In the world of premium hospitality, club lounges are often seen as a symbol of status — a quiet, elegant space reserved for top-tier guests. But behind the plush seating and complimentary canapés lies a question too many operators overlook: Is your hotel club lounge profitable — or just taking up space?
For some properties, the answer is a clear “yes.” For others, the lounge quietly drains revenue while occupying prime real estate. I’ve seen both outcomes firsthand. And the difference often comes down to whether the lounge is treated as a strategic business unit — or just another amenity.
Here’s a framework to help you assess, optimize, or rethink your club lounge model — starting today.
Highlights
Step 1: Know Your True Costs
Start by calculating the full operating cost. Be thorough:
- Staffing: Salaries, benefits, training
- F&B: Buffet, snacks, beverage consumption, wastage
- Utilities & Maintenance: Air conditioning, cleaning, laundry
- Capex: Furnishing, AV equipment, periodic upgrades
- Opportunity cost of space: Could that footprint generate more revenue as guest rooms, meeting space, or leased retail?
This gives you a clear view of how the lounge impacts your P&L every month.
Step 2: Attribute Revenue — Carefully
Unlike a spa or bar, you’re not charging guests directly for lounge access. Revenue shows up indirectly — mainly through higher ADR on premium rooms and increased loyalty bookings.
Here’s what to track:
- ADR uplift: What’s the premium on your Club Room compared to the base category? If it’s $60 more per night, and you sell 50 Club Rooms a day, that’s potentially $3,000 in incremental daily revenue — but only if those rooms are actually sold, not given away as upgrades.
- Upgrade dilution: What percentage of club guests are loyalty members receiving complimentary access? If 30% aren’t paying extra, that dilutes revenue attribution.
- Loyalty impact: Flip the lens — how many of those guests booked because of the club? Even if they didn’t pay more today, they diverted their business from a competitor.
Ask yourself:
- What’s the lifetime value of a loyal guest who stays 10 nights a year at your hotel instead of somewhere else?
- Could the lounge be the reason for that stickiness?
If the answer is yes, it’s part of your retention engine — and that’s worth quantifying.
Step 3: Measure Strategic Value
Even if your club isn’t hugely profitable on paper, it might:
- Boost repeat and direct bookings
- Reduce OTA dependence
- Enhance guest satisfaction and NPS
- Justify a higher base ADR across the property
For example, if 20% of repeat guests cite the lounge as a reason for coming back, that’s a strategic advantage — not just a nice-to-have.
Step 4: Scale Up — Smartly
Sometimes, the best move is to expand the offering.
At one property I managed, we extended club access to every room during peak season — a bold move aimed at creating differentiation during high-demand periods.
The results?
- Record-breaking revenues
- Outstanding guest feedback
- Increased repeat bookings
We even had to convert the lobby lounge into a temporary club space to meet demand.
The key was treating the lounge not as a static perk, but as a flexible commercial lever — aligned with demand cycles and strategic positioning.
Step 5: Rethink or Repurpose (If Needed)
If the numbers just don’t work, explore alternatives:
- Downsizing and converting part of the lounge to meeting rooms or retail
- Monetizing access more aggressively (e.g., day passes, local memberships)
- Enhancing the experience to justify a larger ADR premium
Thinking of Adding a Club Lounge?
Before investing, ask:
- Is there enough premium demand to support it year-round?
- Can we differentiate the experience — chef-led concepts, wellness programming, or curated local art?
- Will it meaningfully boost retention, brand value, or ADR?
A well-run club can be a competitive moat — but only if positioned and priced with intention.
Final Thoughts: Treat It Like a Business Unit
When thoughtfully executed, a club lounge can become a true profit center — one that drives loyalty, lifts ADR, and strengthens your direct booking performance.
But when left to run on autopilot, it can turn into one of the most expensive missed opportunities in your hotel.
In a market where margins are tight and guest expectations are evolving, you can’t afford to ignore underperforming assets. It’s time to stop treating the club lounge as a perk — and start treating it as the commercial engine it has the potential to be.
Editor’s Note:
This article, originally titled “Is Your Club Lounge Making Money—Or Just Taking Up Space?,” was contributed by Pierre Maréchal, Vice President of Strategic Advisory & Asset Management at JLL, with over 20 years of experience across Asia Pacific and beyond, advising hotel owners on asset performance, operator selection, and commercial strategy.
Views expressed are the author’s own. To pitch your story or share insights on hospitality, leadership, or business in Asia, contact the NIA editorial team.
Highlights
Read the Chinese article here.
