The Social Club Resurgence
The Drawing Room at Chicago Athletic Hotel
In the 1830s, the aristocratic French philosopher Alexis de Tocqueville spent time traveling around America. Writing about his experiences later, he noted that “Americans of all ages, all stations in life, and all types of disposition are forever forming associations.”
Indeed, de Tocqueville picked up on a once-thriving element in American culture and society; our predisposition towards clubs of all kinds. Given his background, the aristocrat turned ethnographer probably spent time in exclusive social clubs during his trip, too.
Once a bastion of wealth and exclusivity, private clubs rather fell off society’s radar in the last few decades. Now, fuelled by venture capital funds, it seems like the social clubs of old are undergoing both a resurgence and a drastic transformation.
In particular regards to the latter, today’s newer clubs are likelier to scale, expand their networks, and gain locations. They are also likelier to be inclusive of a broader cross-section of society, not just men of a certain age, which is unsurprising given America’s changing societal mores and views on what is and isn’t acceptable.
Before we consider the current leaders of the new, refreshed club scene, let’s take a closer look at one of the nation’s classic club venues, The Chicago Athletic Association.
Old-world glamor in Chicago
In a pre-pandemic world, one of the best rooftops in Chicago was Cindy's, a bar and restaurant atop the Chicago Athletic Hotel. Located on Michigan Avenue, the rooftop overlooks Millennium Park, part of the skyline, and Lake Michigan. Day or night, Cindy's offers one of the best views of the city.
For history buffs like myself though, the 11 floors below tell a different story and offer a unique insight into some real old-world Chicago glamor. Once housed in the same building as Cindy’s, the Chicago Athletic Association was the city’s premier private social club for many years.
When the unlikely trio of Marshall Field, Cyrus McCormick, and A.G. Spalding — respectively a department store magnate, an inventor of harvesters, and a sporting goods tycoon — wanted to boost their city’s profile prior to the 1893 World's Fair in Chicago, they knew the town needed a premier private club. Ideally, one that would show East Coast visitors that Chicago was a premier city in its own right. Within twelve months, the businessmen had found the perfect location for their club and hired the architect Henry Ives Cobb.
After the World's Fair, the club became a thriving home for thousands of businessmen, and true to its name, formed athletic teams to compete against athletic clubs in Boston and New York.
Chicago Athletic was the city’s preeminent private club for many years, a slice of the crème de la crème of Chicago, a place to see others and be seen. It even survived the Great Depression thanks to its long waiting list of prospective members.
As society and culture evolved, however, memberships declined. Finally, in 2007, after 114 years in business, the club's doors closed for good. In 2012, the Pritzker family purchased the building, promised to restore the interior to its original design, and reopen the club as a Hyatt-branded boutique hotel.
Reputation and Social Currency
Early on, Chicago Althetics’ founders knew they had built a successful club. But did they try to scale into ten more clubs, or raise money to replicate their idea in other cities? No, they didn't. While they were all members of other private clubs, they were also content to keep Chicago Athletic as the city’s most exclusive venue.
They built the community they wanted, and they didn't want to destroy it or tarnish its lauded reputation by attempting to scale. But that was then and today’s newer clubs seem to be following a different business model, one that doesn’t rely so heavily on exclusivity for their reputations, one that instead prioritizes community, as both a culture and a selling point. However, as these new clubs focus on scale, this could devalue the social currency members have and thus lowering the demand for new memberships.
Venture capital enters the club scene
The Wing is a prime example of both the new face of social clubs and the value of investors in this space. Created to offer a network of work and community spaces designed for women, it raised $117.5 million over five rounds since it was founded in 2015. Plus, its enviable investor list includes Sequoia Capital, Airbnb, and The We Company (WeWork), which divested in 2019. Although, The Wing has experienced its issues with the pandemic and has recently put new management in place.
The biggest player in the club scene, though, is arguably London-based SoHo House & Co. Ltd. With more than 113,000 members and 28 physical locations, it’s a powerful example of how social cubs are on the make once more and how the demographics are rapidly shifting. In a 2018 Wall Street Journal article, SoHo stated its average member age is 36, much younger than the typical US private club member’s age of 50 or older, according to National Club Association data. Other notable companies competing in this space include The Assemblage, Neuehouse, and Zero Bond.
COVID-19 & the desire for community
With the pandemic throwing all of these new companies and clubs the biggest curveball, could the pandemic also play a factor in social club resurgence and drive greater demand?
Within a freshman’s first three months on campus, they typically join a club or organization, be it a fraternity or sorority, political club, theater club, or even a running club. Personally, I joined a fraternity and an investment club, which introduced me to 100 new people rather quickly. By the end of the first semester, I had a new set of friends and a larger group of campus peers.
Once I moved to Chicago after school, it took longer to meet new people outside of work. Like many others, I would hang out with friends from college and high school who lived in the city and then met their friends. If there had been a social club targeted at individuals in their 20s and 30s, I would have joined, and my friends share that sentiment. Now, with all of us quarantined for the better part of two years, the longing for physical community and interaction has only grown.
One of the more interesting polls that came out during the pandemic was the Gallup poll on mental health. It showed that the percentage of Americans who rated their mental health as "excellent" fell across the board, except for those who had attended a religious service in the last week. All can form their opinions on these results, but my guess is that these participants felt better about their mental health because they could participate in an in-person community event at a time when everyone else was staying inside their homes.
Even in the non-pandemic world, being a part of communities helps individuals with their mental health and creates a sense of camaraderie. There’s every possibility that post-pandemic, members of society will actively seek out new ways to interact with each other, and the models provided by SoHo House and The Wing could further drive interest (and venture capital) in this newly refreshed club scene.
A few final thoughts
Views on social clubs have changed dramatically in our culture over the past 50 years, but the desire to belong to a community, be it virtual or physical, is as prevalent as ever. Two key questions remain for debate though. Firstly, will these new physical social club communities continue to grow in popularity, and secondly, how much will they rely upon venture funds for growth?
For social clubs to appear and meet the increased demand for communities of varied creeds, they either need to be scaleable, or they will have to follow the Chicago Athletic Association’s example and be content with one profitable, premier venue. On one hand, we have the matter of exclusivity, ostensibly a key selling point in an exclusive social club. But on the other, we have the fact that certain societal distinctions are falling by the wayside; new clubs pride themselves on inclusivity over many other factors (despite the fact the high membership fees place them out of reach for many). Plus, as SoHo House has rather conclusively shown, being part of the in-group is still desirable, even when the in-group is much larger than a private club used to boast.
It’s an interesting moment, from both a venture capital and a societal perspective. One key thing I’ll be watching for is whether investor funds primarily fuel the rise of the new social club scene or if individuals come together and build their own clubs as Marshall Field and co did in Chicago. I also expect the number of startups offering a hybrid of co-working spaces and private communities will grow exponentially to meet demand. Watch this space.
