Gansevoort Hotel Adds Members Club: Founder's Lessons To NOT 'Hemorrhage Money'

25.08.2023 - 13:26 / skift.com / Sean Oneill

A handful of real estate investors are exploring how to combine hotels with members clubs — which typically charge an annual fee for access to co-working spaces, food and beverage offerings, and a fitness or wellness center. Yet blending a hotel with a club can be tricky, said Michael Achenbaum, the president and founder of the Gansevoort Hotel Group.

“I know a lot of people are moving into this genre [of membership clubs, but, to really figure out how to work it, it’s not the simplest thing,” Achenbaum said during an on-stage interview at the Boutique Hotel Investment Conference on June 8.

Achenbaum began in hospitality with The Gansevoort, a boutique property that opened in 2004 in Manhattan’s Meatpacking District — and in the past year received a $30 million renovation.

In 2017, Achenbaum wanted to take the membership club model and apply it in a modern way to a hotel. In London’s Shoreditch neighborhood, he co-developed The Curtain. His firm then essentially sold the property (or freehold) to Ruben Brothers, leasing it back to run as a management company. During the pandemic, his firm had to walk from the property. The Curtain is now Ennismore’s Mondrian Hotel in Shoreditch.

This fall Achenbaum is taking the lessons he learned in London to add a membership club to The Gansevoort in New York. His lessons include what type of people to target, how to avoid conflicts, tech mistakes to avoid, why keeping control of the business is critical, and advice on using influencers wisely.

He’s not alone in toying with the concept. Updated versions of members clubs have become trendy with the successful initial public offering of Soho House in 2021. Last year, hotel developer Ennismore debuted Gleneagles Townhousein Edinburgh, mixing a 33-guestroom luxury hotel with a membership club that caters to locals. In 2021, Hong Kong-based Rosewood Hotel Group opened Carlyle & Co., a private club. London’s The Ned, a hotel-and-members club, landed in New York City late last year.

Achenbaum learned in London that creating a thriving membership club required a different approach than launching a buzzy nightlife-centered hotel in 2004.

“One of the basic lessons I would tell you is don’t necessarily try to find the coolest people — we had 3,000 applications for the club — but instead be very focused on getting the right people who will truly utilize the various spaces,” Achenbaum said. “You have to balance who is really going to use the spaces versus who … will have the right sort of cachet. Otherwise, you’re hemorrhaging money.”

You also need to listen to your members and give them what they want.

“I had gone in pushing heavy on music as a theme because Shoreditch has a heavy music focus [as a neighborhood],” Achenbaum