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Use of East Wing: cost to members of hosting private events at the Club

Forum Home Forums Horizon Project – Have your say! Use of East Wing: cost to members of hosting private events at the Club

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  • #57830

    Posted on behalf of a member who contacted the Club by email.

    Firstly, many thanks to you and to all the Committee for all you do for the Club. Thank you also for keeping members better informed, and encouraging our greater involvement – hence this, my first ever letter.

    I voted in favour for the Member’s Resolution to make better use of the East Wing for member’s use, especially given how little income outside events actually generate for the Club. I agree that the Club’s location is difficult for many corporate events. I also thought that many imaginative and useful ideas were presented to develop the East Wing for better use by members.

    I feel that the East Wing has evolved into a quite separate entity from the Club, deserted except at weekends, a hollow venue waiting for a corporate event. Nor does the space work very well for members at weekends when it resembles a large, noisy refectory – good for families with young children, but not a great atmosphere for Heathcote-age members, nor very convenient for older members, with seating allocated in what is in effect a draughty corridor outside the Deli, or the segregated but hardly relaxing area of the Carvery.

    With regard to private events, I have often thought it a pity that the East Wing has proved too expensive for many members to hire for their own parties. I have known many members who have hosted family weddings and other events elsewhere because of this. I have also noted that they were rather embarrassed to admit to this. I certainly have had to look elsewhere to host various parties, which I would much preferred to have hosted at the Club.

    While I’m sure many were as relieved as I was by the Chairman’s suggestion at the AGM that members refrain from prefacing every statement with, “I’ve been a member since …”, I think it’s relevant here to note that I’ve been a member for over 50 years. My family used to host quite a number of parties at the Club. It would be lovely to do so again. While the prices charged may be competitive with corporate events (this I don’t know), they nevertheless seem too expensive for many members to avail of their Club for private events.

    It seems to me that it may be worth looking into the possibility that charging less to members may actually generate more income. Were it more affordable, members would very likely host numerous events, all the significant birthdays, from 18th, 21st, and all the decades, to engagement and weddings, and other significant milestones. I think that being more flexible and accommodating to members, and making it more affordable, would encourage more use of the East Wing.

    Might it be an idea in your next survey to incorporate a question asking whether members have ever hired other venues for private events, whether this was motivated by price, and whether they would host more events at the Club were it less expensive?

    While the Club’s location in a residential area, at an inconvenient distance from central London, is a disadvantage for corporate events, this is not a problem for members. I suspect that members availing of the Club for private functions would be more flexible than the corporate world, permitting earlier use of the facilities, more in keeping with the residential area.

    Also, I am not sure if I understood correctly at the AGM that a large number of staff are employed in order to cater for outside events. Could this large expense not be out-sourced, as and when required, in the same way as others are hired in?

    I take this opportunity to thank you for all you’ve done for the Club (especially during this difficult last year, when the Club succeeded in actually becoming a more attractive venue for many young members), and to wish you the very best in the future.

    #57831

    Response posted on behalf of Richard Rawlinson, Chairman of the Finance Committee and also the sponsor of the Horizon Project that is looking at our long-term strategy and use of buildings.

    I think your opinion that the configuration and use of the East Wing should be improved is widely shared by members, and addressing those questions is an important part of the Horizon proposals. As you rightly point out, there are many and intriguing possibilities.

    Just a few facts, first on the use of the East Wing, and on events, all based on 2019 data, the year before covid so disrupted normal operations:

    Of the meals served in the East Wing, considering both the Napier servery etc and events, 58% are paid for by members and 42% by non-members.

    The events revenue in the East Wing was as follows:
    Club-organized events £360k
    Member-organized events £729k
    Non-member events £3,330K

    Compared to non-members, members are granted a 60% reduction in room hire charges and a 35% reduction in wine and liquor prices (they pay the same prices for food); they also have an early booking member-exclusive period.

    The result of these numbers is that the contribution (before admin salaries) of member events was £111k whereas for non-member events it was £673k (club organized events made a significant loss). In percentage terms, the contribution to overheads on member events was 15% of sales vs 20% for non-member events; and the sales to non-members were 4.6 times sales to members.

    You are correct in understanding that we have a dedicated team to service the events business: catering for several hundred meals to be served a once is a very different operation from taking orders one by one in a restaurant, even if there are some shared costs and overlaps. The team includes both full time and part time or agency / contractor staff.

    You are also correct in thinking that maintaining the flexibility of the East Wing to cope with events has come at the expense of our ability to provide space best adapted for the needs of members. Fewer non-member events is likely to be necessary to improve all or part of the East Wing for member use. Various options will be put to members for reduction in events and repurposing of all or part of the East Wing.

    From a purely commercial point of view, we do not see that reducing prices for member events would increase the Club’s income from them. If we reduced prices to members by 5%, for example, we would have to increase the revenue from member events by 49% to get back to the same contribution; I doubt that a mere 5% price reduction would be enough to increase the number and size of member events by 50%.

    We could reduce prices if we were more efficient in servicing them. We are aware that some club polices eg to pay London Living Wage and provide a comprehensive benefits package, do raise costs above some other venues, although more and more other venues are themselves increasing wage rates. We do continue to look at cost reduction possibilities and recently have made some changes to that end – though currently the benefit is being swallowed up in higher wage rates (and we are not intending to reduce wage rates, that are the bulk of costs).

    Prices to members for events could be reduced if the Club were able to offer services to members at cost price only. That is what we would like to do. Unfortunately, because subscriptions have not increased in line with costs, and are now 12% lower in real terms than they were 10 years ago, the Club has become dependent on income from events in order to cover operating costs and necessary capital investments. To some limited extent, that includes income from member events – as it does income from eg coaching, and other services that the Club does not offer at cost price. Although subscriptions will need to rise above RPI to cover loss of non-member events income and possibly to fund development projects, I doubt they will go up enough to allow us to forgo current sources of income from member events, coaching etc .

    On the costs side, member and non-member events are served by the same team, and if non-member events decrease too much, that team will not be economically viable. If the team served only members, at the current level of member events and charges, the team would be loss-making and no doubt there will be pressure to recover the losses through higher, not lower, charges to members for events. Most likely we will continue to maintain a viable sized team covering both member and non-member events and we would hope to keep cost and charges the same, event with lower non-member volume. But the lower the volume of non-member events, the harder this will be.

    Alternatively, we might discontinue the events team and ask members to bring in caterers for any event on club premises. We have looked at this: members would select a contractor and deal directly with them while Hurlingham would receive only room rentals and a commission. We concluded that total costs to members for events at the Club would increase, while Club income from events would fall to negligible levels, especially for member events where room rental is already discounted by 60%. I do not think this is attractive; more likely, if we discontinue the events team, we would only offer events to members that our restaurant team could cope with, say for up to 50 guests.

    In short, give the improbability that more volume could make up for a reduced margin on member events, the best hope for reducing member event charges would be if the Club ran a healthy surplus, combined with enough non-member events to allow us to run a large and fully cost-efficient events team. While reducing external events may have many merits in terms of allowing us to improve the East Wing for members, it will not improve our events cost position, nor help us with income that could be used to reduce charges to members. At best, if significant non-member events are retained, we will hope to keep member charges much the same.

    Thank you for your interest, and I am sorry I cannot be more hopeful about the desirable prospect of reducing charges to members.

    #57858

    As I said to another anonymous poster I would be surprised, considering how long you have been a member, if we have not met. Maybe we have?

    Thank you for supporting the Resolution that Martin and I submitted to the AGM. I chatted to as many people as possible after the meeting and was pleased when several said they gone with an open mind and came away in support of our suggestion. It is a pity that when we make suggestions about improving the member experience some people still think that non-member events have a big impact on our subscriptions.

    Reading the ‘chat’ that took place during the AGM on Zoom shows how much the misconception continues particularly with the people who chose not to come to the meeting.
    http://www.tonygamble.uk/Horizon/AGM%20Chat.pdf

    We were anxious to stress the difference between events promoted by non-members and events, such as parties, promoted by members. You say that you used to host parties but started to look elsewhere because of the cost. My wife and I hosted two wedding anniversary parties and found the expense of decorating the rooms excessive if added to the price of hiring them. It can be less costly to hire somewhere else that needs less doing to it to stop it looking ‘functional’.

    When Martin was speaking he showed some suggestions as to how the rooms could be redecorated. They were unashamedly copied from pictures of other venues and certainly not intended to be the only way forward. This is the folder he worked from:-
    http://www.tonygamble.uk/EastWingRefurb/index.html

    Now is not the place to challenge Richard Rawlinson’s figures in detail. However, I am sure that if the area looked more appealing it would be used much more. Using the Palm Court and Quadrangle we could have a decent sized Bar and Brasserie operating seven days a week. If they served good food and drink at reasonable prices, in an attractive ambience, I am sure members would flock to them.

    Richard will argue that member f&b makes no money. Other clubs find a compromise between affordable subs and reliably good f&b at a fair price. Why can’t Hurlingham with its reputation and closed waiting list of eight thousand find a solution? Are we shackled by people like the lady in the ‘chat’ who says “I do not want subscriptions increased”?

    If we turned the Broomhouse and Mulgrave into rooms in which you could host a party without being forced to redecorate I am sure they would be in demand. Yes, we would need staff with banqueting expertise, but we would not need to pay for a sales team chasing bookings from outsiders.

    It is interesting that in the Zoom chat there are still folk who claim these non-member events enhance the club’s reputation with the locals. People who live nearby say the opposite and find them intrusive, particularly late at night.

    A time will come when the local authority will seek to further restrict the traffic to these events in the same way that they are concerned about the number of parking spaces. I’m told that when a big outside event is taking place Hurlingham Road and Napier Avenue turn in an Uber cab stacking system. Members holding their own parties, many of whom probably live locally, would not create the same problem.

    Thank you again for supporting our Resolution. We support your ambition of seeing more members host parties at their club.

    Tony

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