I don't disagree with anything said so far but would just make a few comments.

There are a few clubs in the Manchester area which manage to run good singers' nights (or singarounds) AND regularly put on good quality guests on nights which are well attended (though not necessarily by those who attend the singers nights). The quality of guests and the 'home grown' support acts both encourage good attendances. In addition the people running these clubs make those attending feel welcome. Good communication, via regular e-mails, helps people feel involved.

The range of ability in singarounds is wide and I have found them generally very supportive of those of lower ability (I include myself in that category). Confidence or lack of it can make or break a performance and it should not be underestimated just how daunting it can be to perform in public or in front of musicians of much greater ability. The use of a safety net (i.e. crib sheet) can be invaluable to someone whose performance in their own home is good but who 'goes to pieces' in the public arena. Many with crib sheets sing with their eyes closed anyway!

Just how you get more of the people who attend singarounds to attend guest nights (and maybe learn something which could help them improve) is the problem. One local club offers tokens on singers' nights which give a discount on guest nights. I can't say if this works but it seems like a good idea.