Private Clubs and Hotels: How Owners Bundle Mixed Assets

Hotel developers and asset managers diversify revenue by integrating private membership clubs, wellness hubs, and residential units directly into their hospitality real estate. These hybrid formats blend recurring local membership dues with hotel room income, while capital structures such as condo-hotel sales reduce construction debt and protect assets against volatile, seasonal travel demand.

How do membership models reduce development debt and rate volatility?

Developers increasingly rely on alternative capital streams to absorb development risk and stabilize seasonal fluctuations. In secondary collegiate markets, volatile demand creates hurdles for traditional hotel underwriting. As reported by Hotel Dive, luxury condo-hotel concept Alum circumvents these hurdles by pairing transient rooms with private membership clubs and residential units [1]. Alum co-founder and CEO David Vialli explained that selling condo inventory pays off the project construction loan upfront, transforming the remaining hotel, residential inventory, and private club into an unencumbered asset once operational [1].

This structure specifically solves the problem of high-demand event periods that collapse into mid-week troughs. In football destinations like Tuscaloosa, Alabama—where Alum is breaking ground on an independent property near the University of Alabama—crowds of 250,000 visitors arrive on game weekends and pay up to $2,500 per night for mid-tier rooms [1]. By establishing an exclusive club environment for donors, alumni, parents, and visiting media, the property captures ongoing club engagement alongside lodging revenue [1]. In this hybrid setup, 68 condominium units can flex into 104 hotel keys using lock-off configurations, securing both long-term stays and transient room inventory [1].

What spaces convert transient guests into paying members?

Operators are dedicating multi-level footprints to creative clubhouses, co-working lounges, and communal parlors to attract local patrons alongside hotel guests. According to Hospitality Design, Left Lane's Recess Hotel & Club Savannah—a conversion of the 1912 Beaux-Arts Manger Building in Savannah's Historic District—anchors its 221-key layout with Club Recess, a 5,500-square-foot members-only creative space on the second floor [2].

The club layer features studios, meeting rooms, communal workspaces, libraries, and a conversation pit [2]. Left Lane blends membership with traditional lodging by granting honorary clubhouse membership to all overnight hotel guests, while offering tiered memberships to local residents seeking workspace and event entry [2]. The communal framework extends throughout the 136 guestrooms, 23 suites, and 62 bunk rooms: each guest floor includes a communal "Rumpus Room" stocked with vintage games, Mahjong tables, and custom vending machines, while 20 bunk rooms eliminate televisions entirely to emphasize analog social engagement [2].

How does comprehensive wellness sustain non-room spend?

Developers are building extensive fitness, recovery, and bathhouse facilities that command membership dues and day-long food and beverage spend. As Hospitality Design reported regarding Moss, an urban club occupying five floors inside the 88-story 520 Fifth Avenue tower in Manhattan, connection and wellbeing are paired to engage members throughout the day [3]. Founded by sisters Colleen and Hailey Brooks, the property links social drawing rooms with Bedrock Aquatics & Athletics, a 20,000-square-foot subterranean wellness destination spanning two lower levels [3].

Rather than treating fitness as an isolated basement amenity, Moss incorporates civic bath design, hot and cold plunge pools, hammam thermal areas, fitness studios, pickleball courts, and golf swing suites [3]. Designed by Vicky Charles of Charles & Co, transition lounges and a double-height central marble bar facing Fifth Avenue encourage members to linger for meals, remote work, and social salons [3]. A similar dual-use model exists at Recess Hotel & Club in Savannah, where the Saltgrass wellness brand repurposes the historic Savannah Health Club into a circuit training gym, bioharmony lounge, cold plunges, saunas, steam rooms, and a sound temple [2]. These expansive physical wellness footprints capture routine local visits that stand independent of travel seasons.

Why are multi-brand owners integrating private clubs internally?

Hospitality investors are pursuing internal vertical integration to retain management fees, operating margins, and design control under one corporate umbrella. Hotel Business reported that Columbus-based investment firm Rockbridge built a vertically integrated lifestyle platform over 15 years to manage independent hotels, food and beverage, and private membership clubs collectively [4].

Rather than contracting third-party club brands, Rockbridge operates Merchant Collection private membership clubs alongside independent hotel management arm Makeready, boutique brand Hotel ZaZa, and independent restaurant firm Flavor Hook [4]. Rockbridge CEO and co-founder Jimmy Merkel noted during an HB Roundtable at the RTRX event that controlling ownership and operations aligns real estate assets with experiential demand [4]. Mike Deitemeyer, EVP of Rockbridge Holdings and president of Rockbridge Development, stated that direct ownership and operational control remove third-party friction and accelerate expansion into high-value markets [4].

What operational shifts occur when serving members versus hotel guests?

Operating a member-centric hotel asset requires moving away from standardized transactional service toward continuous, community-oriented programming. At Recess Hotel & Club, the team balances hotel turnover with recurring club events such as weekly game nights, biweekly happy hours, and live music, supported by a 6,500-square-foot flagship event hall, an outdoor terrace on Johnson Square, and the Kilter Rooftop Bar [2].

Similarly, Moss curates evening cultural salons in its Symposium space, private dining, and open-kitchen concepts designed around daily usage habits [3]. As Eric Gavin, president of Makeready, explained during the Rockbridge panel, operating outside traditional brand standards gives on-site teams the freedom to tailor services to market demand [4]. By uniting private memberships, dynamic social programming, and flexible lodging inventory, owners construct defensive real estate models that generate consistent cash flows from multiple demographic sectors [[1], [2], [4]].