Here’s how luxury hotels are diversifying revenue with memberships – Robb Report
Gleneagles is about to spread its wings. This spring, the Scottish Highlands golf resort will add a second site, its 33 rooms Townhouse, during a conversion from the Bank of Scotland (formerly the British Linen Company) in Edinburgh city centre. It will be more than a luxury hotel, however: 1,000 locals will also be invited to join its membership club, paying an annual fee of around $2,900 for the privilege.
And while an on-property restaurant will remain accessible, all other on-site offerings, including the rooftop bar and extensive fitness and wellness facilities, will only be available to current guests and newcomers. selected residents; members will also enjoy priority in-room booking and discounted rates. Gleneagles chief executive Conor O’Leary says Robb Report it’s a natural model for a hotel that began as a golf club. There is also a gap in the Scottish capital’s market, he adds, as there is no stand-alone members’ club or Soho House outpost there. “We know that many of the members who come to Gleneagles live and work in Edinburgh,” he explains. “So we think all 33 rooms will be occupied by people we already know, one way or another.”
Gleneagles Townhouse is no outlier. Increasingly, high-end hotels around the world are creating similar programs aimed at appealing to local residents and visitors alike. The soon-to-open 35-room Hotel Aster in Hollywood will follow the Gleneagles model of selling memberships as well as rooms; stay in one of this adults-only hotel’s 700-square-foot suites and become a temporary passholder for its amenities alongside 3,000 hand-picked locals, each paying $3,600 a year. The operator of Aster is Hotels in Salta store co-founded by David Bowd, a veteran of André Balazs’ empire, which includes Chateau Marmont to the. (Some may recall Balazs announcing plans to reconfigure this de facto celebrity club into a formal member-focused program by the end of 2020, though that hasn’t happened yet and we’re don’t know when the transformation will take place.)
The Nedthe London club of hotel members co-founded by Nick Jones of Soho House, will soon arrive in New York, commandeering the former site of the NoMad hotel. A man will also test a new membership program through its NYC outpost, which will then be rolled out to other locations; only 100 people will be chosen as founding members, paying a membership fee of $100,000 and an annual fee of $15,000 covering up to five people. Meanwhile, in Austin, there’s no limit to the number of residents who can turn the Commodore Perry Estate in their clubhouse, getting perks like free valet parking and up to 20% off room rates per night there and elsewhere in the Auberge Resorts portfolio. Membership fees are $12,500, with annual dues set at $2,400.
Why are luxury hotels adopting this business model now? Gleneagles’ O’Leary says it makes sense to diversify sources of income in the wake of the pandemic, during which local visitors have proven essential to offset global lockdowns. “It’s about hedging your bets, and it allows them to use their space a lot more throughout the day,” says Austin-based travel specialist Keith Waldon of Departure room. The widespread shift to part-time work from home is also a factor. “People need a place to escape – it’s a social and sane thing.”
Moreover, these paying neighbors act as a welcoming human showcase for visitors. “Hotels aren’t supposed to be empty,” says consultant Jeff Gurtman, of Coyle Hospitality, who agrees that filling common spaces with paying dwellers is a clever, mood-creating concept. He expects memberships will sell out not just to people living nearby, but also to wealthy visitors keen to ensure easy access at peak times, as most programs give priority when booking rooms. , among other benefits. “Everyone wants Aspen at Christmas or Tuscany in the summer, and not everyone can get it,” Gurtman says. “Availability is key.”