 2.2.1 Locations... 7 2.2.2 Furnishings and Amenities... 8 2.3 Other Travel Experiences... 9 3. How They Work... 10 3.1 Membership Structure... 10 3.1.1 Rental Clubs... 10 3.1.2 Equity Clubs... 11 3.2 Membership Plans... 11 3.2.1 Prepaid Plans... 12 3.2.2 Points Based Plans... 12 3.2.3 Pay as You Stay Plans... 12 3.2.4 Corporate Plans... 13 3.3 Reservation Types... 14 3.3.1 Days Usage... 14 3.4 Occupancy & Reservations... 14 3.4.1 Occupancy Rate... 15 3.4.2 Making Reservations... 15 3.5 Trial Memberships... 15 3.6 Costs... 15 3.6.1 Cost-per-night Analysis... 16 3.6.2 Initial Membership Fee & Ave Home Value... 17 4. Comparing the Alternatives... 17 4.1 Second Home Ownership... 17 4.2 Luxury Hotel... 19 4.3 Private Residence Clubs/Fractional Ownership... 19 4.4 Villa Rentals... 19 5. Are they Right for You... 21 6. Due Diligence Questions... 21 7. Summary...23 8. Appendix...24 8.1 Glossary... 24 8.2 Snapshots of Leading Clubs... 26 8.3 Assessment Notes... 34 Above: Inspirato, Tuscany, Italy Cover: Equity Estates, Anguilla 2018 SHERPAREPORT www.sherpareport.com 2

Dear Reader, I am pleased to present SherpaReport s comprehensive Guide for Prospective Members of luxury destination clubs. This user-friendly report features information and analysis compiled from numerous sources, including club executives and members, club literature, third-party narratives, and our own examination of how the clubs have evolved over the last few years. This is now the 12th annual edition of the Guide. For discriminating families and corporations, destination clubs are an increasingly popular alternative to second homes, luxury hotels and villa rentals. The clubs report high member satisfaction rates and receive a large number of new members through referrals from other members -- all indicating that members are happy with their joining decision. However they are not right for everyone; for instance, to enjoy the full value of a destination club, you need to travel for at least a couple of weeks a year. Our aim in producing this Guide is to give you the information that will help you make sound decisions about joining a destination club. By reading the report you ll know more about the clubs, how they work, how much they cost, and the key questions to ask prior to joining. The properties offered and prices charged by destination clubs can change over time. Please check www. sherpareport.com for the latest information. SherpaReport is widely recognized as a source for information on luxury decision making. We have been reported and quoted in the Wall Street Journal, New York Times and the Financial Times as well as many other leading publications. If you have any questions or comments concerning SherpaReport or any of the material in this report please e-mail me at guide@sherpareport.com. Nick Copley President, SherpaReport guide@sherpareport.com 2018 SHERPAREPORT www.sherpareport.com 3

1. What Are Destination Clubs? Destination club members have access to a portfolio of multi-bedroom, private, luxury homes around the world, and receive fivestar services for all their vacation travel needs. Membership operates in a similar way to an exclusive country club membership. The clubs provide a comprehensive vacation solution by combining some of the best aspects of five-star hotels, villa rentals, private residence clubs, and second home ownership. Shared Access Members can use a portfolio of upscale vacation homes and residences in prime city, beach-front, slopeside and other leisure locations. These homes, which are often only available to members, can be reserved through flexible booking systems. Multiple Bedroom Residences The fully furnished homes have chef s kitchens, sumptuous bathrooms and the latest in entertainment and communication technology. The sizes of the homes vary between 2,000 and 6,000 square feet although they may be smaller apartments in major cities and have 3, 4, 5 or more bedrooms, providing enough room for vacations with families, relatives, and friends. Members of destination clubs join by paying a one- time membership fee that starts from around $10,000 for rental based clubs to over $500,000 for high tiers at equity clubs. For equity clubs this is an investment in the clubs realestate and money will be repaid when a member resigns. Members also pay annual dues ranging from $1,500 to over $60,000. Affluent Members, Hassle Free Vacations Significant groups that are members of these clubs include: Affluent families who want to enjoy the spaciousness of a vacation home, but do not want the hassle of maintaining a second home. Successful professionals and entrepreneurs who plan to enjoy the personalized services and spacious, luxury accommodations offered by the clubs. Corporations that want to use the homes for incentive programs to reward key clients and employees. Retirees who plan to travel, especially with friends or family. Left: Solstice, St Barth; Right: Inspirato, Beaver Creek, CO 2018 SHERPAREPORT www.sherpareport.com 4

2. Features & Benefits 2.1 Services Destination clubs offer elevated standards of services that are both high-end and hightech, ranging from five-star hotel amenities to personalized tasteful offerings at each of their destinations. These complete services are a key part of the destination club offering; ensuring that members are fully looked after, both before and during their trips and in some cases offering other non-travel related concierge services as well. 2.1.1 Vacation Planning & Pre-trip Services Pre-trip services involve all aspects of vacation planning, coordination and organization. Destination club staff (variously called service managers, escape planners, personal member experience managers, personal travel assistants, member service representatives, etc.) help their members in planning a hassle free vacation and ensure that the process is extremely smooth and efficient. The member services manager helps club members with the following: Determining the most desirable locations i.e., whether it s beach, desert, mountain, city or countryside. Planning the dates and duration of stay. Deciding the number of guests to visit the location, i.e., family, relatives, friends. Finalizing, booking and confirming each mode of transport from the member s home to the destination club residence and back, i.e., including air, rail, or limo tickets, etc. Providing information about the destination and activities that can be undertaken there sports and leisure activities, cultural activities, events and amenities as well as sightseeing. Making reservations, i.e., finding the availability and making bookings in clubs, resorts, restaurants, etc. Ensuring timely confirmations. Helping a member to choose any other preferred services. 2.1.2 During-trip Services During-trip services include all amenities provided to members during their stay. Member services managers work closely with the destination concierge (sometimes called the local host ), who is a local resident of the destination club location, to arrange an itinerary of services and activities. Almost all the clubs provide concierge services. A concierge takes care of the guests, their luggage, and any other local services they need. These can include arrangements for local vehicles, local travel, private chef, food and beverages, reservations for dinner, movies, event tickets, spa times as well as arrangements for tee times, tennis courts, lift tickets and any other activities. Equity Estates, Telluride, CO 2018 SHERPAREPORT www.sherpareport.com 5

One of the most common and popular services is pre-arrival grocery shopping whereby the shelves are stocked with your favorite food and wine before you arrive, and in some cases your favorite fresh cut flowers are waiting for you. All the homes have housekeeping services, which may be weekly or daily depending on the club. Some concierges will meet you at the local airport. Most clubs have arranged memberships in, or preferred access to, resorts, leisure clubs, spas and golf courses located close to their residences. These allow members to enjoy special pricing on local services. They are also given privileges that are normally available only to full-time residents. Other services that the clubs can provide include: Shipping of Luggage: As well as personal air travel, the clubs will also arrange shipping of luggage to and from airports. Insurance: Some clubs will insure members luggage. Wine Services: Some of the clubs have wine experts to assist members in their selections, both for the club and at their primary homes. Personal Chefs: Private chefs can either make special meals or serve every meal. Some clubs offer chef-prepared meals on the day of arrival. Personalized Lessons: Clubs will arrange personalized lessons in golf, skiing or other sports and can arrange tutors for children. 2.1.3 Partnership Services Most destination clubs have partnered with other companies to increase the level of services provided to members. These services cover a wide range of facilities such as jet travel, five star dining, golf tournaments or coaching, financial services, spas, car travel, and health assessments. 2.2 The Homes & Residences Destination clubs offer portfolios of multimillion- dollar properties around the globe. Sometimes the homes have classic architecture and sometimes they have modern architecture; they may have private swimming pools, be on golf courses, may be situated in vibrant cities or nestled in the countryside. The size, style, and locations of the residences are some of the key factors that help people to look for the most suitable destination clubs. Hideaways, Majorca, Spain 2018 SHERPAREPORT www.sherpareport.com 6

2.2.1 Locations Most clubs offer a wide mix of locations both geographically and in terms of beach, city, mountain and leisure locations. Some examples of the most popular locations include: BEACH: Turks & Caicos, Cabo San Lucas, Amelia Island, Hawaii, Florida, Kiawah Island, etc. MOUNTAIN: Aspen, Deer Valley, French Alps, Jackson Hole, Steamboat Springs, Stowe, Vail, etc. METROPOLITAN: London, Paris, New York, Chicago, etc. GOLF & LEISURE: Scottsdale, Napa Valley, La Quinta, Pinehurst, Tuscany, etc. North America, the Caribbean and Europe are the main locations, but there are also clubs with homes in Asia, Africa and Australasia. Rocksure, Breckenridge, CO The distribution of properties across these locations varies from one club to another; therefore as part of your due diligence ensure that the locations suit your travel plans. A list of the locations for some of the leading clubs is provided in section 7.3 at the back of this Guide. For an up-to-date list of club locations visit www.sherpareport.com/ homes. Exclusive Resorts, Paris, France Home values vary from under $1 million to several million dollars depending on the club. This difference in home values is primarily reflected in the size and location of homes (proximity to the beach, the fairway, or ski slopes), rather than in the amenities and furnishings provided. All homes are very well equipped and very nicely furnished. Destination M, Provence, France Inspirato, Punta de Mita, Mexico 2018 SHERPAREPORT www.sherpareport.com 7

2.2.2 Furnishings and Amenities Amenities Provided at the Properties Examples of the types of furnishings and amenities provided include: Gourmet kitchens with professional-grade refrigerators, dishwashers, fine dishes and glassware, high-grade counter top appliances, wine cellars. First-rate electronics, high definition televisions, state-of-the-art home theater systems, extensive selection of movies, digital music channels, i-pods, video game consoles (Xbox). Home office with computer, high-speed internet connection, fax machine, copier, printer. Spa-like bathrooms, luxury brand name bath products, high thread count sheets and linens of the highest quality. Exclusive furnishing, custom-made fabrics, beautiful rugs, digital art systems (where personal digital photos can be displayed). Infinity edge private pools, hot tubs, outdoor kitchens, and fire pits in landscaped gardens with private patios and verandahs. Most clubs have some homes in resort areas and provide access to all the resort facilities including spas, golf, private dining and more. Amenities Spa-like bathrooms Hot tubs Designer decorated bedrooms Custom designed furniture Fireplaces Digital picture frames with personal pictures of members Fine dishes and glassware Professional grade appliances Stocked wine cellars Entertainment Collection of movies and games Game rooms Access to golf courses, skiing, spas, health clubs, etc. Equipment, such as golf accessories, bicycles, tennis racquets, etc. Technology High-speed Internet access High definition TVs Home theater systems Game systems Printers Personal Computer Outdoor Barbecue and wet bars Outdoor kitchen Open-air fire pit Private swimming pools Balconies and patios Hot tubs Landscaped gardens 2018 SHERPAREPORT www.sherpareport.com 8

2.3 Other Travel Experiences Many of the clubs offer their members both special unique travel packages and/or the opportunity to use their membership nights at certain hotel or other residence partners. By providing these additional travel options the clubs can be a single source for all their members vacation travel needs. Examples include: Exclusive Resorts offers Once in a Lifetime trips to such places as the Galapagos Islands, Bhutan in the Himalayas and the Antarctic. The fees vary by trip. Inspirato members can travel on adventures to Patagonia, Africa, the Galapagos, Machu Pichu and more. Several clubs have partnerships with hotels and yachts to give their members a wider selection of locations to visit. For example: G2G Collection members have access to several hotels in major US cities. Inspirato has hotel partnerships throughout the world in cities and resort locations. Ritz-Carlton Destination Club members can use some of their points for stays at some Ritz-Carlton hotels. Several clubs have formed mutual partnerships with other clubs. So the members have access to homes in both of the clubs. For instance: Equity Estates is partnered with the Hideaways Club Destination M is partnered with Rocksure. Equity Residences is partnered with the Elite Alliance for additional locations. Some clubs offer unique travel tours such as African Safaris through their partnerships. Many clubs offer stays through thier partners in four & five-star hotels. 2018 SHERPAREPORT www.sherpareport.com 9

3. How They Work The destination club market has been evolving and the clubs continue to roll out new features and new services. The main features and characteristics that you ll find in the clubs are covered below. 3.1 Membership Structure There are two broad membership structures. In some destination clubs the members are essentially customers and the ownership of the club remains with the investors and founders these are known as rental based or non-equity clubs. In other clubs, members are also owners and have an equity position in the club and/or it s real estate these are referred to as offering equity membership. There is no right or wrong structure for a club to adopt. As a potential member you should consider the membership structure along with the homes, the services, the locations, the costs and all the other characteristics. For most members the principal decision to join a club is a lifestyle decision you want to enjoy the spacious homes and private, carefree vacations. 3.1.1 Rental Clubs In this structure, members have the right to use all the club s properties and services but do not have any share of ownership in the club or in the loss or gain of the property value of the club. Most of the rental based clubs, have a lower fee to join, sometimes much lower, but none of this fee is refundable on resignation. There are two variations on usage plans for these clubs i) a pre-paid annual fee for a set number of nights each year Solstice and Quintess offer these plans or ii) members pay as they use the properties on a discounted rental basis. Examples of clubs in this group include Inspirato, G2G Collection. Members of these clubs regard their membership as buying access to an exclusive portfolio of luxury homes and related services. Most of the memberships are lifetime memberships, but some clubs have introduced a variety of shorter term prepaid memberships for periods from two to ten years. Ownership Structure of Destination Clubs Rental Rental Prepaid Equity Ownership 2018 SHERPAREPORT www.sherpareport.com 10

3.1.2 Equity Clubs 3.2 Membership Plans As well as having access to the club s homes, members of equity clubs own shares in the company, partnership, or trust that owns the club and/or its properties. Members can benefit from an increase in the property value of club homes or may lose if the property prices drop. The equity owners have their investment spread across multiple homes in multiple locations, so are effectively distributing their investment across multiple property markets. Some of these clubs issue shares (registered securities) to their owner members, so that the members are also shareholders in the company that owns the properties essentially the owners are investing in a property company. Clubs with an equity structure like this include Equity Estates, Equity Residences, Luxus Vacation Properties, and Rocksure. Since they are issuing shares, these clubs need to comply with relevant securities laws. In the USA this generally means that members must also be accredited investors (qualified to assess the risks of investment), and have a net worth of more than US$ 1 million, or have earned at least US$ 200,000 in each of the last two years. The US securities laws also make it harder for the clubs to market themselves to potential members, since they can only talk to accredited investors. This has meant that the equity clubs have not grown as fast as some of the other clubs that do not have any marketing restrictions. Other clubs often refer to themselves as equity clubs, but they don t issue registered securities. The club members do have a secure interest over the clubs properties, so that their membership deposits are backed by the clubs real estate. Members also receive a share of any increase or decrease in value if they sell their membership interest. The exact legal structure varies from club to club, but the net effect is very similar. Destination M and Ritz-Carlton Destination Club have adopted this model. Equity Estaes, Anguilla Nearly all clubs have several types or tiers of membership plans. For clubs with prepaid memberships, the main differences between the plans are the number of days of access that they provide and the types of reservations that can be made. Membership plans offered by these clubs can be broadly classified into four categories introductory, standard, premium and corporate. In the past few years clubs have tended to offer a wider array of plans to provide more flexible alternatives to prospective members. Some of the rental based clubs typically offer just one level of plan, since all usage is based on a first come, first served, pay as you use it model. Most of the clubs, and certainly the larger clubs, now allow family members to use plan nights without the primary member being present. This family usage allows siblings, adult children and parents to use the club homes and effectively this means that a family can share a membership. 2018 SHERPAREPORT www.sherpareport.com 11

3.2.1 Prepaid Plans 3.2.2 Points Based Plans For clubs with prepaid plans where a member has a set number of nights each year the membership plans can be broadly classified as: Introductory Plans: These plans have the lowest membership fees and annual dues, and offer the lowest number of days and the most limited reservation types. The number of days of usage is in the range of 7 21, meaning you can stay at club residences for 7 to 21 days a year. Different clubs may have different names for this plan or may just refer to it by the number of days. In some cases, members under these plans may not be given priority holiday reservations and will usually have fewer advance reservations. Standard Plans: The membership fee, annual dues, and the number of days of use and reservation types under this plan are higher than the introductory plan. The number of days usually is in the range of 22 44. Premium Plans: These plans offer the highest levels of usage (usually 40+ days), the most flexible reservation selections, and charge the highest annual dues. Despite the higher fees, the actual cost per night under these plans comes out at the lowest of the 3 individual plan types (See Section 3.6.1 for more on cost per night). The Premium Plans make sense if you know you will be traveling a lot as a member. Premium plans feature: The maximum days of usage at any of their club destinations. The most holiday usage and flexible usage at any time of the year. The longest window for Space Available reservations. For example a Premium Plan may offer space available reservations up to 90 days ahead (whereas a standard plan member could only reserve space available 60 days ahead). These are variations on the prepaid plans. Rather than paying for a set number of nights each year, a member is allocated a set number of points each year. Different homes have different point values that may vary depending on the size of the home and the time of year. So peak holiday times require more points than quieter, non-peak, offseason times. 3.2.3 Pay as You Stay Plans As the name suggests members pay for the nights they reserve, as they book them. Pricing for the nights varies by residence, by location, by time of year. So for example larger homes in prime locations at peak times command the highest nightly rates. Standard plans feature: More Advance and Holiday reservations than Introductory Plans Longer reservation window for Space Available, potentially longer reservation window for Advance and Holiday reservations. Destination M, Hawaii 2018 SHERPAREPORT www.sherpareport.com 12

3.2.4 Corporate Plans Many of the clubs offer Corporate or Group plans. These are designed to have multiple individuals who can make reservations and stay at the club s homes as members. Companies may use these memberships for executives or as incentives for staff, partners or customers. These plans usually allow members the ability to reserve more than one residence on the same day. 3.3 Reservation Types Most clubs let members reserve up to one or two years in advance. For pay as you stay plans, members can simply reserve residences whenever they want to. Equity Residences, Big Island, Hawaii For prepaid plans each membership has certain reservation rights, which are typically broken down into the following types: Advance Reservations: This allows members to plan their vacations well in advance and gives them plenty of time to confirm availability of their relatives or friends. Under this reservation type, a member can typically book a desired residence between 2 months and 2 years in advance depending on the club. The number of advance reservations typically varies from 1 to 5 depending on the membership plan. Peak/Holiday Reservations: Most clubs have a separate category for holiday reservations in order to alot usage at these peak periods. All the clubs apply these reservation types to the obvious peak demand times such as Christmas/New Year, but some clubs have a broader definition of holiday than others. So, as part of your due diligence, it s worth asking which days of the year are covered by the holiday reservation type (Sherpareport. com includes occasional articles listing out the holiday dates for the leading clubs). The number of holiday reservations that you can have open, again, varies depending on the membership plan, with the typical numbers between 0 and 2. The window for making these reservations is normally the same as for advance reservations so, between 2 months and 2 years depending on the club. Holiday reservations may also have limits on the maximum number of days that you can stay during a holiday time. For example an advance reservation may allow up to 14 consecutive days to be reserved, but only 7 consecutive days for a holiday reservation. Some of the clubs charge an extra membership fee for you to buy more peak reservations this is useful if you know you will travel a lot during peak times. Other clubs use a points system with peak periods having a higher point charge. Space Available Reservations: Booking under this type is made on the basis of space available at the desired location. Members typically file for reservations within 0-90 days of departure, although the reservations could be as far as 180 days in advance depending on the club and the membership plan. While the advance booking often has to be for a minimum number of days, the space available option usually offers a lower minimum stay. These types of bookings are very useful for short notice, short duration trips such as weekend getaways, as well as for longer duration vacations. Some clubs count these reservations towards a members number of included days under their plan, other clubs and plans have a separate limit for space available reservations, and other clubs have unlimited usage, with the only limit being the number of open reservations at any one time. 2018 SHERPAREPORT www.sherpareport.com 13

the reservations into various types and giving members a certain number of reservations, or a certain number of reserved days, that they can have open at any one time. This is defined by the types and quantity of membership plans sold. Equity Residences, Longboat Key 3.3.1 Days Usage Depending on their prepaid membership plan, members can enjoy between 7 and 75+ days of usage by booking the reservation types above. Some clubs offer unlimited space available usage and some limit the number of days or the number of reservations of a given type. The key thing is to match the plan you buy to your expected number of days of travel and to make sure that your membership agreement will let you easily upgrade or downgrade between plans. Several clubs let you change your prepaid plan level and days of usage each year, giving you flexibility to suit different travel plans. Some clubs also let you purchase additional days at short notice. Rocksure, Barcelona, Spain 3.4 Occupancy & Reservations The clubs experience the highest demand and therefore the highest occupancy levels during holidays, including Christmas, New Year s week, President s Day, Spring Break/ Easter, Independence Day, Thanksgiving etc. Similarly, in locations such as ski destinations, there is heavy demand in the winter but this drops off significantly in the spring and fall. The occupancy rate refers to the amount of time that a home or all the homes are occupied by members. It is expressed as a percentage. For instance, 40% occupancy means that the homes are occupied 40% of the time and are empty, and available, 60% of the time. As discussed above, the clubs with prepaid plans balance out this demand by splitting The other factor that affects the occupancy percentage is the ratio of members to homes. In simple terms the more members there are per home (that the club has in its portfolio) the greater will be the demand from members on each home in the portfolio, and so the higher the occupancy. As you ll see in the next section, the clubs target an average of 50-75% occupancy across the whole portfolio over a year. Seasonal Impact on the Occupancy Rates of Destination Clubs 2018 SHERPAREPORT www.sherpareport.com 14

3.4.1 Occupancy Rate 3.4.2 Making Reservations 3.5 Trial Memberships Clubs usually have average occupancy rates of 50-75%, which increase to around 80-95% for specific properties during peak seasons. This seasonal variation is shown in the diagram on the prior page. Most of the clubs plan for an average annual occupancy rate around 70%, which means they are occupied 70% of the time and vacant 30% of the time. This appears to allow enough flexibility and vacancy within the reservation system, and for instance means that there is availability for short term space available reservations. The occupancy rate affects the reservation procedure as it is the opposite of space availability. In other words, a lower occupancy rate ensures greater availability of homes for a member to book at their desired locations. A lower occupancy rate can also mean that annual dues are higher to cover these empty periods. As a club grows, it needs to add homes at a fast enough pace to ensure that there is sufficient occupancy across its portfolio. The club must balance the number of members and the type of membership plans, and therefore the potential days of use, against the number of homes, and therefore the total days available. Section 6 of this report includes several questions for you to ask about a club s occupancy rate. The booking process for making reservations in destination clubs is very simple and can be carried out in any of the following ways: By calling your member service representative. By sending an e-mail to your member service representative. By booking online via the club s member website. Members are provided a unique membership identification, with which they can access any information related to reservations, space availability, etc., either online or with their member services representative. The member service representative can also answer any queries about a specific home or location and the amenities and facilities or local actvities. Reservation procedures, space availability, and booking related information are some of the key issues that a member should understand and inquire about in detail before joining any particular club. In particular it s worth walking through the booking process and looking at the space availability prior to joining. Several of the clubs offer trial memberships to enable you to try out the club prior to joining as a full member. It s well worth asking the club if you can try before you buy, since some will arrange this and others won t. 3.6 Costs The clubs offer a variety of membership structures and plans, so comparing them financially takes a bit of thought. You need to consider what you re getting for your money so the homes and their typical value and the services the clubs provide. Then compare this to the initial fees, annual dues and any nightly charges. Inspirato, Vail, CO 2018 SHERPAREPORT www.sherpareport.com 15

3.6.1 Cost-per-night Analysis This cost-per-night calculation enables you to make a financial comparison of the clubs particularly the clubs with large initial membership fees and prepaid annual dues. It also allows you to compare destination clubs with other alternative vacation options. Once you have this calculation, you can easily compare destination clubs with luxury hotels, house or villa rentals. (See Section 4 for a more detailed discussion on alternatives to Destination Clubs.) The analysis calculates the effective amount paid by a member for a night s stay at a destination club. The calculation takes into account the initial membership deposit, annual dues, and any nightly fees that a member pays for a given membership plan. In our model we use a 4% opportunity cost applied to the initial membership fee, since the capital used to pay the initial fee could instead be invested to earn an annual return. For the analysis, we have assumed that the average membership period is 10 years. For clubs that offer a potential increase in the initial fee on resignation, we have not considered any increase as there is no guarantee of such an occurrence (particularly where this is tied to property values). For clubs that use pay as you stay plans, we ve taken the average nightly rates provided by the clubs, for peak periods and non-peak periods, and used these in the model. Obviously the actual rates paid by any given member may vary a lot depending on where and when they stay. An electronic version of this cost-per-night spreadsheet is available at http://www.sherpareport.com/ images/dccostnight.xls With the electronic version you can see the calculation in detail, adjust any of the amounts for recent adjustments by the clubs, or adjust any of the assumptions in the calculation. The online version also includes two alternative methods of calculating the cost per night, including one version with a Net Present Value calculation. Note if you re not financially or mathematically inclined then the details of the calculation may be a bit too in depth. In summary the typical full cost per night varies between $500 and $2,800 depending on the club, membership level and for rental based clubs the properties you use for vacations. Top: Equity Estates, Turks & Caicos Bottom: Destination M, Paradise Valley, AZ 2018 SHERPAREPORT www.sherpareport.com 16

3.6.2 Initial Membership Fee & Average Home Value There are a wide range of initial membership fees depending on the club you join and the membership plan you choose. In the table below, a sample of the clubs are split into two groups based on whether they are rental clubs or equity clubs. The table shows the initial fee, the average home values and the cost per night. Clubs Membership Plans Avg Home Values Cost per Night Membership Fee 4. Comparing the Alternatives There are several alternatives to destination clubs that affluent families can use for their vacations. These traditional alternatives include luxury hotels, villa and house rentals, second home ownership, and more recently condo hotels and luxury fractionals. Quintess Exclusive Resorts Prepaid Prepaid $4m $3m $1,961 $2,549 $20,000+ $125,000+ 4.1 Second Home Ownership RENTAL Solstice Collection Inspirato G2G Collection Rocksure Club Equity Estates Ritz Carlton Prepaid Pay as you go Pay as you go Pay as you go Prepaid Prepaid $5m $3.5m $2.5m $2m $3m $2m $2,183 Varies Varies Varies $1,660 Varies $15,000 $15,000 $15,000 $1,700 $257,500+ $89,000+ As a vacation home owner you can select furnishings, appliances, décor and customize the home to suit your own personal tastes. On the flip side, as the owner you are responsible for all expenses related to maintenance, repairs and operation, including mortgages, taxes, insurance, utilities, cleaning, etc. and also have the hassles of managing and running the property. EQUITY Destination M Equity Residences Luxus Vacation Properties Prepaid Prepaid Prepaid Notes: Exclusive Resorts membership fee is for ten years. Cost per night is based on the analysis discussed in 3.6.1 above. $2m $2.5m $2.5m C$814 $1,055 $1,210 C$147,500+ $157,500+ $165,000+ Owners of second homes tend to have a large amount of capital (both emotional capital and monetary capital) invested in them, so there is often a feeling that vacations should be spent at the second home, rather than traveling to new locations. Sometimes this can even produce a sense of guilt, when second home owners spend their vacations elsewhere, but at the same time 2018 SHERPAREPORT www.sherpareport.com 17

know their vacation home is empty and costing them money. Overall this leads to some levels of inflexibility as owners tend to spend their vacations in the one location (at their second home). Several destination clubs have reported that some members have sold their second (or third or fourth) home upon joining the club in order to fully enjoy the wide flexibility that clubs offer. As a second home owner, you are totally on your own in regards to services, travel planning, etc., whereas the destination club members receive full five-star services for all aspects of their vacations. From a purely financial aspect, the membership deposit to join a destination club is less than the 20% down payment that you would need to buy an equivalent second home. The annual membership dues for a destination club are significantly lower than the annual costs of running and maintaining a comparable home. However, with second home ownership, you do have the potential upside (or downside) of changes in the value of your home, whereas only equity destination clubs offer this potential. The calculation to the right compares the longterm value of being a member of a destination club compared to the value of owning a second home. This is done by calculating the net present value (NPV) of the cash flow for club membership compared to second home ownership. The calculation has two scenarios for second home ownership: Home Values Equal: The first comparison assumes that instead of joining a club a person buys a house of equivalent value to the ones in the club. Down Payment Equal: The second assumes that the club membership fee is equivalent to the 20% down payment on a house purchase. The value of the purchased house would be lower than under the first scenario. The calculation assumes a 10-year ownership or membership period and assumes joining a club with US$ 3m homes with a US$ 325,000 membership plan and annual dues of US $ 27,500, giving you 28 days of use (the equivalent amount of days most people use their second homes). Option When compared to both home ownership scenarios, the destination club membership has a less negative NPV and so is a better value than home ownership. A simple representation of the same is provided in the table below. The full spreadsheet along with the assumptions and calculation details is available at: http://www. sherpareport.com/images/dc2ndhomenpv.xls. Within the electronic spreadsheet you can adjust the assumptions and see how this affects the NPV calculation. Most notably if you assume that house prices will rise at 8% per year over the 10 year period then the NPV of home ownership becomes more favorable. Net Present Value (NPV) Destination Club ($376,587) 2nd Home Ownership - Equivalent Value ($1,246,874) 2nd Home Ownership - Equivalent Down Payment ($676,675) 2018 SHERPAREPORT www.sherpareport.com 18

4.2 Luxury Hotel With a wide variety of locations, luxury hotels can provide a high degree of flexibility in terms of destinations. Guests enjoy consistent five-star services and amenities, such as valet services, concierge service (albeit shared amongst all the hotel guests), restaurants, swimming pools, fitness centers, etc. However, guests may not have complete privacy as they have to share all common areas with other guests in the hotel. Only a few luxury hotels are designed for family travel as they lack appropriate-sized rooms or units. Booking multiple rooms is an option but such an arrangement lacks the spaciousness of a home and also significantly increases the cost. Most hotel rooms are 300-600 sq ft, whereas destination club homes typically provide 2,000-4,000 sq ft of space. 4.3 Private Residence Clubs/ Fractional Ownership These are commonly known as fractionals or PRCs and combine the services offered by luxury hotel chains with some of the amenities of a second home. Fractional owners buy a share of a property (normally between 1/12 and ¼.) This deeded interest in a property means that it can be used for between 4-12 weeks in a year, depending on the size of the member s share. The properties are typically 2-3 bedroom condominium units and so are usually smaller than destination club homes, although some PRCs do offer 4 bedroom properties. They usually offer five-star services to their owners/ members. As owners have a shared interest, they can use the property, but cannot select the interior decoration of the homes. Usage systems vary, with some fractionals offering use for fixed periods. For example, an owner has Christmas week every year, and some offering a floating booking system, where owners must book ahead for their required occupancy weeks. A management company maintains the properties, and also manages the owner reservation process. Several luxury hotel brands, such as Ritz-Carlton, Four Seasons and Fairmont, have developed their own Private Residence Clubs. Many private residence clubs are independently developed and managed. This is a good option for the vacationer that likes to go to the same location time after time. Owners buy a share of one property in one destination, but there may be some opportunities to trade for other destinations either through the management company or through independent exchanges. 4.4 Villa Rentals Renting a home or a villa provides access to a variety of locations, and offers accommodation of a similar size to homes in destination clubs. With this spacious accommodation, family and friends can travel together and enjoy vacations together. One of the biggest drawbacks of using rental homes is the hassle of finding an appropriate home in a particular location. It can take quite a bit of searching to locate the ideal home. As a result, families may rent the same home for several years, simply because they know what they are getting and they don t want to spend the time looking for alternatives. When you do look around for rental homes, you find that there is no consistency in terms of furnishings, amenities, support, etc., and generally, no concierge or service is offered either before or during the trip. The growth of clubs such as Inspirato and G2G Collection has been driven by people wanting the flexibility of rentals, with the consistency and assurance of a club structure. 2018 SHERPAREPORT www.sherpareport.com 19

Overview of Alternatives in the Second Home Market Many Locations 3+ Bedrooms Hassle Free Travel Services Concierge Services Consistency Ownership/Equity Destination Clubs 2nd Home Ownership Luxury Hotel Always Sometimes Never Luxury Fractional Villa Rental Summary If you enjoy vacationing in the same location each year, want to benefit from house price appreciation, and want 100% availability, but do not mind the overhead costs and effort to maintain another property, then a second home may be better for you. If you like one location, enjoy excellent service, have some flexibility on when you travel, and prefer to keep your costs low, then look at luxury fractionals and private residence clubs. Personalized Resort Amenities Initial Cost $10k-$600k+ 20% Deposit None $100k-$1m+ None Annual Cost $5k-$50k Mortgage/Insure/ Maintain/etc $500++/night $5k-$30k $5k++/week If you prefer to travel to various locations, enjoy traveling with your friends and family, enjoy high service levels and have some degree of flexibility or do not mind planning ahead, then a destination club could be the answer. 2018 SHERPAREPORT www.sherpareport.com 20

5. Are they Right for You? 6. Things to Consider By thinking through the questions below about your vacation preferences, you ll be better prepared to decide if a destination club is for you and your family, and to identify the clubs that meet your preferences. Questions to Ask Yourself Does my family like to visit one location or how much do we prefer to visit multiple destinations? When do we take our vacations are they all at holiday times or peak times, are they spread throughout the year? (Helps you in looking at the reservation systems and rules for each club/plan) How much do we typically spend on vacations each year? (If it s under $5,000 per year, then you may want to look at alternative, cheaper options) How many and how long are our usual vacations each year? (This helps you identify the clubs and the membership plans that may fit) Who normally comes on the vacations? Do I want to travel alone, in small groups, with friends and family? (If you normally travel alone, then destination clubs may not be the answer) Which locations do we like to visit, and would we like to visit? (Use the tables in the Appendix to see which clubs have homes in which destinations, or visit www.sherpareport.com/homes/ for the latest information) What level of luxury are we seeking in a vacation option? (This helps you identify the clubs and plans that may fit your needs. Different clubs offer homes with values from under US$ 1m to around $4m.) What level of services are we looking for, what are the minimum services that we want from our vacation/travel arrangements? (Destination clubs offer full service travel options) Before joining a destination club we recommend doing some research to select the club that meets your requirements. All the clubs offer fabulous homes and high levels of service, but there are differences in locations, prices and structure. Use the questions below to guide this research process. All the questions below are not relevant to every club and some questions may not be relevant for you, but overall, if you go through them with the clubs you re really interested in, you ll get a good idea which club is a fit for your vacation plans. Membership & Fees What are the different membership levels and how do they work? How much do you charge as a membership fee for each different membership level? What percentage of the membership fee is refundable? How many members does the club currently have, by membership level? Are there any additional fees for booking any of the properties, (Special properties, special dates such as holidays, etc.)? How is the annual fee planned to increase and what are the limits on this increase? (Normally this is restricted to CPI + some percentage) Are there any other fees or any extra charges? How do I resign from the club? Who can use the membership? Who is it transferable to and under what circumstances? Are there currently any special membership offers? What surveys of members has the club carried out in the last year? What do the surveys show? How was member satisfaction? Which members can I talk to prior to joining? 2018 SHERPAREPORT www.sherpareport.com 21

Destinations & Properties How many homes do you currently offer to members? Can members use any other properties (e.g. are there any reciprocity agreements with other clubs or agreements with hotels, etc.)? How does this reciprocity work? How do you select the destinations? What input do members get to provide on the selection of locations and properties? What is the average size of the homes (square feet, number of bedrooms, baths, etc.)? Can I see pictures and location for all of the homes? Services What are the various pre-trip services that you offer? See section 2.1 for some of the typical services. What information do you provide to members before they arrive at their destination? What types of things can the local concierge help with? Are there any things that the local concierge can t help with? Which local services are included and which are extra? How often do you provide housekeeping services, daily, weekly? If applicable ask, What does the club do to accommodate children, and what services and facilities are provided for children? Are these available at all locations? Reservations How does your reservation mechanism work? What is your planned occupancy rate? (The percent of time that the homes are occupied by members) What was the actual occupancy rate last year and how did it vary over the year? Can I see the reservation system, try it out and check availability? Can members reserve multiple locations at the same time? (This would be important if for instance one wanted to do a father/son golfing trip at the same time as a mother/daughter spa trip.) How far in advance can reservations be made (usually 1 or 2 years)? How many reservations have been made and how many trips to club homes have members made? What is the club s strategy to help facilitate reservations in high demand locations during peak travel times? Club Structure & Financials What is the background of the key management? Who are the members of the board of directors of the club? Does the club have an advisory committee? Who are the members of that committee? Are the members involved in the clubs strategy and decision making? Does the club rent out any of its properties? If you are writing a six figure check to join, it s worth asking the following: Are financial statements available to club members? Can I see both historic and projected financial statements? How often are they available? When will the annual dues alone cover all the operating costs for the club? What sort of assurances do you provide for any membership fee refunds? 2018 SHERPAREPORT www.sherpareport.com 22

7 Summary Six Reasons Not to Join a Club 1. You Travel Alone: If you only travel alone or as a couple, a club probably isn t right for you. The clubs typically offer large spacious vacation homes with 3, 4 or 5 bedrooms great for families or larger groups of friends. 2. You Do All Exotic or Adventure Travel: If all your vacations are either unique adventures or exotic escapades to remote and unusual places, then a club isn t for you. The club homes are nearly all in world-class resorts and major cities including: Aspen, Vail, New York, London, Los Cabos, Bahamas, Maui, Tuscany, etc. Yes, some clubs do provide remote adventure travel, such as Galapagos cruises and African safaris, but they are only supplements to the core vacation homes. 3. You Can t Commit to Regular Vacations: If you re a workaholic and can t stand to be away from the office for too long; or you re a homebody and prefer to just relax in your own four walls, then clubs won t be the answer. Part of being a club member is committing (to yourself and to your family and friends) to take regular vacations and enjoy relaxing time away with friends and family. 4. You Like & Have The Time to Organize & Research: If you like organizing your own trips and don t mind searching for the ideal flights, accommodation, theatre tickets, restaurant bookings, ideas for kids activities etc, then membership may not be for you. The clubs are truly full-service. They will arrange as much or as little as you want and can save you a lot of time and energy. 5. You like One Location If you find yourself frequenting one or maybe two favorite locations, then a destination club probably isn t the ideal vacation option. You ll be better off buying a vacation home or a private residence club. That way you can return time after time, leave belongings and even personalize the home. 6. Price: A typical nights stay at a club residence will work out to be around $1,000. Yes there are clubs where the cost per night is lower, and clubs where the cost per night is much more, but $1,000 is an easy number to have in mind. Seven Reasons to Join a Destination Club 1. Variety: A destination club gives you access to multiple homes in stunning geographical locales across the globe. You can spend time in a tropical paradise in a home at the beach, or you might prefer jetting off to a home set in a winter wonderland with the ski slopes at your door. You get to choose. 2. Service: In a destination club every detail is taken care of so that the member doesn t have to worry. Prior to arrival, the kitchen is stocked with the member s preferred groceries and beverages. Local concierges will arrange for restaurant bookings, tickets and help plan and reserve for any activities. 3. No Worries: Clubs maintain a high level of quality assurance over their homes interiors, upkeep and service. There s no worrying about burst pipes, what it will look like, or what condition will the home be in. Members don t have the same concerns as renters or second home owners. 4. Reconnecting with Family: Joining a club is a way to commit to travel, enjoy quality friends and family time, and make unforgettable memories now before time gets away from you. 5. Lots of Space: Club homes provide plenty of space with lots of room to stretch out, relax and entertain. Even in big cities accommodations include typical floor space of around 1,500 square feet in 2 or 3 bedroom apartments; rural retreats, with more land, may have up to 6,000 square feet. 6. Privacy: Compared to hotels, guests will enjoy much more privacy without the common areas of a typical hotel. Scenic and beach front retreats are typically surrounded by beautifully landscaped gardens that are secluded enough to offer a true sense of privacy. 7. No Guilt: Those who own a second home often feel obligated to spend all of their vacation time there ultimately defeating the purpose of a vacation in the first place: to reduce stress, not add to it. 2018 SHERPAREPORT www.sherpareport.com 23

8 Appendix 8.1 Glossary These are some of the more common terms that you may come across. Advanced Reservation: A type of reservation that allows club members to book a residence in the club s portfolio between 2 months and 2 years prior to the vacation time. The number of advance reservations varies by club and membership plan and ranges from 1 to 4. Similarly the actual reservation window varies by club and membership plan. Some clubs allow members to book up to 2 years in advance; others only 1 year. Advanced reservations allow members to schedule long-term getaways and ensure availability for their guests. Annual Dues: The yearly cost to members, in addition to their one-time initial fee. Annual dues differ by club and by membership plan and range from US$ 2,500 to US$ 100,000. Equity Club: Members own a share of the company that owns the club and/or its properties. Holiday (Period) Reservation: A reservation made by a member for a highly popular, peak vacation time of year. All destination clubs holiday periods include Christmas/New Year s week and July 4th, but some clubs have a broader definition of holiday than others, so it is important to inquire about a club s definition of holiday period before joining. The number of holiday reservations available to members varies depending on the club and the membership plan. For clubs with pay as you stay membership there are no limits to holiday reservations. For prepaid plans the typical memberships will have between 0 and 2. The window for making such reservations is usually between 2 months and 2 years, depending on the club. Independent Audit: An official examination of a club s financial statements by an outside audit firm. Independent audits assure members that the club s financial records are properly maintained. Independent Valuation: Appraisal of club properties by an entity outside the club s ownership. Initial Fee (or Membership Dues or Membership Deposit or Membership Fee): The initial one- time membership fee that a member pays to join the club. The amounts vary by club and membership plan and are generally between $10,000 and about $600,000. Part of this fee may be refundable when a member resigns, depending on the club policy. Membership Plan (or Membership Type): Most clubs offer a variety of plans which may Home Value: provide different numbers of nights of use. The Average value of homes in a club. Home values typical prepaid plans can vary from 7 nights to vary among clubs and range from US$ 1 million over 60 nights (or even unlimited nights subject Days/Nights Included: to US$ 5+ million. only to the reservation rules). Plans with larger Number of nights available in a club membership numbers of nights have higher initial fees and plan. Some clubs refer to usage availability in higher annual dues but in return usually also terms of number of days and others in nights. have larger numbers of Advanced Reservations and Holiday Reservations and may have a longer window for Space Available Reservations. 2018 SHERPAREPORT www.sherpareport.com 24

Member Cap: The limit placed on the number of members who can join the club. Only a few equity clubs have this cap. These clubs aim to raise a set amount of money and buy a set number of homes which they ll hold for a fixed period of time before selling them and distributing the proceeds to members. Member-to-home Ratio: Total number of full members divided by total number of club homes. This number usually ranges from 5:1 to 8:1. The member-to-home ratio offers a broad idea of availability. However, it is better to consider the occupancy ratio (see below), particularly if clubs have several levels of membership plans, offering anywhere from 7 nights to over 60 nights. Clubs usually convert their member numbers into full member equivalents, so for instance they may consider someone with a twenty five day plan to be a half member, if a full membership has fifty days. Nightly Fee: The (additional) cost to members for a night s stay at a club home. Most clubs do not charge separately per night, and some clubs only charge a nightly fee once a member exceeds the number of nights allotted in his or her membership plan. Non-Equity Club: The club members have rights to use the homes but are not shareholders and do not have any ownership interest in the club. Occupancy Ratio: The percentage of a club s homes that are occupied at a given time. It is important to look at the overall occupancy ratio across a club s entire real estate portfolio, and to also look at individual locations by season. For example, ski locations in winter may well be close to 100% occupied but could be nearly empty in the Spring mud season. Pay as You Stay Plans: In several newer clubs members only pay for homes as they reserve them. These clubs have low annual membership fees and relatively low initial fees. Pre-Paid Plans: In most clubs, including all the equity clubs, members pay for a fixed number of nights each year. These clubs typically offer several different plan levels with different numbers of nights in each level. Members can usually buy additional nights if they use all their plan nights in a given year. Resignation Ratio: Commonly denoted as 2 in, 1 out, or 3 in, 1 out, this number signifies the number of new members who must join the club before a resigning member receives their refundable deposit. So 2 in 1 out means that 2 new members must join the club before a resigning member s deposit is paid. If a club is growing rapidly, members typically do not wait long to receive their refunds. If growth slows or stalls, and new members are not being added, then refund payments will also slow. Space Available Reservation: A home reservation made at short notice within a specific time window before departure. The window varies by club and membership plan but is typically less than 90 days before departure date. Space available reservations usually offer a lower minimum stay than other types and are very useful for short notice, short duration trips. Refundable Deposit: The proportion of your initial membership fee refunded upon resignation from the club. For the few clubs that offer this option the most common amount refunded is 75%. Equity Residences, Lake Tahoe 2018 SHERPAREPORT www.sherpareport.com 25

8.2 Snapshots of Leading Clubs For the most up-to-date profiles of the leading clubs visit http://www.sherpareport.com/ destination-clubs/dest-clubs.html. We regularly update this page and the club profiles that are linked from this page. In addition, on each club s profile page, there are links to the latest news and research about the clubs. The following pages have overviews of some of the leading clubs. Top: Inspirato, Squaw Valley, CA; Middle: Destination M, New York, NY; Bottom: Rocksure, Antigua 2018 SHERPAREPORT www.sherpareport.com 26

Equity Estates Equity Estates is an equity club offering more than 70 residences spanning 30 countries. Homes range from 2 to 6 bedrooms, 2,000 to 7,000 square feet. The club takes care of each investor s every need from vacation itinerary planning to pre-stocking your favorite groceries no task is too big or too small. Initial Fee $257,500 - $692,500 Annual Dues $13,500 - $40,500 Nights/Year 15-45 Success is measured by return on investment and return on living. We take pride in designing inspired experiences that create lifelong memories. Philip Mekelburg, Equity Estates Founder and CEO. Equity Estates, Anguilla Some example locations include: Cabo San Lucas, Mexico; Paradise Island, Bahamas; Playa Langosta, Costa Rica; Jopsey Bay, Anguilla; Miami Beach, Florida; Phuket, Thailand; Hilton Head, South Carolina; WaterSound Beach, Florida; New York, NY; London, England; Paris, France; Snowmass, CO; Deer Valley, UT; Lake Tahoe, CA, Scottsdale, AZ. Overall we ve been very impressed with the consistent level of service, and all the hosts have been outgoing, helpful and have had great recommendations. Kevin Adelstein, Equity Estates investor member. Equity Estates, Costa Rica http://www.equityestatestravel.com 2018 SHERPAREPORT www.sherpareport.com 27

Equity Residences Equity Residences LLC manages two investment funds the Equity Villa Fund and the Equity Platinum Fund designed for the ownership and enjoyment of multiple vacation properties. Managed by a team of experienced finance, hospitality and real estate professionals, the properties are purchased well below market peak with expected upside appreciation. After 10 years, the properties will be sold, and investors receive their money back, plus any positive investment returns. Initial Fee $157,500 - $315,000 Annual Dues $0 - $2,988 Nights/Year 14-56+ Some example locations include: Deer Valley, UT; Longboat Key, FL; Big Island, HI; Mammoth Lakes, CA; Palm Beach Shores, FL; Palm Springs, CA; Kauai, HI; Maui, HI; Marathon Key, FL. Our business model appeals to those looking for a solid investment, as well as luxury vacations, said Managing Director Greg Salley. We focus on acquiring properties in prime locations at discounted prices to optimize longterm appreciation. Our investors like the upside, and love vacationing at the properties while rental income offsets operating costs. http://www.equityresidences.com Equity Residences: Top: Deer Valley, UT; Bottom: Big Island, Hawaii 2018 SHERPAREPORT www.sherpareport.com 28

Destination M Destination M is a non-profit organization whose real estate portfolio is entirely owned and governed by the members. As a club member you collectively own the company s diversified property portfolio and have exclusive access to a choice of vacation residences valued between $1.5 - $2.5 million. Initial Fee C$147,500 - C$295,000 Annual Dues C$13,970 - C$27,050 Nights/Year 21 60 Members can also book Space Available time within 0-30 days prior to travel and this does not use up their membership plan days. The investment in one s lifestyle makes for a good real estate investment as well, said John Beckel, GM of Destination M. Destination M, London, England Some example locations include: Cabo San Lucas, Mexico; St. Philip, Barbados; Rancho Mirage, CA; Mauna Lani, HI; London, England; Paris, France; Whistler, BC; Kelowna, BC; Scottsdale, AZ; Peninsula Papagayo, Costa Rica; Barcelona, Spain; Provence, France We like variety in our travel but also really enjoy the comfort of a home not a hotel room, and the added space that allows family or friends to join us. Wilf Gobert, Destination M member. https://destination-m.com/ Destination M, Cabo San Lucas, Mexico 2018 SHERPAREPORT www.sherpareport.com 29

Solstice Collection Solstice is a boutique, global luxury destination club offering members an alternative to second home ownership. Club Members gain access to a collection of artisinal, luxury vacation homes in some of the most desirable destinations in the world. These special homes are in Florence, Italy; Paris, France; London, UK; Colombier, St. Barth; New York, New York; Aspen, Colorado; Napa Valley, California; Cabo San Lucas, Mexico. Members also have preferred access to 4 other additional homes. There are three tiers of membership to choose from: Signature, Platinum, and Sky. Each tier of membership comes with some of the most generous home usage entitlements in the industry. Solstice, Cabo San Lucas, Mexico Initial Fee $15,000 Annual Dues $44,000 - $120,000 Nights/Year 30-120 http://www.solsticecollection.com/ Solstice, Florence, Italy 2018 SHERPAREPORT www.sherpareport.com 30

Inspirato Inspirato is a rental based club, which provides access to a curated collection of 900+ luxury vacation options in 175+ locations. The Inspirato Collection includes private vacation homes available exclusively to members and guests, villas and residences at world-class resorts, hotel rooms and suites at guaranteed members-only value, and remarkable adventures in faraway lands and at world-renowned events. Initial Fee $10,000 - $30,000 Annual Dues $3,500 Nightly Rates $90 - $3,000+ Inspirato, CA, Wine Country We create memories for our members that are irreplaceable. Family bonds are strengthened, new friendships are formed while on vacation, and our members recognize this and want that experience to be a part of their lives. Brent Handler, CEO and Founder of Inspirato. Some example locations include: Abaco, Bahamas; Cape Cod, MA; Hilton head Island, SC; Kohala Coast, HI; Los Cabos, Mexico; Nevis, West Indies; Peninsula Papagayo, Costa Rica; San Diego, California; St. Croix, U.S. Virgin Islands; Turks and Caicos; Aspen, CO; Deer Valley, UT; Lake Tahoe, CA; Stowe, VT, Vail, CO; Chicago, IL; Florence, Italy; San Francisco, CA; Provence, France. https://www.inspirato.com Inspirato, Punta Cana, Dominican Republic 2018 SHERPAREPORT www.sherpareport.com 31

The Rocksure Club This travel & lifestyle club, goes well beyond private villas and apartments and into lifestyle experiences. At the core of the club s principles lies the conviction that beautiful accommodation, mouth-watering food, excellent wine and the opportunity to experience the best things that a destination has to offer should be recommended by both travel professionals, and also by like-minded club travelers. Initial Fee $340 Annual Dues $1,700 Nightly Rates Various Rocksure, Andalusia The club offers access to managed, exclusive and selected private properties and boutique hotels across summer, ski and winter sunshine destinations. Lifestyle experiences range from concerts to kite-surfing, cultural immersion and adventure across Europe, Africa and the Americas. If you want to gather your family together at a villa in Tuscany or Provence, you don t want to search through a thousand properties on the internet. You want to provide your requirements and then be guaranteed perfection. It s as simple as that, says founder David Rogers, who was also the founder of the Rocksure Property equity funds. https://www.rocksureclub.com/ Rocksure, Provence 2018 SHERPAREPORT www.sherpareport.com 32

Exclusive Resorts Founded in 2002, Exclusive Resorts has purchased hundreds of millions in real estate going from dozens of members to thousands of members, from dozens of homes to hundreds of homes, and from a startup to a significant company with $100+ million in annual revenue. The Residence Collection features more than 370 multimillion-dollar homes worldwide. Their carefully selected Experience Collection provides access to 50+ unique adventures and itineraries spanning seven continents. Members also enjoy privileged access to world-class partners through the Club s Hotel Collection. Initial Fee $125,000 - $250,000 Annual Dues $19,725 - $39,450 Exclusive Resorts, Paris Nightly/Year 15-30 Some example location include: Aspen, Deer Valley, Maui, Napa, New York, Riviera Maya, Abaco, Nevis, Turk & Caicos, St Barths, Barcelona, London, Paris, Tuscany Exclusive Resorts has fulfilled more than 270,000 vacations while delivering consistently high levels of service. To do this, ER retains more than 350 service professionals ranging from a team of Denver-based Vacation Ambassadors to on-site employees and providers, often solely dedicated to ER Members. https://www.exclusiveresorts.com Exclusive Resorts, Real-del-Mar 2018 SHERPAREPORT www.sherpareport.com 33

8.3 Assessment Notes Use this planning checklist for comparing the top clubs you want to consider. CLUB 1 CLUB 2 CLUB 3 Club Name Club Contact Favorite Locations Preferred Membership Plans Days Holiday Reservations Initial Fees Annual Dues Key Services Review Reservation System Other Notes 2018 SHERPAREPORT www.sherpareport.com 34

Interested in using private jets and private aviation? Read the SherpaReport Guide to Private Aviation. Download the Guide at https://www.sherpareport.com/aviation-guide.html It covers aircraft charter, jet cards and fractional ownership. Citation Sovereign 2018 SHERPAREPORT www.sherpareport.com 35