The private luxury vacation rental industry typically remains under the radar as far as the news is concerned. Lately, however, corruption and poor service has begun to affect luxury vacationers on a level that even the press is taking notice. Last month, we reported on how a Russian billionaire was frauded out of thousands of dollars by an concierge and luxury vacation rental provider in St. Tropez who charged their client for a fireworks show that was put on my the city. While this is an isolated case, it sadly has become indicative of many luxury vacation rental providers throughout the world.
But the level of corruption and incompetence in the luxury vacation industry has finally gone global.
Today, Business Week reported that worldwide luxury vacation giant Ultimate Escapes is filing for bankruptcy, after only a 6-year tenure as a luxury vacation provider. In a press release, Ultimate Escapes CEO Jim Tousignant sought to blame the failure of the company on the 2008 financial crisis and recession, saying, ‘When your cash stops flowing, your expenses don’t stop. You’ve got staff, you’ve got properties, you’ve got fees, property taxes, mortgages that have got to be paid.’” In addition, Tousignant also cited a failed public offering as well, raising only $10 million when the company in fact needed a minimum of $30 million to cover managing its debt, which currently ranges between $100 and $500 million.
The real problem, however, is not limited just to Ultimate Escapes, but the entire private luxury vacation club business model as a whole.
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