If you ask multiple Soho House members how they feel about the club’s handling of the coronavirus pandemic, you’ll get a panoply of opinions.
“Soho House thinks they can charge people memberships during this pandemic? That is insane,” LNA Clothing Brand Director Ashley Glasson texted me the other day. “I was having a bad day, and this just really put me over the edge.”
The longtime Los Angeles-based member promptly chose to freeze her membership, rather than pay $3,200 in annual dues after she discovered the Covid-19-shuttered club was offering only in-house credit for months missed, instead of stopping collection.
Chicago resident Sean Fitzgerald is more sanguine. “Soho House, I think, is doing the best they can,” says the five-year member. “Admittedly, I miss the house, but I was excited to splurge on spa products with my stimulus check.”
In an emailed statement, Soho House explained that members are being given the pro-rated equivalent of their annual dues, depending on how long the houses are closed; credits for March and April have already been applied. They can be spent on merchandise or saved to use on bedrooms or food and drink when the houses reopen.
For members’ clubs, it’s a slim line to walk as social distancing challenges the once-thriving industry. Like so many restaurants and bars, they must continue to acquire enough money each month to cover property taxes and other expenses without frustrating and potentially alienating their most precious asset of all—members. (And they certainly don’t want a class-action lawsuit.)
Big Business
The U.S. alone holds approximately 3,500 private clubs with revenue of $1 million or more, according to Club Benchmarking, a data service. American clubs contribute more than $3.75 billion in taxes, service a total of more than 2 million members, and add $21.5 billion to the economy each year, according to the National Club Association.
The average club derives 43% of its revenue from membership dues and 27% from food and beverage sales, according to Club Benchmarking. Monthly expenses can easily reach six figures, even during a pandemic. Membership dues contributes roughly 70% of fixed operating costs, including payroll that cumulatively supports roughly 450,000 club employees nationwide.
“In [the recession of] 2008 and 2009, clubs dropped dues or initiation fees,” says Henry Wallmeyer, the president and chief executive officer of the NCA. And it was a disaster. “We have learned from that lesson and are encouraging clubs not to do that this time.”
Instead, they’ve been instructing clubs not to change things, he continues. “Keep the membership dues where they are, keep even initiation fees where they are, but provide experiences for members in other ways.”