Imagine reclining by an infinity pool outside a luxury home, shaded by palm trees swaying in the coastal breezes – all while sipping an alcoholic beverage prepared by the hired help. A little out of your price range, perhaps? After all, that’s an iconic image that’s the staple of glossy magazine ads promising your own personal nirvana in some faraway destination. But in the same way Costco Wholesale Corp. collects an upfront fee from a high volume of consumers in order to provide deep discounts, Bellazo is working that angle to allow travelers to stay in luxury homes in exotic locales at a reasonable price. The Woodland Hills luxury destination club is one of fewer than 20 vacation clubs worldwide, and it’s just recently started to find its bearings after five years in business. The club allows its affluent – but not necessarily uber wealthy – clients to enjoy unlimited stays at its flagship properties in Costa Rica, as well as in 48 destinations as close as a five-bedroom home in Agoura Hills. Other properties are located in places such as Thailand, Seychelles or Mykonos. “We do not apply additional fees or make certain exotic locales more expensive than, say, a weekend stay in a private home in Malibu,” said Ron Zak, Bellazo’s chief executive, who is quick to note his company’s focus is still on the “high-end, luxury traveler.” In an industry full of major players like Exclusive Resorts LLC, Inspirato LLC, The Ritz-Carlton Development Co. Inc. or The Hideaways Club, Bellazo has taken a different approach in an attempt to keep pace. By leasing the majority of its properties as opposed to buying them all upfront, Bellazo has kept operational costs down, resulting in drastically lower membership fees than competitors. Whereas many of the destination clubs can cost anywhere up to $800,000 just to join, Bellazo costs $5,000 between the $2,500 initiation fee and $2,500 annual membership dues under its ongoing promotion to draw in more clients. Members also pay a daily room rate comparable to an upscale hotel that varies depending on the property. Previously, the company charged about $15,000 to join, but dropped its rates a few months ago to boost membership, which now totals 1,200. However, it was one of the few post-recession survivors in a landscape with steep startup costs and extraordinary skepticism among customers. Last decade, consumers witnessed various mergers of the clubs, as well as saying goodbye to the ones that went bankrupt, including Tanner &Haley in 2006 and Ultimate Resort in 2010, both of which made front-page headlines for their troubles delivering refunds to members. Nick Copley is president of SherpaReport, a Boston-based website created in 2006 to provide consumers with information on luxury vacation properties and travel clubs. While he wasn’t familiar with Bellazo, he said its entry in the market is no surprise since there have been a good number of luxury clubs that have come and gone since 1998 when the business model took hold. “I’ve just seen so many announce they are starting up and put out a press release or two and then not get much further,” he said. But he also noted that Bellazo’s fees are comparatively minimal when stacked up against other clubs, so the financial risk for members is much lower. A different model Bellazo is an offshoot of Kalia Modern Eco-Living, which was founded in 2005 by L.A. real estate developer Amnon Dahan. Dahan was developing various real estate projects in the city about 10 years ago when Zak met him. He brought Zak on board to work with Kalia, the private property development and management company. Then, in 2009, they began developing 12 homes in Costa Rica that would serve as the springboard for Bellazo’s formation. Dahan self-funded the venture with about $2 million to develop the 5,000- to 10,000-square-foot luxury homes. On top of offering travelers spacious standalone properties and beautiful scenery, Kalia’s homes are all built from eco-friendly materials, Zak said. Kalia strives to preserve ecotourism by placing its properties amidst unspoiled wildlife and using green building techniques. Though Bellazo’s Costa Rica properties are all paid for, the company later decided to lease properties in its other popular destinations in an effort to keep costs down. “A lot of the other clubs buy everything upfront, and they could go bankrupt,” Zak explained. “We do a lot of leasing. That’s how we are able to pass those savings along to our members.” Bellazo gives members the option of unlimited travel, whereas some more-established clubs like Exclusive Resorts charge members anywhere from $50,000 to $250,000 for about 20 to 30 days of travel per year. Some of the clubs’ dues, though not all, include the cost of renting the homes. Copley noted some of the higher costs at bigger vacation clubs are to offset the costs of the more expensive homes they have available. “Whether it’s a two, three or four million-dollar house, it’s obviously going to be extremely nice,” he said. “But just like with any real estate, it’s all about location so prices will vary.” Some of the pricier clubs also charge more because members are gaining a stake in the homes and company and are known as equity clubs, compared to non-equity clubs which are typically cheaper. For instance, at Equity Estates, the membership fee serves as an initial investment in the fund that buys the homes. It starts at $200,000 and has an annual fee of $9,250, according to Copley. The annual fee covers 15 days of use at the club homes. After initial fees and annual renewal costs, Bellazo members could pay anywhere from $520 per night for a 3-bedroom villa in Costa Rica or anywhere from $400 per night in other locales, since Bellazo leases smaller homes in some areas. The cost per night is comparable to a hotel stay with some of the finer companies and includes a housekeeper, chef and concierge. Other services are available at discounted rates, because Bellazo also partners with companies globally like LimousinesWorldwide.com, private golf club network Boxgroove, Nordstrom Inc. and rental car company Hertz Corp. Bellazo members can receive discounts with those companies during their vacations. Violet Niggl, an 88-year old novelist from Fort Myers, Fla., joined the club late last year and traveled alone to Costa Rica through the company. She wanted to travel to Costa Rica and discovered Bellazo through an ad during her online research. She called the phone number and was connected with a vacation planner who offered to book her roundtrip airfare to a beachfront home in Nosara, Costa Rica where she could be provided a housekeeper, a masseuse and a travel concierge who suggests nearby sites and goes on grocery runs for guests. “My friends were telling me, ‘Oh no, this is a scam. You’ll see.’ But I absolutely loved it,” Niggl said. “It was very lush and green. I had a beautiful three-bedroom, three-story villa that had a roof garden up on a hill with a magnificent view of the mountains and the Pacific Ocean.” Initially, she planned to get some writing done but once she was there, she said it was so stunning, she decided just to relax. “It was just a restful week,” she said. “I don’t ever remember coming back from a vacation rested.” Now Niggl has a second vacation planned for this summer to Puerto Vallarta, Mexico, where she will take a second try at getting some writing in. Getting going Despite the industry’s rocky past, Zak said Bellazo was profitable in its first year of business. Now in its fifth year, the business grosses anywhere from $3 million to $3.5 million annually. “It wasn’t anywhere near that high the first year, but we were able to turn a profit quickly because we started out small,” he said. The company established its core customer base largely through clients of Kalia and later found its stride with direct mail in a time when most people are turning to the Internet for clients. The company partnered with private jet companies and luxury travel agencies and was better able to reach the niche group of affluent consumers looking for deals on extensive travel. “We were finding that online marketing was not as successful as we thought,” Zak said. “We weren’t able to reach our target audience. We got to the point where we were starting to think our product was not appealing, but we just had the wrong market.” Meanwhile, the luxury destination club industry in general is still working on other ways to win over customers. Andrew Wegner, senior vice president of Exclusive Resorts, was also a founder of the Destination Club Association that was created by a group of the top clubs in 2006 and lasted four short years. “We created it at the time because there was confusion in the marketplace about whether we were similar to hotels or timeshares. We wanted to clarify our message, and we did that successfully,” he said. “We welcome more participants in the industry, and we’re optimistic for the future.” Zak, too, is optimistic. The Bellazo team wants to build a presence in more destinations and make connections with more travel partners such as cruise lines and airlines. “We have a lot of things in the works,” Zak said. “We’re talking to all kinds of companies about partnering, so Bellazo members can visit more places and get better discounts.”
Low Rent High Life
