This Week's Herman Trend Alert

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  The Herman Trend Alert

December 14, 2005

Private Clubs: A Changing Environment

Private clubs have long been an environment for corporate leaders to build relationships that generate greater business. Two types of clubs dominate the landscape. They are distinct in their attributes, yet often serve similar clientele and are frequently owned by the same companies. They are known as "city clubs" and "country clubs."

City clubs feature dining rooms, meeting rooms, and quiet places for conversations. These facilities are located in prestigious locations in central business districts of cities that serve as regional commerce centers. They are frequented by business owners and senior executives. Family members are rarely seen in these environments.

Country clubs are more socially-oriented. They feature golf courses, tennis courts, swimming pools, and similar amenities for members and their families. These clubs are typically located away from the central city, in the suburban areas where current and prospective members live. Members often fit a similar profile found at the city clubs, but the environment is much more informal.

Country clubs are undergoing a transformation that is driven by the convergence of several trends. A number of these clubs have closed and survivors are changing the way they operate.

Economics and sociological movement out of central cities have had a damaging effect on city clubs. When corporate offices move out of the downtown area, seeking lower real estate and operating costs in suburban or exurban locations, the dispersion of members makes club-use inconvenient. It is difficult to maintain members and attract new members when the people they want to meet are no longer there.

When the best way to communicate with someone was face-to-face, perhaps over a meal or hors d'oeuvres, the downtown clubs served a very important purpose. E-mail is now so easily accepted that the personal contact is not as important. Younger generations of executives have not been socialized the same way. They are more informal, preferring country clubs to city clubs. Still, the country clubs are expensive and suburbanites have many alternatives to meet others. Recruiting new members is becoming more difficult, suggesting that the club management profession will face some interesting challenges in the years ahead.

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