Annual Report 2018/19

MESSAGE FROM THE PRESIDENT & TREASURER (cont’d)

Although net membership is only down 8.2% compared to pre-redevelopment, we saw Member monthly usage slip to around 70% (vs. industry average of 60%) this year. This decrease can be primarily attributed to delayed outlet openings and noisy work that impacted outlets during operating hours. As usage dropped, covers and monthly spend also declined significantly. Encouragingly, as new outlets opened throughout FY19, usage and spending steadily trended upwards with Member usage for the full year ending at 74.8%. We have seen an even greater upward trend since the Lobby opened and Tradewinds began operations in early July. While these trends are promising, regaining our pre-redevelopment metrics will take time. Our membership base has a historical average annual attrition of about 350 Members, so our newmember recruitment efforts will need to exceed this number for the next several years to bring us even with pre-redevelopment membership levels. Although much of the redevelopment has been focused on The Club’s hardware, we recognized early on that our software, our much-beloved staff, give The Club its heart and feeling of home. The General Committee made a commitment to our team at the start of this project that we would preserve jobs despite outlet closures. That has translated into a low staff attrition rate of just 1.35% per month at the end of FY19. This commitment has allowed our staff to cross-train in new outlets, gain professional training, and build their organizational knowledge, all so that they can serve Members better and more efficiently. This is also helpful in the context of the tight labor market in Singapore. Both management and the General Committee are aware that the payroll costs on an absolute basis and as a percentage of revenue are substantially higher than pre-redevelopment. This is a function of The Club retaining experienced staff, creating a larger usable Member space, hiring staff ahead of new outlet openings to ensure they are appropriately trained to meet expected service standards, and paying annual increments for staff, all while revenues were significantly lower due to a large part of the Clubhouse being closed. Given that redevelopment is coming to an end, and it has been ten years since compensation practices were last reviewed, we have engaged a globally recognized compensation consultant to review compensation practices at The Club. The consultant will be benchmarking compensation to the industry as well as weighing in on the mix and total compensation of our management and staff versus our peer group. In line with our original goals, The Club made strides to increase operational efficiencies and enhance our sustainability efforts. Initiatives such as guest check-in kiosks in the Lobby and Scotts Road entrance, and the automated system at Thinkspace to access meeting rooms, phone booths, and the Library, were all successfully implemented. The addition of plant-based options on our outlet menus, initiatives to use less electricity and water, and a 75% use of biodegradable packaging at Central furthered our green efforts. Enhancing Our Software

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The American Club 2018/19 ANNUAL REPORT