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Is the Members-Only Club Making a Comeback?

Posted November 1, 2017 By Andrew Littlefield

What do you think of when you imagine a “members-only social club?”

Do you see a country club out in the suburbs, with retirees working on their short game, trading investment tips between swings? Or maybe it’s a hazy bar with leather and oak furniture, filled with old men sipping whiskey and smoking cigars?

What you might not imagine is a trendy space, filled with ambitious professionals, hard at work on their latest project sprints, product launches, audits, photoshoots, fashion designs, or TV pilot. But the members-only social club, long a stalwart of the old-money elite, is experiencing a bit of a facelift.

The New Club on the Block

Across major urban areas like New York and Los Angeles, new members-only social clubs have cropped up hoping to attract a new type of social class—one based less on elite status and more on an innovation mindset.

Back in the early 20th century, members-only clubs were the go-to spot for a city’s economic elite to mingle, trade tips, and make deals. But as America’s wealthy began to move to the suburbs, many clubs saw their numbers dwindle and eventually close. Even the venerable Downtown Athletic Club, who sponsors college football’s Heisman Trophy, had to shut it doors due to economic hardship in 2002.

Bucolic country clubs, often the anchor of expensive suburban real estate developments, took their place. But as the country’s young professional class moves back to or stays in large cities after college, new members-only clubs are launching with offerings catered to the wants and needs of Millennial and Gen-X professionals.

They’re wise to do so. Millennials are the largest consumer group to come along since the Baby Boomer generation, accounting for 37% of all adult consumers. And as this group enters the wealth accumulation phase of their lives, they’re ready to start spending. Millennials with household incomes of over $100,000 already number over 16.6 million, a number that’s almost certain to keep growing in the coming years. Members-only clubs are eager to take a bite of that spending pie, and they’re pulling out all the stops to do it.

Take Spring Place in New York City. It’s one part co-working space, one part social club, whose marketing material bills it as “a place for creatives of all stripes,” like actors, directors, designers, photographers, musicians, and more. Membership is very much geared towards the self-employed or young entrepreneur. Besides the networking opportunities, club members also get access to a nice place to work and meet with potential clients or investors—something the home office doesn’t provide.

Other clubs—both new and old—offer similar benefits wrapped in a different package. Looking for a more traditional feel? Try the Yale Club on Vanderbilt Avenue, established back in 1897 and still thriving. Need more curated engagement opportunities? Neuehouse might be more your speed, with near daily offerings for members including film screenings and cooking classes. Or maybe you want access to the hottest spots in the city? SoHo House offers a concierge that can help you get that impossible table at the hottest restaurant.

But despite the range of styles, one critical central theme remains: a community for ambitious people to connect with.

Kara Erickson is one such young professional hoping to join one of these clubs. Erickson recently launched her own business, and needs a comfortable place to work and host events. For her, membership is an investment.

“For me, what’s most important is the networking aspect. Getting little bursts of inspiration from people who are working on anything and everything, because these spaces are not limited to any one industry.”

Of course, membership comes with a price—starting plans at Spring Place range from $1,200 a year up to $2,000 a month. That price, combined with the closed membership, naturally attracts skeptics who might write the clubs off as elitist enclaves. That’s an attitude that Erickson initially felt as well, but has since changed her mindset.

“I can see how the exclusivity could rub people the wrong way,” she says. “But I think it’s about shifting your perspective from being offended to seeing it as an opportunity. There are benefits to being in a space like that, and having access to all those things you wouldn’t have access to in a home office.”

Engaging Young Workers

Creative entrepreneurs aren’t the only ones taking notice—some businesses that already have office space see the need for so-called “third spaces.”

Convene recently conducted focus groups with tenants of a major commercial office landlord in New York City and Los Angeles, and found executives were often frustrated at a lack of available meeting space for things like board meetings, or even a nice, quiet place for business lunches. But meeting space takes up valuable square footage. Modern, “professional” clubs can help solve this problem by offering shared space with far more comfortable amenities than the crowded lunch spot on the corner.

But clubs offer another benefit employers are eager to take advantage of: professional and social development.

As Millennials continue to exert more influence in the office, companies are scrambling to offer benefits that will appeal them. 87% of Millennial workers say that professional development is very important to them, and job engagement and well-being also rank highly for this group.

While much has been written on engaging Millennials at work, what’s less discussed is the burden this places on employers to offer these services—particularly smaller companies. This is another area in which modern clubs can help lighten the load, by providing engagement opportunities, wellness classes, and training.

This desire expands beyond club memberships to the buildings Millennials work in every day. Young workers in the Convene focus group report expressed a desire to meet other tenants in the buildings in which they work, expressing things like “I feel like sometimes it’s a challenge (to find time to socialize)… I wish the building would provide more opportunities for this.”

Others pointed out that the annual fire drill was about the most social event of the year, but what they really wanted was programming aligned to their interests and learning opportunities. This presents an opportunity for building managers to attract and retain high value renters, by bringing a bit of the members-only club atmosphere to their building.

Dollars and Sense

While club membership can be expensive, it pales in comparison to rent prices for office space in major metropolitan areas. That’s what seems to push so many young entrepreneurs over the edge on joining a club: using their membership not just as a place to meet like-minded people, but as a space to run their business.

“Having that physical space kind of gets you out of that ‘home office’ environment, and forces you to get into work/professional mode,” says Talia Davis. Davis started her business, Pink Pearl PR, in Vancouver, British Columbia—one of the most expensive cities in North America. Just this past summer, she joined the women’s-focused club Hycroft. For her, club membership provided not just networking and mentorship opportunities, but a place to work and meet with clients at a cost far less than renting a full office. “Being an entrepreneur can be quite isolating,” she says. “Even when you’re working as part of a team. I just really felt like it was a home away from home.”

In fact, members-only clubs could be positioned to thrive because of their cost, not in spite of it. As Millennials enter the wealth accumulation phase of their lives, they’re changing the luxury spending landscape. With $200 billion in yearly spending power, they already represent the largest spending segment for luxury items, but they’re not displaying status the same way their parents did. Instead of watches and cars, they’re choosing to spend their money on services, education, and self-improvement—what USC professor Elizabeth Currid-Halkett calls “inconspicuous consumption.”

“The top 1 per cent now devote the greatest share of their expenditures to inconspicuous consumption, with education forming a significant portion of this spend.”

If this seems antithetical to the egalitarian Millennials you’ve read about, there’s another development that may surprise you: Millennials are starting to split into two distinct groups within themselves. According to the Center for Generational Kinetics, one group of Millennials is starting to reach the traditional mile markers of adulthood—marriage, homes, and careers—while the other is not experiencing this sort of “real-world traction.” As a result, these two groups are beginning to relate to each other less and less.

It’s this “aspirational class” that members-only social clubs hope to reach. With a lot of money on the line and an ever growing market, there’s reason to be optimistic. Some still may balk at the exclusivity, but from inside the club, the future looks bright.


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