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7 February 2019

The Evolution Of Private Clubs

By Chris Mumford - Managing Director at AETHOS Consulting Group

The desire to be with and around other people is an innate human characteristic. In evolutionary terms, humans quickly worked out that strength in numbers equalled survival, and this need to seek connections and to form bonds with others has remained within us over time, even as the threats to our existence have altered and diminished. The need to band together to fend off attack or to kill for food has been replaced by a want for social interaction and companionship. For most, school is the first place we begin to form relationships with like-minded fellow humans and where we form groups, teams, cliques and gangs. In 19th century London, the desire to maintain these friendships beyond school and university gave rise to the gentleman's club. These clubs were formed on a membership basis open only to those considered to be of 'gentleman' status and centred on a common interest such as politics, art, sport, travel, university or section of the armed forces. As the British Empire spread so too did gentleman's club - to India, Hong Kong, and Australia. Eventually, women were allowed to follow suit and form their own clubs. Henceforth, these exclusive clubs came to be known as 'private member's' clubs.

For the following hundred years or so, clubs remained the purview of the elite as discreet, no-questions-asked venues for socialising, pursuing leisure interests, exchanging gossip, and wining and dining. As the elite aged and the 'gentleman' was replaced by the 'businessman', many private member's clubs became relics of a distant age and struggled to remain relevant. That all changed in the mid-1990s when, just as Ian Schrager reinvented what a hotel could look like, Nick Jones turned the club world in London on its head with the introduction of Soho House. Over the subsequent two decades Soho House has spawned and inspired a thriving industry sector of member's clubs that are in tune with the lifestyle zeitgeist of the times. Think boutique hotel design, rooftop pools, award-winning mixologists, yoga classes, converted historic building, celebrity chefs and guest speakers opining mindfulness, cryptocurrency and coding. If proof were needed that the member's club has been fully reinvigorated and accepted by the consumer market, Soho House, which began life specifically targeting the arts and media worlds and taking delight in rebuffing those from financial services, opened its biggest site, The Ned, in 2017 bang opposite London's financial heart, the Bank of England.

The member's club has become a global phenomenon in recent years with a proliferation of trendy clubs opening in key cities in the United States as well as established clubs launching outposts in European capitals and gateway Asian markets. The concept however has evolved from those 19th century days of a club being a townhouse with dining room, room, library, billiards room and a handful of bedrooms upstairs. Over the years many clubs have increased and upgraded their accommodation component, in particular in a bid to compete with hotels and offer their members even more reason to remain in-house. Similarly, where feasible, clubs have begun expanding their leisure facilities to include gyms and swimming pools.

The club concept is also having to adapt itself to the wants and needs of its membership base. Clubs are no longer homes-away-from-home or simply places for leisure and relaxation. Increasingly today, they are places in which to conduct work and professional networking. Indeed, in this high-tech era of mobile working, many business people are eschewing fixed office space in favour of working remotely from their club on their laptop and phone. We are beginning to see the worlds of member's clubs and co-working spaces collide. A number of member's clubs are now creating dedicated workspace for their members with full connectivity and business services. Similarly, co-working groups, many of which operate on a membership model, such as Fora in London and The Great Room and Kafnu in Asia, are designing spaces and amenities with a strong social focus and 'clubby' environment.

Hotels are also entering the private club game, recognising the additional revenue stream that a membership base can provide. Creating a member's club as a private sanctuary within a larger hospitality offering can convey a perception of exclusivity and desirability, which positively translates to increased brand equity for the property as a whole. A membership base also helps reduce the hotel owner's fretting about distribution and looking for guests to fill as many beds as possible every night, as well as helping to drive increased F&B business from a captive audience. Concepts such as Gansevoort's The Curtain in London have shown how a hotel can cater to both traditional hotel guests and fee-paying members within the same building, through the provision of an active membership events programme, co-working space and dynamic F&B offering.

Some hoteliers are going even further and starting to dabble with the wholesale conversion of hotels into private membership clubs. This idea is potentially well suited to the small, independent, luxury hotel sector in which properties often command strong, long-term guest loyalty and repeat customers. The annual membership model lessens management's fixation on occupancy and rate, allows for much more predictable staffing and purchasing patterns, and gives a solid foundation of income. For the right product the conversion of a guest from a paying-by-the-night customer into an annual fee-paying member is a purchase decision driven as much by emotional as financial reasons.

As the divide between pleasure time and work time has eroded, so too have the distinctions between what constitutes a member's club, a co-working space and a hotel. Expect to see these lines blur ever more over the coming years as property owners seek more and more ways to maximise the revenue potential of every square inch. The membership model continues to hold appeal, and the question facing club operators will be whether this remains a proposition best suited to the top end of the market or if it can be stretched to become more accessible to a broader audience in the future.

Chris Mumford

Chris Mumford has over twenty years of hospitality related executive search and consulting experience gained in the EMEA and North America regions. Having studied and worked in Germany and Japan, Chris opened the US office of a London based hotel recruitment firm in the late 90's. In 2002 he joined a leading global executive search firm and returned to his native UK to establish the EMEA practice. Chris is one of the founding partners that created AETHOS in 2013 and sits on the company's board of managers. With a global client base, Chris is particularly active in the Europe, Middle East and Asia regions and advises hospitality organizations on compensation and organizational issues in addition to facilitating senior executive appointments. Chris is a frequent author and invited speaker on human capital topics affecting the hospitality sector.

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