[David_Tepper]

Jeff Brauer's thread on Wakonda club in Des Moines scrambling for capital in face of a shrinking membership raises a question - what percentage of the members at your club are 70 or more years old?

My guess is that the answer for many clubs will be 25% to 33%.  Replacing these members over the next 5 to 10 years will be quite a challenge.  It will be interesting to see how clubs are able to cope with this problem.  

[Aaron Katz]

Indeed!  I think there even a problem when over half the members are over age 60.  I think clubs in major metropolitan areas especially need to consider changes in policies for those under age 30 (and possibly even 35) -- not only in terms of payment plans, but also in terms of agreement periods.  I'm almost 28, an attorney at a major Boston law firm, and dearly want to become a member at a nice club around here (I'd choose Renaissance probably; Boston Golf Club is just too expensive).  But my wife keeps pointing out that we don't know how long we'll be in Boston (could be forever, could be two more years).  This "plight" of geographic mobility -- something which is common for guys my age with similar income -- scares me away from making a long-term committment, but I'd be willing to pay annual dues if the club would be willing to let me be a "member at will" for a couple of years (by then I'll have a better idea of where I'll be long term).  

It seems that too many of these clubs either have an extended payment plan for "junior members" or no special deal at all.  What they really need is to allow junior members to skip the initiation altogether, or perhaps requiring an initiation only after two or three years (or more) of being a dues paying member.

[Mike Hoak]

Aaron,

I posted a somewhat similar thread on this topic as it relates to clubs targetting younger members about a month ago.  I spent several months trying to find a club here in the DC area (Northern Virginia).  I'm 31, so not all that different from yourself agewise.  

I found that several clubs did offer reduced intiation fees for prospective members under 35--not many, but some. However, all of these clubs required that the balance of the full intiation be paid upon turning 35.  Some clubs in other areas offer reduced monthly dues for younger members, but I did not talk to a single club in my area that offered such an option.  I also expect that you will have significant difficulty finding a club that is willing to waive an initiation fee in Boston.

Your wife brings up a salient point about mobility.  The DC area has one of the most transient populations in the country.  The joke in DC is that no one that lives in the area was actually born here.  It's a big issue at local clubs, because most have policies in place that require 2 or 3 new members to join the club before a member on the transfer list can get out.  Some clubs I talked to had adopted special policies to address members that are transferred out of the area.  Others offered reduced initiation fees for members that agree to sign a multi-year agreements.

Rather than adopting reduced or waived initiation fees, clubs around DC are trying to win over younger members by investing in pools and other facilities that appeal to younger members with families.  Many clubs in this area are bulking up children's activities and events for non-golfing spouses.  The wealth of children's activities at my club played a major role in getting my wife to buy-in to the idea.  

[Aaron Katz]

But all those methods of attracting younger members doesn't really get to the heart of the issue.  I don't mind paying $8000 in dues to year if I get a good golf course where I can get around in 3 hours and have a top notch practice facility where I can hone my game.  Renaissance Golf Club fits that bill perfectly, and it has a pool to boot.  

But what I can't justify is plopping down an initiation fee when I might be 3000 miles from the club a year after I join.  Now, Renaissance's fee is refundable, but only after 30 years or when your membership is sold to someone on the waiting list (which might never happen), whichever occurs first.  So, if I move, I'll probably lack the funds to pay for an initiation at a new club.  

To the extent that the club is currently well below its membership cap (which makes sense considering it is only about a year old), I think it makes economic sense to allow "at will" memberships for certain age ranges.  It also virtually guarantees that the at will member will join up as a full member once he knows that he will stay in the area.  

Right now, I could become a member of a top daily fee course for about $4000 annually (unlimited green fees, preferred tee times, etc.).  Now, that doesn't have nearly the bells and whistles of a private club membership, but it's risk free basically.  That's where private clubs are getting absolutely killed right now, I think.

[Jason Topp]

I see two issues:  (1) cost and (2) the hesitancy among younger generations to join associations of any kind.

Clubs in America will continue to decline until their prices fall.  Very few who work for a living can afford the initiation fees and dues at most clubs.  It is interesting how the golden age architects emphasized cost savings as a justification for their work and how that focus has all but disappeared at almost all clubs.

I just read an interesting book called "Bowling Alone" about a change in American culture that began around 1960 and has continued ever since.  It provides a wide array of statistics showing that people no longer join formal and informal groups as much as they did in the past.  The author argues that the erosion of this form of connection to others in society has significant negative impacts on society, ranging from health, political discourse, crime rates and so on.  

The aging of club members fits pretty closely with these general trends.  I know I viewed joining a club more in terms of access to a great golf course than to join a group of people.  I never had an inkling that joining a club would provide much in the way of enjoyable social benefits until I experienced them.  

[Mike Hoak]

Aaron,

I hear you and completely agree.  Particularly for newer clubs, it would make sense to have such a policy in place.  If the membership starts filling up, the club could then dictate that at-will members pay the appropriate initiation fee or discontinue their membership.

[Aaron Katz]

Jason,

I wonder what Robert Putnam would say about the lack of young people desiring to join clubs with a $100,000 initiation fee!  I think that bowling leagues only cost about $100 a season.

[David_Tepper]

For anyone who has not read Jeff Brauer's thread, the article he cites mentions that the Wakonda club's membership has declined by 25%. They are down to 352 members and just 57 of those members (16.2% of the total membership) is 40 years or less in age.  

[Chris Cupit]

As a course owner/operator I am looking for a good "mix" of ages.  Too many young members can be a bad thing as well even though it is unlikely to happen.

My club is a private golf club of 600 members (We cap full memberships at 475 and seniors at 125).  About 20-25% of my members are under 40, 55%-60% are between 40 and 55 and about 20-25% are over 55.

My fees are "affordable" for the area--$7500 for a full family membership ($259 monthly dues) and a senior membership is $2500 and $200 in monthly dues.

To attract the under 40's they can pay $2500 with their application, $2500 4 years later and the final $2500 seven years later.  If they are not still members of the club (moved away for example) they do not owe the second or third payments.  Also, dues for someone in their 20s are reduced 25% from the full rate and for the thirtysomethings the reduction is 15%.

Average "life expectancy" for a private memership is right at 7 years in my region so my thinking is that giving a young person that time period is fair and affordable.  Also, the club business is about dues, dues and more dues.  I want to make it as easy as possible to get qualified applicants in to start charging them dues!

My senior membership is only available to people over 55 and allows weekday golf only.  Seniors are crucial though to our success as they keep our course and tee sheet busy during the week between 8:00 and  11:30, normally a dead time for many private clubs.  In effect I have 600 members during the week and just 475 on weekends and holidays which are prime times.

Each group tends to play at diferent times and by keeping a good mix I can maximize my tee sheet.  If you had too many youngsters or seniors, they would compete for similar times and your course would seem crowded even with fewer members.  Conversely, a full and active club can keep people happy re: tee times if the demand is spread out.

BTW, unlike some private courses around me, in 33 years we have never had to use any type of "lottery" system for our members to book times.  I personally don't know why someone would join a private club only to have to get in a lottery for tee times, but some do.

Ideally, our regular 40-55 year old members "progress" to senior statues and make room for other full members (we currently have a 4 1/2 month waiting list).  Also, as the seniors can no longer play golf, they can then move to clubhouse status and come eat lunches, play cards, etc.

I know there is a lot of talk that clubs must cater to the younger families by offering every possible amenity--babysitting, tennis teams, pottery classes, aerobics, etc.  the trouble with that model is that in order to offer something for everyone, you have to charge a lot of money.  Time and other pressures easily pull young families away and how many young families with kids can justify $20k-$50k in initiation fees (even paid over time) plus $6k a year in dues!

My club is few frills--very good golf course but no swim, no tennis and our food is more burger and beer than filet and red wine, but I can keep my cost down and the young guy is able to justify my expense to his family.  

Now the younger family guy dosn't have to join a "lifestyle" club and spend every waking moment there with his family to justify the expense.  For $2500 down and $220 per month (if he is in his 30's) he can play private golf for 4 years before he owes a second $2500.  

For a while I offered a Conditional Membership geared to the person who may be in Atlanta for only a few years.  It was a two year membership for an ID of $2500 and monthly dues of $300 per month.  They had to pay more a month since they did not "commit" to the entire $7500.  Again, I was looking at the 40-50 something who was likely to be transferred.  Given my current membership situation, we do not offer it at this time though it was very popular in the mid 1990's.

(My club is in the Atlanta area just north in Alpharetta).  

[Aaron Katz]

That sounds like an absolutely fantastic menu of membership plan, and your success in attracting members certainly bears that out.  My thinking is that regions that require higher monthly dues could provide a similar menu of options and have similarly successful results.

[Jason Topp]

Chris - yours looks like a terrific model.  I particularly like the way you make it affordable and allow for a mix of golfers that would use different tee times.  I also like the priority of great golf over other expensive amenities.  

Do you feel that the model segregates members into seperate groups and does that detract from the club in any way?

[Dan Herrmann]

David,
Our percentage > 70 is zero percent.

(non-equity, new club in SE Pennsylvania)

[Dean Paolucci]

First, we have worked diligently for the last three years to attract a younger member.  254 regular and 267 house to be exact.  Our average age is now below 50.  On an ancillary point, our club offers a Hospitality committee which affords potential members new to the area or those that just don't know the required sponsor, second, and three recommendations (required to begin the traditional membership process) an opportunity for this alternate track.  Members of the Hospitality committee "socialize" the prospect and ultimately serve as the sponsorship for these candidates utilizing this non-traditional route.  Next, initiation fees are usually non-refundable where bonds or membership shares are.  Last, I think research is the key to this process.  If you are willing to spend hours deciding what ball to play or what hybrid to buy then time researching a club is well spent.

[Chris Cupit]

Jason,

I think that for the most part, people tend to "self-segregate" (if that's a word) based on age.  Not all the time of course, but other than the scratch group which segregates itself based on playing ability, I think most guys play with people pretty close to their own age.

Scratch players do seem less willing to play with others that are not in their handicap range.  Again, most groups of four have a range in handicaps of up to about 10 strokes but the higher the handicap, the more willing to play with others (unless they are beginners and then they don't want anyone to watch them).  

I do see more and more people coming in together to join--a guy and two or three buddies so that they can ensure that they will have a game each week.  Again though, it's usually neighborhood buddies about the same age and in the same spot in life.

The best thing we do to help introduce members to one another and kind of mix it up, is our monthly mens golf association event.  About half the events the players pick their partners and the other half the golf shop makes up the teams--this is a good way for guys to get "shuffled up".  Again though, the problem is getting the "A" players to play in these events.

Now that I think of it, we have a weekly senior mens game every Monday morning between 8-10 so I might be segregating folks as well!

[David_Tepper]

Chris Cupit -

Congrats on implementing a very forward thinking/enlightenend  approach to attracting members and sustaining them at your club. I am sure a lot of clubs could benefit by studying what you are doing.

However, it sounds like your club is a commercial business. Is that correct?

My post was aimed more at the traditional members-owned/equity golf club. I think those are the clubs that are facing a serious decline in membership over the next 5-10 years. I doubt enough of those clubs, to their detriment, will be as proactive in dealing with the situation as you have been.

DT  

[Chris Cupit]

D T

We are commercial/for profit, although I've seen plenty of years when there was little or no profit at all!  

For private equity clubs in my area I see the following happening.  Clubs in the middle are getting squeezed and are having trouble finding an identity.

High end clubs here have IDs in the $50-75k range and monthly dues $550 and up.  Entry level clubs are $2000-$10k and dues $300 or less.

The clubs in the middle are getting whipsawed--the $20k, $450 a month club isn't "nice enough" to compare well against their big brothers (and that's who their memebrs always want to compare themselves to).  But, they are "nice enough" that they can't really cut anything to save signicant money without creating an uproar.

Existing members who paid $20k or so don't want to adjust price to reflect the market since that means lowering the price.  Only solution is to assess which leads to more membership loss or raise dues which also raises attrition rates.

Since most could not justify a new mega facility--or be able to secure financing to do it, they really  need an honest self assessment and run their club like a business.

A big problem with member run clubs is that "for profit" or "as a business" is considered a bad thing.  I can almost guarrantee that any venture that starts out trying not to make money, will almost certainly lose it.

The good news is that there are many good, smart, forward thinking people at private clubs all over--just need to identify them and let them do their thing.  One impediment to this is sometimes it is hard to get some of those "progressive" thinkers elected to a club board.

[David_Tepper]

Chris C. -

I think your comments are again right on. At 9 out of 10 private equity clubs, by the time the "powers that be" recognize there is a problem with their aging membership, it will almost be too late to do anything about it. The club will fall into the assessment-losing members-more assessments-losing more members vicious cycle you describe.

DT

 

[Mike_Sweeney]

I mentioned this a few months ago, but some golf clubs outside of NYC are now creating reciprocals with NYC dinner clubs and athletic clubs. I now can play:

http://www.uppermontclaircountryclub.com/

and Yale GC (where I already was a member) through a membership at The Cornell Club, and

http://www.salemgolfclub.org/home.asp

through the New York Athletic Club. There are restictions, but at this stage of life, weekend mornings are tied up with kids sports anyway.

In 2006, I will actually play the greatest number of rounds at Mountain Lake 1000+ miles away, as 36 hole days are the norm when you get there. The bulk of the local membership was obviously older, and The Colony House was in the red because of infrequent use. They redid the course, brought in a national membership who now use the Colony House which is now getting a new pool and  new workout facility. It is back in the black and everyone seems happy, and I believe the local membership has become younger too. Even my non-golfing wife loves the place, so they created a very nice balance of family and golf buddy trip kind of place.

All of that said, I would kill for my son and me to have access to the 9 hole course at the author of this thread's home course in San Fran.  

[David_Madison]

The problem is even worse at residential community/clubs, where all or most of the membership comes from within "the gates." You can easily end up with a lot of people who purchased their homes when they were in their 50's - 60's and a few years later they are in their 70's - 80's. The oldest in the group still stay in their homes, but they don't play golf anymore, so they either resign or become social members. But by staying in their homes, they clog up the works for younger people to come in and join as active golf members.

In the face of all that, all that we've been able to do is to go out into the surrounding area and try to attract younger members with discounted memberships. It can work to a point, but there's still the obstacle of being seen as an outsider to the vast majority of members who live inside the community, a tough thing to overcome when the thing you are selling is all about recreation and commraderie.

[Ed_Baker]

Aaron Katz, have you looked in to the Harmon Club in Rockland Mass ? It's a nine hole course with a range and nice clubhouse, even has a little par 3 type practice area for short irons. The clubhouse also has a large exercise room.

The golf course is short and narrow, certainly not noteworthy architecture, but the greens are good and it is private golf in the Rte. 128 belt of Boston.

It's very inexpensive, might be a good alternative for a couple of years, until your career plans firm up.

[Aaron Katz]

We have been considering moving back to the States.  Aside from finding decent work in a decent climate one of the negatives of a move is certainly the club membership.  I don't fancy having to play public golf or start looking into overpriced club memberships.  

I think CC's pricing structure is a cracking idea.  While I feel for Aaron, I don't think a free ride into a club is good club policy unless they are looking to be a waiting room for members to join the next club up the ladder.  Joining a club should have some sort of financial commitment.  The commitment is on both sides which is fair enough.  This is why the graduated initiation fees are a good idea.  If after a few years the member decides the club is not for him he can walk, but the club still retains some cash benefit from a short timer.  

The problems discussd on this thread are the same problems clubs in the UK experience.  The big difference is most clubs are already operating purely as a golf clubs (not country clubs) and initiation fees/dues are already relatively low compared to the States.  How do clubs attract new members or keep old members without seriously reducing already fairly basic course maintenance?  We offer the graduated initiation fees, but they couldn't be waived because the club depends on this money for course improvements.  My fees are going up again next year to just shy of £700.  This is up from £400 in 1999. That is a 75% rise - quite substantial.  And I think our club has done a pretty good job (due to a committed committee) of balancing cost with improving the course.  

I am afraid the only real outcome will be course closures.  Courses closest to population centres will feel the pressure of closing down.  All it takes is a good offer.  

Ciao

Sean,

There are easy ways to contract around the "waiting room" problem.  Here is a deal I would be willing to sign on to, for example:  

Club's normal policy is $50,000 initiation and $550 monthly dues, with the initiation being refunded after 30 years or upon resignation and resale of the membership to someone on the waiting list (meaning the club must have reached its membership cap).  I would be willing to join at  $600 monthly dues, with the initiation fee waived unless I remained a member for 3 years; the club could cancel my membership at will with 30 days notice, and if I resigned my membership I would have to pay the club $5000 in liquidated damages if I joined another club within a 100 miles radius within the next 18 months.  I would even be willing to put some sort of bond up, so long as it was automatically refunded upon resignation.  

I think the above deal is eminently reasonable, and I think that club's could offer such a deal to anyone under age 35 and be able to justify the availability of such memberships to the rest of the club's members.  

[Tiger_Bernhardt]

Aaron, You have to have some trust in the market. You bought a house. If the club is good one, then there should be demand for the stock. Much of the professional world does move more than a generation or two ago, but demand is demand. I would join a club with demand, just as you would buy a home with resale potential in your place in life. Country Clubs have had old memberships all my life.

[Tiger_Bernhardt]

Sean, your annual fees are a bargain compared to any US Club, not matter the market. I live in a medium size community and both clubs here have $250 to $300 a month fees. This is a great deal compared to many places.

[Aaron Katz]

Tiger,

I'm DYING to join Renaissance Golf Club.  I think it's a special place and an amazing design by a supremely talented architect (Silva) at the height of his powers.  I can afford the yearly dues, but am a bit unnerved by the initiation (which is refundable on the conditions I noted in prior posts).  

The only reason I don't have trust in the market is because according to "the market" the most desirable places to join are those having a Palmer, Nicklaus, or Jones course.

[Dan_Callahan]

Aaron,

There is the added risk in these parts of oversaturation. In addition to the many old, old clubs that will have a waiting list for the next 100 years regardless of what the market does, there are a number of very good new courses within an hour's drive. From Renaissance to Black Rock to Boston Golf Club and Turner Hill, there is a lot of competition right now for members. I think (hope) that in the next year or two prices might come down as a result. We might have been in trouble if Healey got elected and dropped the income tax rate to 5 percent, but that shouldn't be a concern any more.

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