A host of successful new strategies for long-term growth is leading a market rebound for business, dining and athletic clubs.
When the downturn put a damper on both corporate and individual spending, city clubs were challenged more than any others to stay relevant and provide value.
To confront that challenge, many in the market segment—which includes business, dining, yacht, athletic and other specialty clubs without golf—focused on short-term survival tactics. In so doing, they lost sight of the opportunity the recession presented to step back for some big-picture introspection and ask: “What should our new club model look like now?”
It’s a question with many facets, when viewed from within a city club’s framework: What do today’s members want from a business club? What should be its unique value proposition? How do you become a club of the future, instead of the past?
“The economy affected this club the same as clubs all around the country; we saw an increased amount of resignations,” says Nadia Eloufir, General Manager/COO at The Houston Club in Texas. “If there is a silver lining, however, it’s that it has shocked us into significantly resetting our business model, versus what otherwise may have been a slow decline, with reactions that may have come too late.”
Similarly, clubs like the Detroit Athletic Club, The University Club Atop Symphony Towers in San Diego, the Commerce Club in Atlanta and The Wisconsin Club in Milwaukee have also been rewriting their business models—and in the process, gaining financial strength along with a much clearer long-term vision.
Rather than trying to be everything to everyone, these clubs have developed new strategies that better align with their core businesses. And the committees, Boards and members at each of these properties have embraced the change. As a result, these clubs have not only ensured their short-term survival, but positioned themselves for exciting new futures.
Detroit Athletic Club: Reshaping a Downtown
Originally built by automotive industry leaders more than 100 years ago, the city-centric attitude of the Detroit Athletic Club (DAC) has helped it battle the economic effects most business clubs have felt in recent years.
Under Executive Manager Ted Gillary’s leadership, DAC has looked beyond maintaining its position as a city icon and instead built a new, stronger foundation that is deeply rooted in both member engagement and the community in which those members live and work.
Detroit is home to leaders with the same kind of core values DAC reflects: integrity, camaraderie, distinction, excellence, family, love of tradition and a passion for giving back to the community. Tapping into these core values by engaging members—many who live far from the club in the suburbs—has been a critical part of DAC’s strategy.
One successful application is in the athletics department, where the team has developed new programs, free fitness classes, expanded massage and body therapy services, a nutritional focus, and a revitalized fitness center with personal trainers.
While all of these were features of the club previously, none was sharply emphasized or creatively developed. That changed in recent years, as it became more important to offer services and amenities that could keep members engaged.
“It starts with the relationships members form during friendly competition,” says Gillary. “They compete together, eat meals together, and are happy and proud to do so at DAC.”
Another successful application has been through DAC’s dining efforts and its highly touted culinary department. A few years ago, DAC built its Stadium Pavilion, an outdoor party space that overlooks the homes of baseball’s Detroit Tigers (Comerica Park) and football’s Detroit Lions (Ford Field). Since it opened the Pavilion, DAC has seen dramatic spikes in member participation, especially before a big game, from its year-round efforts to create a party atmosphere in the concrete heart of a big city.
These innovations—and many others—have helped DAC stand as a solid symbol of outward calmness even during the latest period of economic woe, which hit Detroit first, hardest and with the most lasting impact. Throughout the trauma the city has faced, the club has developed practical and strong branding messages about its place in Detroit’s history, and has drawn on members’ strong and highly visible passion and pride in both the city and the club. DAC has refused to take drastic measures that might affect the integrity of its historic building or its membership. In 2011, in fact, the club invested over $4.5 million to remodel all of its hotel rooms, create a spa center and open boardroom space that overlooks Comerica Park.
“We have not only survived, we have thrived,” says Gillary. “Our name is intact; our brand is stronger than ever.”
The other part of DAC’s strategy is rooted in the club’s commitment to Detroit. Part of this is centered on the Downtown Entertainment District Association (DEDA), a group led by Gillary that includes other owners of property around the club, most of whom are DAC members.
“We have a master plan for the district, which includes all the theatres, the stadiums, and the restaurants,” Gillary explains in Corp!, a Michigan business magazine. “We have more than 10 million visitors who come through this area—it’s really the heart and soul of downtown. The district’s goal is to keep those people engaged when they come here. We want them to really experience Detroit and what this city and this area in particular have to offer.”
The group recently developed a detailed streetscape plan for the area around DAC, Comerica Park and Ford Field. Those plans are now under serious consideration for state funding.
“We have been able to use the club and the DEDA to unite the area around us,” says Gillary. “We are focused on helping to take care of our neighborhood.”
Besides DEDA, DAC has also assisted in ongoing Clean Detroit projects around the city, helped to improve the boulevard in front of the club’s Madison Avenue address, supported restoration of a park fountain, and promoted local, state and even national athletes through the Chuck Davey Boxing Classic and DAC’s prestigious Michigan High School and College Athletes of the Year award program. It has successfully hosted regional and even national events in sports such as basketball, squash, handball and bowling.
“There is a real sense of optimism and excitement with the positive things happening in our club and our community,” said Gillary. “Not only is it noticeable among our leaders, but it can clearly be seen among our members, too.”
ClubCorp: Redefining Business Clubs
To better align its clubs with the growing interests and wants of its members, ClubCorp has taken a sampling of its business clubs and “reinvented” them.
“We were your quintessential private club,” says Tommy Trause, General Manager of The University Club Atop Symphony Towers in San Diego. “If you wanted to sign a deal or celebrate a special occasion, you came here.”
But as businesses have changed, so have the ways in which members use The University Club, and others like it. “Across ClubCorp, we saw that members wanted more connectivity, more reasons to use their club, and fewer hurdles to do so,” says Trause.
That finding set in motion the management company’s reinvention program for business clubs, which was also piloted at Atlanta’s Commerce Club and Orlando’s Citrus Club. The reinventions seek to better match services and amenities with the behaviors and motivations of a club’s membership.
As part of the pilot program, The University Club in San Diego underwent a $2.4 million renovation that included a 3,600-sq. ft. expansion on the 34th floor of the Symphony Towers. “The renovation was the jumping-off point,” says Trause. “Our members wanted a space that transitioned from morning to night, from large groups to small groups, and from business to social. They wanted to be able to bring their clients here for business meetings, but also catch a football game on Monday night.”
As part of the renovation, The University Club added more designated member hangout spaces, such as a multimedia room with a 103-inch flat screen TV and state-of-the-art technological conveniences to suit the needs of busy executives. New “office away from office” spaces were also designed, to provide members with rooms to meet clients, work and conduct meetings.
“The downturn gave us the chance to rethink the untouchables, while forging new strategic partnerships within the city to help rebuild our foundation,” says Trause. “We now have more opportunities for members to network, relax and have fun, and enjoy new dining features, too. Now that the economic tides are turning, we’re poised to flourish.”
As part of its reinvention, The University Club expanded and renovated its bar, which now has a gastropub feel. The club also promoted one of its sous chefs to head bartender. “He makes all of our mixes and simple syrups in-house, and our cocktails are truly out of this world,” adds Trause, who reports that as a result of all of the changes at The University Club, member usage has increased dramatically.
The same is proving to be true at another “reinvented” ClubCorp property at the other end of the country, Atlanta’s Commerce Club.
In 2009, as a result of significant crossover memberships, the Commerce Club merged with another Atlanta city club, the One Ninety One Club, and relocated to new quarters on the 49th floor of One Ninety One Peachtree Tower. The space underwent a $7 million renovation and debuted to upwards of 1,900 members in November 2010.
New features included a ballroom for 200, a members bar, and seven meetings rooms named for famous Atlantans.
But the space doesn’t look entirely new; familiar furniture and art was moved from the previous clubs. “It was important that we not lose the history of each club as we designed the new space and merged the two memberships,” says Everrett Butler, General Manager. “One year later, we now have a very upbeat, social environment for our members to interact with one another. And our membership is vibrant and engaged.”
A big component of the renovation, according to Butler, hinged on integrating modern technology into the space. The club has iPads available for members to borrow, and just about every video game you could think of available to play in the media room. “We want to attract young professionals,” says Butler. “To do that, we must always have the most cutting-edge technology and AV available—not just what’s hot right now.”
The Houston Club: Where Less is More
For over 50 years, The Houston Club has been in the same building in the city’s central business district. In fact, the building was built specifically for the club. But with its 60-year lease nearing an end, the club had an important decision to make: stay or go?
“We lease 120,000 sq. ft.,” says Eloufir, who came to the club nearly two years ago because of the changes on the horizon and the opportunities they presented. “It would be very expensive to renew our lease; it would change our entire business model.”
The club looked at downsizing and renovating its current location, as well as finding a new location. “As we determined that staying here wasn’t a good option for us, the building changed ownership,” says Eloufir. “The new owners knew we were looking to relocate, so they offered to buy us out of our lease, helping us to secure some of the funds we’ll need for a new space.”
The club decided to find a new location that would be considerably smaller—by 100,000 sq. ft., in fact. A search for new space of 20,000 sq. ft. or less has been narrowed down to three venues; Eloufir hopes to announce a new location by the end of this year, with an anticipated move date of February 2013.
As part of moving to new, smaller facilities, the club has reset its business model, to focus on member connections. “We’ve been able to get out of the mode that we must repeat the events that were so grand in the club’s heyday, and assume they will bring us that same success,” says Eloufir. “Traditions are great, but you can’t celebrate them simply for the sake of celebrating them.”
The move will allow the club to return to its core values, she adds. “We are making a conscious choice to not be in the athletic business, and to not lead with being a catering facility,” she explains. “My members cannot connect to one another when they are on treadmills with headphones on. Nor can I compete with health facilities that offer an array of services and facilities at $30 a month. Catering has been, and will remain, an important aspect of our business, but we can’t live or die by it.”
Some of the club’s most successful programming includes a speaker series for young professionals that is capped at 20 members. “This gives members a chance to make connections with one another and with the speaker,” says Eloufir. “It all goes back to people connecting with people. We don’t need wide-open spaces for our club to be a success. Instead, we need intimate spaces tailored to members’ needs, and solid programming that gives them the chance to engage.”
The Houston Club has increased its volume of events as well. “Because our membership is more diverse, our events have to be as well,” says Eloufir. “We also need to make sure the programs are convenient for our members to attend.”
Wisconsin Club: Adding Value
In 2009, Milwaukee’s Wisconsin Club (WC) merged with Brynwood Country Club, through an agreement that gave members at both clubs access to each location’s facilities. The agreement called for WC to lease the Brynwood facilities for 10 years, with an option to ultimately buy the property.
“We were looking to add value to our membership,” says General Manager John Constantine. “Brynwood has always been considered one of the finest country clubs in the area, but their numbers were down. We wanted to turn the club around, and at the same time provide new amenities to our current membership.”
As a result of the merger, WC now boasts the highest number of members in its history—1,425 in all, around 300 of whom have golfing privileges.
“We’ve been very responsible in how we manage and run this club, and that has been the key to our success,” says Constantine. “As a result of the merger, as well as our programming and the level of quality we offer, we’ve become the club of choice at a value that is unmatched.”
Beyond its expanded amenity mix, WC offers members a number of other services that have helped to set it apart and drive usage. For example, the club offers a concierge service that gives members access to some of the best tickets in the city. It also offers a shuttle service from the club to and from various events and concerts around town.
“On a Tuesday night in winter, before a Marquette basketball game, we’ll do 200 covers in the dining room, then shuttle members over to the game,” says Constantine. “If we didn’t have the shuttle, we’d probably only have about 30 covers. Plus, the shuttles have our brand on them, so we’re putting our name out in the community, too.”
In addition to the shuttle service, WC offers a full calendar of social events such as cooking classes, wine dinners and even trips to Portugal, Spain and beyond.
“When we send out the newsletter each month, the phones ring off the hook with members signing up for programs,” says Constantine. “And because we’re so busy with our club programming, our growing membership base and our dining [WC is on track to do over $4 million in F&B this year], we’ve been able to invest $17 million in our building over the past 20 years.
“Everything is done the way it should be,” he adds. “Members expect that from us. That, more than anything, is what has made The Wisconsin Club successful.”
The Hartford Club in Connecticut has put a great deal of emphasis on its food and beverage operation, using dining as one of its key strategies to attract new members.
“The F&B piece has to be right,” says General Manager James Fisher. “Our Executive Chef, Chris Kube, has an impressive resume that includes New York City’s finest restaurants, all the way to pastry and desserts. He is creative, has built a strong team, and writes menus that are uniquely appealing.”
The Hartford Club stays competitive with fair prices, nightly specials, and a premium wine selection. As a result, since December of 2009, the club has brought in 125 new members.