Tech-centric developments involving virtual reality (VR), cryptocurrency and new socialization concepts created by pandemic-induced lifestyle and workplace changes all made inroads into the club world as the current decade began.
Just how much of an effect some of these trends will have and how permanently they may take hold, however, remains to be seen.
VR IS HERE TO STAY
Virtual reality as it relates to golf continues to gain momentum from the popularity of Topgolf and other entertainment complexes and the proliferation of golf simulators that are now a common amenity at many clubs. At the end of 2022, VR got a strong endorsement from the PGA TOUR, which announced a long-term deal to make GOLF+ its “Official Virtual Reality Golf Game.” The agreement includes plans to create new gaming experiences that will let virtual players experience exclusive, interactive content and features tied to real-world PGA tournaments, and continue adding tournament courses to the venues that can be played virtually on the platform.
This is all worth noting for clubs that aspire to host tournaments but have yet to take steps to make their courses accessible through VR technology. Even for clubs that might not desire that level of exposure, virtual reality play may still be worth a look as a way to increase their appeal to golfers and gamers of all levels, promote more practice and year-round play, and perhaps even serve as an acceptable in-season option, to help ease the course crowding that has been created by full memberships and in some cases has become a growing source of member frustration.
CRYPTO’S CREEPY RETREAT
Before Sam Bankman-Fried turned the crypto world upside down, there was enthusiastic speculation that adapting digital currency options for payment of initiation fees, dues and other charges could help clubs pursue their long-standing goal of appealing to the next generation of members, particularly in areas with well-populated corridors of tech firms.
This rose to a fever-pitch level with announcements earlier in 2022, before the FTX fiasco hit the fan, of ventures such as a newly owned private luxury golf resort property in the Bend, Ore., area where membership could only be obtained through the purchase of a nonfungible token, and LinksDAO, a virtual community that was formed (and raised $11 million in the first weekend) for the stated purpose of making a crowdfunded purchase through cryptocurrency of a Top 100 golf course that would be transformed into a modern golf and leisure club billed as a playground for “a global community of thousands of enthusiasts.”
With that enthusiasm now greatly tempered by the economy as well as by what’s been revealed about cryptic realities, it’s hard to see these types of ventures expanding the club universe on any kind of a significant level. And it’s even more difficult to see how digital currency may become a mainstream substitute anytime soon for traditional forms of payment to join and use clubs.
WILL THE “NEW” CITY CLUBS SOON GROW OLD?
Great enthusiasm also emerged in the early aftermath of the pandemic for the potential of alternative members-only club concepts that followed and built on the model first popularized by Soho House. Concen- trated in urban areas, these clubs emphasize diversity as they cater to affluent professionals who are seeking opportunities to network and find social lifelines in the absence of the usual in-office connections.
Clubs of this type derive the bulk of their revenue from food and drink and other usage fees, as well as some guest-room business, and attract membership by offering an expanded array of upscale amenities and activities, including well-appointed workspaces with features such as soundproof “pods” for Zoom meetings. The promise of exclusive exhibits and events, live music on a nightly basis and concierge services for hard-to-get tickets and other perks are also promoted as part of these clubs’ appeal. While their initiation fees and dues are usually less than traditional city or country clubs, some have been positioned as ultra high-end, with entry costs ($100,000 and up) and annual dues ($15,000 and up) on par with the most exclusive golf clubs.
As new ventures of this type have proliferated, however, many have encountered the challenges and risks that come with running any type of club in a major market, including higher rents and operating costs, and staffing issues that make it difficult to maintain the high levels of service that have been promised.
Ironically, while they all strive to be seen as offering a radically different approach to the private-club concept, many of these newly established clubs are also finding it difficult to distinguish themselves with a unique mission or value statement, bringing into question whether they will be able to engender the same level of long-term loyalty that well-established city clubs have maintained for multiple generations. The remainder of the decade should help to deter- mine whether most of these new-look clubs will have enough staying power to form a distinctive new segment of the club industry, or instead prove only to be clubs of the moment. Either way, other clubs, particularly city clubs, should take note of some of the more creative and inspired aspects of these newer clubs’ facilities and operations, to see if they could also be adapted to help broaden their own clubs’ appeal and value proposition.