The clubs I go to regularly charge an admission fee for guest nights (and a small charge is made for singarounds/sessions).

The 'guest night' fee is not insignificant and I for one wouldn't want to miss the act I've paid to see. I'm surprised to hear this happens at other clubs, unless I misunderstood the OP.

As for the comment 'most performers don't want to hear other performers', that also seems at odds with my experience. If I pay to see an artist then I go along to see them, whether or not I perform as a floor singer. OK, I may not always enjoy the star turn as much as I'd hoped, especially if I'd never seen them before and didn't know what to expect, but I've never walked out (the only exception was once when I had to get the last train home from a distant club and had to miss the second set as a consequence). It's true that most performers, whether a floor singer or taking part in a singaround, are eager to do their turn, and I occasionally don't like a particular performer's efforts, but most of the time I'm happy to hear others have a go and I think most others seem to as well.