Soaring membership costs make top clubs even more exclusive

PUBLISHED : Sunday, 12 June, 2005, 12:00am
UPDATED : Sunday, 12 June, 2005, 12:00am
 

Companies are prepared to pay out to reward staff and pamper clients


Toasting your success in the comfort of your own private members' club may seem the perfect way to celebrate a lucrative deal and draw your clients' attention to your elevated station in life.


But as the local economy rallies, those prestigious memberships are becoming increasingly expensive, with prices rising by up to 25 per cent in the past six months.


For the first time in years, demand is outstripping supply as companies scramble to snap up memberships to reward their most-valued executives and entertain their best customers.


'At the beginning of the year, a corporate membership with debenture at the Aberdeen Marina Club would have cost you $800,000. Right now it will cost you $1 million, so it has gone up by 25 per cent,' said Alison Wong, director of sales and marketing with Orient Prestige Membership Services.


She said the same membership would have sold for less than $700,000 in the economic doldrums of two years ago.


'Prices have gone up quite rapidly since the beginning of the year. In the past two years, it has been the case that supply is more than demand - but in the past six months we have seen a recovery in the market and now definitely demand is more than supply,' she said.


Ms Wong has seen rises across the board. A corporate membership at the Hong Kong Cricket Club - $200,000 or below at the beginning of the year - now costs about $240,000. At the exclusive Hong Kong Golf Club, a corporate membership cost $6.5 million in December and $7 million now.


'The alternative is to apply for an individual membership and join a long, long waiting list,' Ms Wong said.


'It is directly related to the economic recovery. People have their pay rise and bonus, and they have some money and they have been waiting for such a long time, and now they think it is the right time to buy a membership.


'They want to catch it while it is at a low price. The more they wait, it will go up more. They want to ride the wave and get into the club.'


But companies account for the greatest number of buyers.


'They buy them for directors, GMs or vice-presidents,' said Ms Wong. 'For some of them it is part of the executive package.


'They buy them for commercial reasons as well. They might have the membership for their sales people or for senior executives to take clients to play golf. That is one of the requirements in the modern business world.


'Some people do trade them as investments though. They buy a golf club membership at say Discovery Bay, knowing the price will go up rapidly, and think 'I can play golf for a year and then I can sell my membership. I will be playing golf and making a profit at the same time'.'


Ms Wong predicted the prices would continue to rise.


'We expect the trend will continue. The rate is much faster than anyone expected. We expect it has not reached a peak yet - but whether it will carry on at the current pace we are not sure,' she said.


Jacqueline Chan Suk-yin, general manager of Sandia Membership Services, said she had seen corporate memberships for Discovery Bay Golf Club climb from about $1.5 million last year to up to $1.8 million this year.


'This price is going up, but the market is slowed by the fact that it is difficult to find people selling memberships,' she said.


'Most people believe if the property market goes up, so will the value of the memberships.'


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