Recovery and Resurgence

In January 1975, the US ambassador to Japan, James Hodgson, congratulated the Club on the opening of its brand-new Azabudai facility.

“It is a handsome addition to the Tokyo landscape. More than this, the American Club offers a center for Americans to gather. The fact that so large a percentage of the members are not Americans is ample proof of the value and the interest of such an activity in Tokyo,” he wrote in a letter.

Those words could easily be applied to the present-day Club, which opened in January 2011 after a three-year, ¥28 billion redevelopment project.

Now in his third year as Club president, or representative governor, John Durkin spoke to iNTOUCH’s Nick Jones about the state of the Club and plans for the 87-year-old institution. Excerpts:

iNTOUCH: How is the Club doing?

Durkin: The Club is having a great year. We returned to a membership level exceeding the period before 2008’s global financial crisis and are steadily growing the membership month by month. We are ahead of the TAC 20/20 financial plan targets by about two years.

iNTOUCH: Is there a ceiling on the number of Members?

Durkin: My view at the moment is somewhere around 4,000 Members, which is built into the TAC 20/20 strategic plan. We are at almost 3,900 Members now and, in the current market, it will take about another 12 to 18 months, give or take, to add that extra 100 or so Members. After investing ¥28 billion in our new Club facilities, we should be able to accept 4,000 Members and maybe a few more.

iNTOUCH: What happens when the Club reaches that limit?

Durkin: The Board and Membership Committee will need to decide, but I will advocate for a one out, one in policy and perhaps higher entrance fees.

iNTOUCH: Why were the entrance fees raised in July this year?

Durkin: We occasionally align our entrance fees with demand. Back in 2013, when the number of Members had declined, we introduced a temporary lower entrance fee. As the number of Members grows, adjustments may be made to keep demand aligned with capacity.

iNTOUCH: How is the Club doing financially?

Durkin: We are doing great. This year’s results will allow us to reduce the Club’s redevelopment debt to around the ¥7.8 billion range, a reduction from ¥11 billion. We are achieving the financial principles of the TAC 20/20 financial plan. As a giveback to Members, we expect to do well enough to sponsor another year-end event and free holiday shows for families. We can also invest in Club capital improvements next year. In principle, any surplus funds are used to repay the Club’s debt.

iNTOUCH: What did the Club accomplish this fiscal year?

Durkin: Aside from growing the number of Members, we opened CHOP Steakhouse to fantastic Member acceptance and, as a result, we were able to close the venue to the public. Traders’ Bar was refurbished with new comfortable furniture and introduced craft beer taps and more local beer selections. We expanded our First Friday events to include improved food and entertainment, hosted the largest July Fourth event in recent memory, and organized another year-end party and free family holiday shows. As a summer treat, we worked with a key supplier to reduce the price of beer by ¥250 during the hottest part of the year. We also launched the new website at the start of the year and amended our loan agreement to lower the interest even further. It’s been a busy 12 months. Membership of the Club is now more valuable than ever.

iNTOUCH: Any disappointments this year?

Durkin: Even with preferential entrance fees for the international community, the diversity index, although somewhat improved, has been very slow to move. We will likely need to keep preferential entrance fees in place for the time being.

iNTOUCH: What is planned for next year?

Durkin: I want to solve crowding in the family dining restaurants on weekends and holidays. We have a number of ideas, such as exchanging the six- to eight-person tables for tables for two to four people. The booths are also too tight and uncomfortable. The Board, Food & Beverage Committee and management are committed to solving this issue. We also plan to invest in upgrades to the Fitness Center, including expanded space, more cardio machines and free weights. We may expand the center’s hours of operation. The objective is to ensure the Club remains the best fitness facility in Japan. Importantly, we are also looking to complement our exceptional staff in the Food & Beverage and Recreation departments by hiring experienced professionals in their respective disciplines. One thing I have learned is that great Member experiences result from positive interactions with staff. With more Members, we need to strengthen that bond with a few exceptional additions from outside the Club.

iNTOUCH: How about the longer-term future of the Club?

Durkin: As the number of Members has grown, some of the design misses of our facilities have become apparent. In particular, the locker rooms are crowded at times, so I would like to explore a way to remediate that. We are also seeing a year-on-year decline in the number of DVDs rented, so there’s an opportunity to convert the DVD Library space for another use while maintaining the DVD collection elsewhere. Both of these initiatives will require discussion, planning and capital investment to be successful.

iNTOUCH: What are your plans?

Durkin: Under the Club’s rules, I am only allowed to be president for one more annual term, so until November 2016. I’d like to continue to work with management, committees, the Board and our Members to deliver the value that Members expect and to ensure that Club membership is a treasured privilege.

Photo: Kayo Yamawaki