Several hotels are diversifying their revenue streams by partnering with social clubs to provide locals with access to guest-only amenities. The cohort includes The Aster, Dream Hollywood, Petit Ermitage, Hotel 850 SVB, as well as Pendry West Hollywood, which has added high-end residences into the mix.
“From the trends standpoint, I think you’re starting to see this more and more,” said Mark Knott, vice president and national hospitality sector leader at Project Management Advisors Inc., which is based downtown. “It’s kind of commoditizing or activating existing assets that aren’t fully utilized, and monetizing them in a way that that adds value to both member experience as well as the hotel operation.”
From a members’ perspective, “if you join these clubs, you have access to amenities that are generally reserved for hotel guests,” Knott said, adding that hotels in turn can offset lower occupancy rates with a social club membership program that generates a monthly rate of return.
“I really think this is just a next reiteration of this mixed-use approach that activates a hotel within a larger client base,” he said. “Generally (the revenue has) been limited by the number of keys — how many rooms you have, multiplied by days of occupancy — and maybe your restaurant gets some local traffic, maybe there’s a local group that rents out the meeting space. But if all of a sudden you add a club component to it, people are coming to the gym, people are coming to the restaurant and bar after the gym, they’re going to the spa as part of the service. There’s now an expanding user group or demographic that maybe hasn’t been as easily attained.”
The experience
In addition to lifting the bottom line, the social club aspect benefits the overall guest experience, according to Mark Somen, managing director of The Aster, a “purpose driven” social club and boutique hotel that opened in Hollywood last summer.
“It’s a lovely symbiotic relationship,” Somen said. “If you’re a traveler, whether you’re a tourist or you’re here on business from New York or from London, and you come into a place like The Aster, then when you’re sitting at the bar having a drink, the person next to you is a local … and then as a member, it’s nice to meet somebody who just came in from Kenya or from Australia … to spice it up with some people who’ve traveled from afar.”
Guests don’t need a club membership to partake in various club events, which recently included “two amazing women doing a self-healing workshop,” and “a movie screening with a Q&A with the director,” Somen said.
The Aster, which has 35 suites, often serves as a weekend staycation spot for its nearly 1,000 members. Some also use it to host out-of-town friends and family, as it’s “super convenient to have their mother-in-law stay here rather than in their apartment,” Somen added.
The Britely, part of a $500-million, 456,000-square-foot, 11-story, mixed-use development located on Sunset Boulevard in West Hollywood, fully embraces the residential aspect. The social club is open to guests staying at the 149-room Pendry West Hollywood and those living in the 40-unit adjacent Pendry Residences West Hollywood.
“We have really seen this as the ultimate gathering space, and it’s nice because homeowners have the option to retreat and have a private night — maybe the chef is coming in and they’re hosting a small affair, or they can go into a more social setting, whereby they have the hotel or the social club, where they come meet their business colleagues or (friends),” said Tina Necrason, executive vice president of residential at Montage International.
Fees
The Britely, which has a waitlist, charges a $2,900 annual membership fee that is waived for hotel guests and residents.
The Aster is asking for $3,600 a year and a $500 sign-up fee. Another membership benefit Somen pointed out is Sonato Alliance, a network that allows The Aster members to visit other private social clubs.
“It’s an amazing perk because you don’t pay any extra,” he said. “You pay the membership fee for the Aster and then there’s a club in Iceland, or Miami or Dallas, or Hong Kong or Singapore and you have privileges there as well. It’s a nice way to get into a local community when you’re traveling as well.”
The Los Angeles Athletic Club, a 186,000-square-foot facility downtown that houses a namesake social club, indoor swimming pool, track, basketball court, racquetball and handball courts, Pilates studios, spa, and 72 hotel rooms, offers three membership tiers — executive, associate and junior — ranging from $2,400 to $1,600.
Annual fee for West Hollywood-based Holloway House, which has 34 rooms, is $2700, while access to all affiliated Soho houses runs $4,900 a year. Access to Hotel 850 SVB’s San Vincente Bungalows is around $4,000 per year, and about half that for members under the age of 35. The membership to The Social Club at the Dream Hollywood —which was recently acquired by Hyatt Hotels Corp. — is available at $1,600.
Management structure
The Aster’s footprint was once occupied by hClub, which Westwood-based Stockdale Capital Partners acquired in April 2021. A year later, the real estate investment firm picked up Los Angeles Athletic Club. The Aster’s hotel and club operations are managed by Salt Hotels in New York, while Virginia-based Crescent Hotels & Resorts oversees operations at the Los Angeles Athletic Club.
AECOM Capital in Century City and Combined Properties Inc. in Beverly Hills developed property where The Britely sits, while Irvine-based Montage International serves as the hotel and residences operator.
“It’s not a one-size-fits-all,” said Knott. “There are definitely some nuances where two independent operators come together with a common joint-venture opportunity. We also see that there is a vertically integrated delivery, where the owner of the club program and the owner of the hotel are vertically integrated and stacked as one entity, although they may be two corporate entities below there.”
