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Cities Are Changing, and So Must the Clubs That Serve Them

“A decade from now, the hearts of some of our largest cities will no longer be defined by gleaming skyscrapers surrounded by well-manicured corporate plazas.”

   – Kate Ascher, Milstein Professor of Urban Development, Columbia University, May 7, 2016

Cities are hot, and this is good news for city clubs. Our research on lifestyles and case studies of private clubs produces a greater level of optimism about the potential for city clubs to retain and attract members than at any time in the past twenty years. This position is based on a combination of economic, demographic and other factors that should positively impact urban growth and development for many years to come.

The most influential factor of all is the expected growth in the addressable market. Per Kiplinger Washington Editors, the percentage of U.S. residents that live in an urban setting will increase from today’s 83 percent to nearly 90 percent by 2030. As detailed in books like Alan Ehrenhalt’s, The Great Inversion, central cities are increasingly where the affluent want to live, a reversal of the fifty-year long outward migration where those who had the resources fled to the safety and manicured lawns of the suburbs.

No longer solely a business hub, most American cities are becoming mixed-use communities where residents live, shop, play and work. Whether the magnet is the arts, sports or other forms of entertainment, or new residential communities in lofts and condos, there are multiple drivers of growth in today’s cities. In addition, the new administration in Washington has pledged an even greater focus on urban renewal, and with Mr. Trump’s penchant for building, it’s likely we’ll see a lot of that activity in the heart of the city. This new urbanism is driven first by the desire of the highly educated Millennial generation (approximately 70 million people between the ages of 18 and 34) to live in the city. In many cases, they are being joined by Baby Boomers who are downsizing from their large suburban homes as they approach retirement years. Both groups share a common interest in experiences over possessions, something they can find in greater abundance in the evolving city.

This changing landscape is a shot in the arm for city clubs, if they respond to the interests and values of the new residents. This means creating an environment that focuses on lifestyles and social interactions. Although they remain an obvious part of the scene, business lunches or corporate functions are no longer the core reason these clubs exist. The successful city club of the future will provide special experiences that attract interesting people who want to increase their social circle. A key way for clubs to leverage this opportunity is to provide a modern experience in an environment that pays homage to their rich history and traditions. Today’s consumers want to know the story behind the organizations they support. Private clubs generally underplay their opportunity to communicate their background and create an authentic brand. The look and feel of the facilities is a major factor in how a club conveys this story to the world.

The sensibilities of the target market are also changing, for example, Millennials are the most ethnically diverse adult generation in U.S. history. A majority indicate that diversity matters to them, and they have a more diverse social circle than their parents. It is important for clubs to recognize this and make sure their membership policies reflect this change in values. Millennials also matured in a completely digital age, so they are put off by dated club policies that restrict the use of electronic devices. In fact, they have a relationship with their smartphone, which is something clubs should leverage to communicate and serve them. This could include informing the members about the next event via social media and making it easy to join the party by clicking on an app instead of the going through the club’s website.

The new city is also attracting the parents of the Millennials, the 80 million-strong Baby Boomer generation. They too are shedding belongings and downsizing to the city to enjoy an experience rich in culture, convenience and jobs. They are also catching up on healthy living, another demand clubs can serve effectively. A common trait of both groups is the lack of children, which helps streamline the range of amenities and services these clubs need to provide. The successful city club must provide a safe and secure setting, a personalized experience focused on fun and relationships and programming for all ages and interest groups.

In terms of facilities, key features include:

·         Varied Dining Outlets: The urban club will continue to have its upscale room suited to special occasion dining and client entertainment. The new hot spot is the lively informal/casual area like the Armstrong Grill at Genesee Valley Club in Rochester or Café Meredith at the Union League of Philadelphia. The member’s choice is not to go to one club or another, but the club or a trendy urban destination. To win this battle, the club needs a “hot spot” of its own. Create an environment where members are up and moving around and interacting with one another.

·         Get Outside: Any club with a rooftop would do well to figure out how to get access to it and use it. Look at the incredible new rooftop at Detroit Athletic Club (DAC) or the outdoor area overlooking Millennium Park at The Chicago Club. These are big winners and great examples of how facility development helps member celebrate city living.

·         Fun and Games: Active athletic or game rooms will be on the rise as members look for a place to hang out and interact. As with lively dining, create reasons to move around. It could be in traditional spaces like the bowling center at The DAC, the squash facilities at The Olympic Club in San Francisco or an adult game room.

·         Health and Wellness Facilities: This is the key value add in city clubs. It’s a health-oriented world and the urban club’s target markets of up and comers and aging Boomers cares about fitness. Largely childless, they have the time and inclination to work on their needs, which could include exercise or relaxation and restoration through spa and studio amenities.

·         Great Meeting Rooms: Business is still going to be an important part of the mix. The club will need wired meeting rooms and conference spaces and, increasingly, small conference style rooms for informal meetings where two or three people want to gather around a laptop and go over a new idea or venture.

·         “Landing Spots”: This can cover a wide range of spaces, but the essential message is that the club serves as an “oasis in the city.” The member of the future will increasingly be less office-based, so they may be seeking a communications center/Wi-Fi space to do some work or connect with the world, or it could be a cigar bar or coffee-shop styled cafes, wines bars, seating areas, etc. 

A caveat to our optimism about city clubs is that other enterprises have also identified the new opportunities available in the city. This includes a burgeoning number of excellent bars and restaurants and, interestingly, newly emerging creative industry clubs like The Soho House (New York City/international), The Battery (San Francisco) and The Gathering Spot (Atlanta). In addition, Equinox provides insight on the programming and social interaction that drives the modern fitness club. Industry leaders like Union League of Philadelphia, The Wisconsin Club (Milwaukee), Detroit Athletic Club and Genesee Valley Club (Rochester, N.Y.) and others have figured out how to win this battle. They repurposed rooms while remaining true to their architectural heritage, creating a winning package of a modern experience wrapped in a classic envelope.

Frank Vain is President of McMahon Group, Inc., a premier full-service private club consulting firm serving more than 2,000 private clubs around the world. He can be reached at [email protected]

Club Trends Fall 2016