What will happen to private clubs in the next year?

[Mark_Amundson]

This has been an interesting thread to date.  This discussion has mostly been centered around your "typical" private club that we belong to in our community.  As a person who has been heavily involved and still involved in the development and operations of Sutton Bay and now also heavily involved in the development and setting up the operations of The Prairie Club I am keenly interested in hearing what people think about destination private clubs.  I will ask a few questions and will look forward to hearing peoples responses.

1.  What do you think are the most important things a destination club should offer the prospective member, and compare that to what your "typical" private club should offer.

2.  Have you considered joining a destination club, and if so, what was/is the deciding factor in your determination to join or not join.

3.  If your answer to #2 above was price, is it the membership deposit price, the annual dues price, or the user fees for you and your guests at the club that has the biggest impact on you?

4.  Would you rather have a membership deposit that was larger and refundable (80-100%) when you leave, a smaller membership deposit that was 40-60% refundable when you leave, or an annual fee type of membership which was non-refundable?

5.  If you were to join a destination private club, how many times per year do you think you would visit the club.

I could ask a hundred questions but will stop there.  Obviously this discussion may head in a number of other directions than just the questions above but I thought those might get it started.

[Adrian_Stiff]

Mark- What is a destination club excatly?

[Kalen Braley]

Disney and a handful of other places and companies have an amazing business plan.  Disney is one of those places that is recession proof because families will always want to go there, even if it means saving change in a bucket for years.

Nothing, absolutely nothing is recission "proof", maybe recession "resistant", but everything suffers

Cary,

Fast food resturants and 2nd hand stores are in boom times right now due to the recession. 

[Mark_Amundson]

Adrian:  I would define a destination club as one that is remote from you, at least regionally remote so that you must travel to the club, stay at the club, and use the facilities while on property.  If you live in Boston and belong to Sutton Bay that is a destination club for you.  If you live in Agar, SD (only 82 people do) then Sutton Bay is not a destination club.  I believe part of the definition is that the club offers F&B, Lodging, transportation to the club from at least one or two private/public airports, and other services that makes your stay complete.

[J_ Crisham]

Mark, I may be wrong but..... Destination clubs will take a beating in the next 5 yrs. My reasoning is that most golfers will be circling the wagons and concentrating on maitaining the memberships they primarily utilize. Most clubs will have less members which translates to increased monthlies if the same services are provided. Hard to believe in the current corporate environment that entertainment accounts will be what they were. This will result in less guest rounds at clubs across the country. Will Sand Hills be fine? No doubt. Willl Ballyneal struggle to reach their magic number as soon as they wish? Hard to see it happening in this economy.  How many other clubs will see this across the country? At the end of the day, golf to us GCA'ers is very special-to others it is a form of entertainment that can be pared out of a household budget in distress.                Jack

[Jim Nugent]

I bet destination clubs get hammered.  They are a luxury item.  Far fewer people will be able to afford them, including, I think, their mainstay clientele. 

[Adrian_Stiff]

Mark - I agree with the two previous posts and think they will perform badly in this market. I basically think golfers will want to play cheaply in 2009 and probably 2010. I think the ballott at St. Andrews may have days when it is not used... which is kinda a milestone.

[Tommy Williamsen]

This has been an interesting thread to date.  This discussion has mostly been centered around your "typical" private club that we belong to in our community.  As a person who has been heavily involved and still involved in the development and operations of Sutton Bay and now also heavily involved in the development and setting up the operations of The Prairie Club I am keenly interested in hearing what people think about destination private clubs.  I will ask a few questions and will look forward to hearing peoples responses.

1.  What do you think are the most important things a destination club should offer the prospective member, and compare that to what your "typical" private club should offer.

2.  Have you considered joining a destination club, and if so, what was/is the deciding factor in your determination to join or not join.

3.  If your answer to #2 above was price, is it the membership deposit price, the annual dues price, or the user fees for you and your guests at the club that has the biggest impact on you?

4.  Would you rather have a membership deposit that was larger and refundable (80-100%) when you leave, a smaller membership deposit that was 40-60% refundable when you leave, or an annual fee type of membership which was non-refundable?

5.  If you were to join a destination private club, how many times per year do you think you would visit the club.

I could ask a hundred questions but will stop there.  Obviously this discussion may head in a number of other directions than just the questions above but I thought those might get it started.

Mark, I belong to one destination club and have thought about a few others, Kingsley and the Prairie Club and years ago Sand Hills.  The club I joined is about an 8 hour drive for me but I play my way down and back.  Getting to the other three requires a lot of work and a full day of travel, which I hate.  Even when I ski I always arrive early and leave late so I can ski on both the arrival and departure dates.  Part of the reason for not getting to Bandon as yet is the travel. 

The Prairie Club is very attractive.  I love the idea of the Horse Course and the fees are very reasonable as are Kingsley's.  So you never know.

[Chris Cupit]

This has been an interesting thread to date.  This discussion has mostly been centered around your "typical" private club that we belong to in our community.  As a person who has been heavily involved and still involved in the development and operations of Sutton Bay and now also heavily involved in the development and setting up the operations of The Prairie Club I am keenly interested in hearing what people think about destination private clubs.  I will ask a few questions and will look forward to hearing peoples responses.

1.  What do you think are the most important things a destination club should offer the prospective member, and compare that to what your "typical" private club should offer.

2.  Have you considered joining a destination club, and if so, what was/is the deciding factor in your determination to join or not join.

3.  If your answer to #2 above was price, is it the membership deposit price, the annual dues price, or the user fees for you and your guests at the club that has the biggest impact on you?

4.  Would you rather have a membership deposit that was larger and refundable (80-100%) when you leave, a smaller membership deposit that was 40-60% refundable when you leave, or an annual fee type of membership which was non-refundable?

5.  If you were to join a destination private club, how many times per year do you think you would visit the club.

I could ask a hundred questions but will stop there.  Obviously this discussion may head in a number of other directions than just the questions above but I thought those might get it started.

Mark,

I am a member of a club 2 hours from where I live so I consider it a destination course.

I was attracted to a good golf course, one that encouraged/required walking and had caddies, a course that was a second course for most members so it would never be crowded and that had a great bunch of guys I knew already and enjoyed being around.

Obviously you need some type of sleeping arrangements at the club.  I actually loved my club's old rooms--very spartan but nice.  Small twin beds, couch, bar and a regular 27" tv in the common area.  I was there to play golf, play some cards or backgammon at night, eat a steak and have a few beers.  I could care less about the bed--just give me a place to crash and a good shower.

Now we have spent a lot of money "upgrading the rooms" with big flat screen HDTVs (nice in the common area during football season I guess but I'd rather have a shelf full of good golf books), bigger beds, nicer matresses, sheets, linens, etc...The rooms are nicer (and more expensive) but it has been the newer members who have felt the need for this not the older guys.  I guess it's what people expect now

I have never really used it a a "business club" where I entertained clients but as a course I could escape to for a weekend with myself or friends.  I do play in the spring and fall events and bring a brother in law.

I knew this was a "luxury" and would want to know (as best one can) that the club is on firm financial ground and then I like the model of a larger and more refundable fee.  The key is in believing in the financial stability of the club before you drop some cash into it.  If it was a start up club and I wasn't sure about things,  I might like a lower fee (no equity) structure that lets me cut my losses if things fail.

When I joined I though I'd get up there once a month.  The club is open March 15 through December 20 and in the last 17 years I may have averaged 6-7 2 day trips per year   I don't use it nearly enough to justify the expense but it is my only real splurge and it's the only escape for me that let's me enjoy my golf so I'd never voluntarily give it up.

[Doug Siebert]

Sean & Jason,

I didn't mean to imply that I would be looking at cost per round in terms of a private club having to meet or beat the cost I'm paying now on public courses.  Just that it would make me question my decision to play elsewhere everytime I did, because I think I'd somehow feel the cost more knowing I had a free alternative!

Worse yet (or better, depending on your viewpoint) it might make me feel like that with my time...I have a lot of flexibility with the work I do but I have a lot of things I like to do besides golf.  But if golf suddenly becomes "free" for me I might play more often, to the detriment of my other interests.  On the other hand, playing more than a couple dozen times a year and perhaps even (gasp!) practicing once or twice a year might allow me to break out of the mid single digit range I've been at forever and make be a threat to someday play to scratch

[brad_miller]

One thing for sure (IMHO) the destination model is broken regardless of how good the course (Ballyneal??) is at $50,000-100,000 cost. Even if significant portion is refundable it is a matter of solvency. I believe many would be wise to go for 700-800 members long term (it will take time) at a much lower cost structure than hoping to attract 250-300 at a much higher level. Many that can afford the bigger number for a destination club already have one or two. Those that could not/would not spend a large number on such have had much fewer choices. Prairie Club has the right idea, but I suspect it doesn't have a course close (I believe it was a mistake not to have Hanse and company do a big course) to being as good as Ballyneal, but I guess we will just have to wait and see. Ten years ago there was only Sand Hills which was full, today there are many options.

[Adam Clayman]

I'm reminded of the origins of Banff Springs. Built as a destination resort during the Depression the affluent must've felt a need to get away from the cities. While there are no soup kitchen lines compairable today, if things do get much worse that need to escape urban life may just resurface. 

[Adrian_Stiff]

The feedback already (2009) in the UK is that the high profile clubs will do really badly this year. From my clubs perspective we are not getting the corporate bookings with company days entertaining 60+ guests. Plenty of small groups of 8s + 12s representing someones 40th bday party. This pattern seems reasonably uniform, a lot of my friends go away this time every year to Spain or Portugal, but no ones talking about going, they have no money!

[Mark Pearce]

Question for the UK group, what are you current membership numbers for your particular club?  Of the three private clubs that I have belonged to in the States, most of them have either capped or were not able to grow their membership numbers above 475.  Dues of my past and present clubs have ranged from £1000 to £2760 per annum.

Jason,

I'm a member of two clubs.  My home course, The Northumberland has annual fees of £1050 and just short of 600 members (plus 60 junior members (11-18 years)).  I also belong to Crail Golfing Society, which has two courses, 1500 members and fees of £310.  Of those 1500 members the majority (including me) do not live locally.

[Mark_Amundson]

I have enjoyed the comments so far and the opinions of those who have posted.  As you might guess, I am pro destination golf because I believe golfers will continue to travel and search out new and unique offerings.  The economy is certainly a head scratcher right now but I also believe that will straigten out in time.  Not everyone is able to join clubs but the number of rounds at Bandon seems to support the idea that people are still traveling and looking for various experiences.  At The Prairie Club we have chosen a model which Brad seems to agree with, one of lower up front membership deposits and plans for a large number of members.  We are also going to available to the public so that everyone who would like to come and experience The Prairie Club can.  Brad, I hope you will come to The Prairie Club and experience it for yourself before you pass judgement about the quality of the courses and the quality of the design by Tom Lehman and Graham Marsh.

Chris, thanks for your thoughts and if you make it to your destination club 6-7 times per year you are a frequent user compared to what I have seen.  Obviously for people who decided to join a destination club there are many factors that impact how frequently they make it for a visit.  I would suggest that the average member will frequent their destination club 3-4 times per year.  If every member of a destination club made it 6-7 times per year the club would do very well.  As every golf course, public or private, knows it is the use of the club or course that determines if it is financially viable.  For destination clubs it does not matter so much how many members you have, it matters how frequently those members come, how many guests they bring when they come, and how many days they stay each visit.  As opposed to the "typical" local club who runs their budget on dues charged to members, destination clubs run their budgets on user fees such as lodging revenue, F&B revenue, guest greens fees, merchandise purchases, etc.  This reason that most destination clubs charge a lower annual dues fee is because they know the members will not use the club as frequently as at "typical" clubs and they also are charging for lodging etc.

2009 will be an interesting year to say the least.  I for one hope that the economy turns the corner, I do believe people will still travel for golf (albeit maybe less frequently) and I do believe that people will continue to gravitate towards unique offerings.  I guess only time will tell.

[Peter Nomm]

I think people will continue to pay for "unique" experiences, such as Sand Hills offers.  The guests are the ones that "pay their bills", so it bodes well for them even in this downturn.

I think this is the brilliance of their business model - and it sounds like the Prairie Club (Mark, correct me if I am wrong) is employing a similar concept.  Sand Hills dues are VERY low - the guests pay a lot to be there, eat there, stay there, and shop there. 

At the club I manage we have utilized to some extent this philosophy too.  We have not raised cart fees or family guest rates for 8 years, but have raised reciprocal guest rates (ie. unaccompanied guests from other clubs) significantly.  I love the concept of taking money from non-members to pay for our club's bills, and in many circumstances this can work.  Our dues have remained quite level over the years even with a small number (less than 200) of members. 

If Mark can capture the right kind of guest - especially those that appreciate the "experience" and treat the opportunity as a privilege, then it too can be successful.  When I went as a guest to Sand Hills it was clear both from the host member and the booklet on the bedside table that my proper behavior was a must.  It is not always easy to identify this in advance, but Sand Hills creates this culture that we are guests in their community and hopefully the Prairie Club will do the same.  In my opinion this is a key element!  The members of the club really don't care that a lot of the players on "their" course are guests as long as they treat the place with respect. 

Happy members + happy guests (paying $$$) = Success

[Jim Nugent]

I for one hope that the economy turns the corner...

That is the key issue.  Afraid I'm not as optimistic as you are.  As you say, only time will tell. 

[Carl Nichols]

Mark:

I have given serious thought to joining a second club, but haven't for a few reasons, the biggest of which is that I can't pull off more than 3 golf-specific trips per year, and with all of the places in the world I haven't yet played, I can't see locking myself into a specific club.  I could imagine this changing as my kids get older, but right now it doesn't seem to make sense.  It's the same reason I wouldn't buy a vacation house at this point in my life.

A few other random thoughts.  Because I live in Washington, DC, I'd prefer my second club to be somewhere I could play in the winter; I don't see belonging to two clubs that are both closed at the same time.  I'd also prefer it to be pretty close to a decent-sized airport, preferably one with direct flights from DC.  And though I don't know enough about the Prairie Club to know how open to the public it will be, I'd be very reluctant to pay anything resembling a substantial initiation fee to join a place that I could play by simply picking up the phone. 

Having said all that, there are a bunch of clubs (I think you can guess which ones) that I would absolutely, positively join tomorrow if I were lucky enough to be invited, even if they don't fit within those preferences.  Or at least I'd try my hardest to sell doing so at home.  

Carl

[Tommy Williamsen]

 

Chris, thanks for your thoughts and if you make it to your destination club 6-7 times per year you are a frequent user compared to what I have seen.  Obviously for people who decided to join a destination club there are many factors that impact how frequently they make it for a visit.  I would suggest that the average member will frequent their destination club 3-4 times per year.  If every member of a destination club made it 6-7 times per year the club would do very well.  As every golf course, public or private, knows it is the use of the club or course that determines if it is financially viable.  For destination clubs it does not matter so much how many members you have, it matters how frequently those members come, how many guests they bring when they come, and how many days they stay each visit.  As opposed to the "typical" local club who runs their budget on dues charged to members, destination clubs run their budgets on user fees such as lodging revenue, F&B revenue, guest greens fees, merchandise purchases, etc.  This reason that most destination clubs charge a lower annual dues fee is because they know the members will not use the club as frequently as at "typical" clubs and they also are charging for lodging etc.

 

Mark, I can't imagine getting to my destination club more than two or three times a year.  Although when I go it is usually for a week.

[Mike Bowline]

This has been an excellent thread with thoughts about the future of the game in private, public, destination etc arenas.

I have been fortunate to belong to several mid-level clubs and my decision to join a club vs. continue to play public golf was based on two things: cost-per-round (I was naive) and the benefit of not having to put up with boorish public golfers. Snobbish I know, but the truth.

After joining a club, my cost per round was actually higher than when I was playing public golf, but my enjoyment factor (difficult to quantify) was high enough to support the higher cost per round. I then discovered the benefits of networking, new friendships, and other "club" benefits which made the club the way to go.

Having said the above and at one time thinking I could never go back to public golf, I have now indeed moved my family away from where I lived and belonged to a club. l had to drop my club membership and I am now once again playing public golf in the USA. I certainly miss the benefits of a club and i look forward to the time when my personal situation is settled enough to allow me to again join a club.

[Frank Sullivan]

There is a large housing development in Florida which built a private golf course and hoped to sell houses because of the course, however, they have not sold one house and the course is now open for public play.  It doesn't look good for private or public clubs.

I also imagine Rick is talking about Sugarloaf Mountain.  There are two houses built at Sugarloaf, and they are both Model Homes.  Sugarloaf is an interesting case...IMO, it will not be developed (community-wise) for some time due to it's awkward location...Orlando is spreading west toward Davenport and develpment there is still somewhat consistent even in this crazy market.

If it were in Tampa or Orlando, it would do very well right away, but it is in the middle of nowhere...literally...1:30 from Tampa and 50 minutes from Orlando, at least.  There isn't a quick way to get to Minneola, FL...which is also an issue.  I play there at least 4 times a month and I love it...I hope C&C and the investors anticipated a slow start, and that they are in for the long haul...

One of the reasons I joined Sugarloaf Mountain was for the reciprocal playing privileges at Southern Hills Plantation Club, which is a wonderful course much closer to Tampa...(they just played a late stage of Q-School there, which was enjoyable to watch...for myself at least, probably not for the players:)

Southern Hills Plantation is another community which is slowly developing...IMO, due to its' location in Brooksville...

I know location isn't the only factor here, but it seems to be a huge one in the case of these two courses.

Great thread, BTW

[Mark_Amundson]

Tommy, if you go to your destination club for a week at a time I would guess you are a very atypical guest.  Most of my members at Sutton Bay come for 2-3 days.  It would be much easier to staff and budget if most members came for a longer stay but in this day and age it does not seem like that is the norm.  Carl, I understand your comment about not joining a club that you can call up and get in to.  The Prairie Club will allow public play but the rates will obviously be higher than they will for members and their guests, we will have lodging reserved for members/guests so they can get a room.  This is a new model to my knowledge and it will be interesting to see how it works and how it is perceived.  Our feedback to date has been good and we have a number of people who have already joined.  We also have some future plans for the club (if we meet certain goals) that will make it even a more enjoyable place for members and the public.

[Joel Zuckerman]

I would suggest that the average member will frequent their destination club 3-4 times per year.  If every member of a destination club made it 6-7 times per year the club would do very well. 

FWIW--I am a localaized member of a national, I suppose one could call it a destination, club. (it meets all the criteria in this thread) I was once told by a higher-up that the average member at this club only plays 3 rounds per year, not 3 visits per year.