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Jason Connor

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #200 on: January 14, 2010, 04:31:05 PM »
I think the right way to look at it is simple:

It seems unfair to want to join a club and pay for all things a la carte.

I'm a firm believer that when you join a club, you aren't paying for golf -- you are paying so others CAN NOT golf on your course.  You are paying a premium for accessibility -- accessibility not found in the public courses.  Some members just have the ability to take advantage of that accessibility more than others.  At the same time, I'd argue that the accessibility means MORE to the members who cannot golf as much.

You can't really have it both ways.



We discovered that in good company there is no such thing as a bad golf course.  - James Dodson

Roger Wolfe

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #201 on: January 14, 2010, 05:02:50 PM »

Unfortunatley, if initiation fees are used to subsidize dues, the ave. memeber isn't aware of it (or if they are - to what extent). 


We strictly separate entry fees and operations.  Entry fees are used to fund capital (current year or principal from past year's).  Contracted P&I debt service is funded by operations (dues, golf fees, f&b).  Dipping into your entry fees to fund operations is risky business.

Adrian_Stiff

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #202 on: January 14, 2010, 05:42:05 PM »
Adrian - I agree with what you say but do not know one private members club - no VAT, owned by the members - in the UK that follows this model.
Mark -There are a few around Bristol that have just started it, more will follow soon I think. They call it flexi-play. I think Shirehampton & Chipping Sodbury started it last season.
A combination of whats good for golf and good for turf.
The Players Club, Cumberwell Park, The Kendleshire, Oake Manor, Dainton Park, Forest Hills, Erlestoke, St Cleres.
www.theplayersgolfclub.com

Patrick_Mucci

Re: How will your club survive in 2010?
« Reply #203 on: January 14, 2010, 06:08:59 PM »

Pat: My answer is not theoretical.


Bruce,  Here's what you posted and what I was commenting on.

Quote
[/color]

1. Land cost is $0 or close to it.
'
How can you get your land costs to zero ?
They are what they are.
Clubs can't write off or dismiss their acquisition costs


2. Construct a "looks difficult but plays friendly modest course which  is inexpensive to maintain course which permits walking, hand carts (trolleys) and powered carts for those who want them.

Could you provide some examples of clubs in the U.S. that fit this mold ?


3. Small clubhouse with minimal staffing that offeres breakfast, lunch and afterround coctails.  No dinner of fancy menu.  The mark-up on breakfast sandwiches, hot dogs , beer, nachos, etc is greater percentage wise than on fine dining.

Again, the physical plant is what it is, as are many of your fixed costs such as taxes, ect., etc..
Clubs can't simply reinvent themselves as they'd like to be, they have to deal with the reality of what they are


4. Price play at 95% of the going market and you have a winner

I understand shadow pricing, but, that often leads to a bidding war with your peers, that eventually ends up with everyone losing money in the fight for the same members


The question posed was : How do make the club survive in 2010?  I know what I typed is the correct answer, for most facilities, from a strictly business perspective, if it was my money and I was running the show and calling the shots.  When you have an equity membership, there are many"owners" who all have an opinion on how to best run the show.  Different ball of wax. 


Agreed.  This was the context in which I was discussing the topic


When and if times get tougher, many of the equity clubs will look at some of the suggestions/ideas I made and perhaps implement some to get out of the "death spiral" described by another gentleman earlier.


Unfortunately, many won't start contemplating adjustments until critical mass is reached.
Most clubs tend to be reactive rather than proactive, since most, including myself, naturally resist change


With my former employer, we took over running many unprofitable golf ventures to cut the operating losses thru what I described, stabilized the asset's cash flow and brokered a transaction to sell the asset to a 3rd party for the Owner.  That's what the business model for the company was and what we did, with some degree of success.


When you have absolute authority you can do as you please, but, member owned clubs are more unwieldy


This business model will be one to replicate again shortly as the banking and credit industy will be holding and trying to manage golf assets they have no idea what to do with.

That's another issue altogether.


Patrick_Mucci

Re: How will your club survive in 2010?
« Reply #204 on: January 14, 2010, 06:15:11 PM »

Many clubs run fatter than most realize.  

Sean... you have no idea how FAT some clubs are in the US.  Its offensive and sad to watch a club go down the drain when they have a GM, an Asst GM, a Clubhouse Mgr, a Sales & Marketing Director, a Human Resources Director, a Controller, a Purchasing/Inventory Manager... the list goes on.  

Roger,

You hit on a valid topic.
Unfortunately, because of its size, it's the Green's Budget that takes the most hits because of its size and visibility.

Members aren't staying and prospective members arean't being attracted to the club because of the administrative staff or tuna salad, yet, in many cases, it's the Green Budget that takes most, if not all  of the hits


Shocking and a big reason why so many US clubs are in trouble.

Jeff Goldman

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #205 on: January 14, 2010, 09:08:00 PM »
Have the "user fee per round for private clubs" folks considered the fact that the marginal cost of an additional round is zero? If other activities at the club have any marginal profit at all, regardless of whether they are overall money losers, it makes no sense to charge per round.

Patrick, you're dead on about the "Fat". We did a huge amount  of planning and analysis in preparation for the season just past, and the resulting operating surplus has been just stunning. Course, good weather and low fuel and other input prices helped too.  
« Last Edit: January 15, 2010, 03:22:48 PM by Jeff Goldman »
That was one hellacious beaver.

Sean_A

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #206 on: January 15, 2010, 04:15:22 AM »
What I don't think has been discussed are non-local / National memberships.  My other 2 clubs are National memberships, both great courses.  To me, an affordable National membership is a no-brainer for a club.  It's virtually free revenue, the member is seldom around and when they are they usually have guests in tow, stay in lodges/cabins and eat exclusively at the club when visiting....their per visit revenue MUST be greater than a local member.  Their guests look like Wang buying everything up in the pro shop too.  Drop the ridiculously high National member initiation fees to something reasonable (unless you're a 100% destination club with few locals) that people can justify.  The annual dues to me are no different than justifying vacation expenses....high initiation is a sticking point.  I do realize the ability for lesser known clubs to attract non-local members is less than more prominent clubs, but the supply/demand curve has to meet somewhere.  

Clint

Yes, I am always amazed at clubs that are counting their pennies but then don't have a wide variety of memberships and out of town memberships are an easy target.  I tried to join my boyhood club a few years back, but they didn't offer an overseas membership.  I was welcome to pay full whack though.  Really silly decision-making.  I notice that Chappers has been a one man wrecking crew in signing up Yanks to overseas memberships at Deal.  I strongly suspect the price is cheap enough that these guys don't have to worry too much about where to find this money AND it isn't so much that they feel the need to play the club for most of their games even if they are in country.  I can't see where this a bad deal for the club.

Ciao   
New plays planned for 2024: Nothing

Adrian_Stiff

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #207 on: January 15, 2010, 08:44:07 AM »
Have the "user fee per round for private clubs" folks considered the fact that the marginal cost of an additional round is zero? If other activities at the club have any marginal profit at all, regardless of whether they are overall money losers, it makes no sense to charge per round.

Patrick, you're dead on about the "Fat". We did a huge amount  of planning and analysis in preparation for the season just past, and the resulting operating surplus has been just stunnung. Course, good weather and low fuel and other input prices helped too.   
Jeff - All depends how you see the accounts: Cost of running course divide by number of rounds or Cost of running course divide by members. The point really is shoud a 5 time user pay the same as a 100 time user, if u answer yes (and I do understand the private club situ) then the lower users utimately dont join and a ot of the new brigade are much more nomadic in their play than years ago... hence the death spiral. The pattern willl shift more towards Bruce Katona's mode which largely is tried and tested and more importantly buisnesslike in today's market place.
Thats never to say ALL clubs will die or there are not things that can be done to lighten the load at existing situ's. Over management and situations where it costs $50 at certain times to serve a $5 sandwich are what needs addressing, but cut the service between 3.00 and 5.00 and that member will yell.
A combination of whats good for golf and good for turf.
The Players Club, Cumberwell Park, The Kendleshire, Oake Manor, Dainton Park, Forest Hills, Erlestoke, St Cleres.
www.theplayersgolfclub.com

Bruce Katona

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #208 on: January 15, 2010, 09:25:25 AM »
Pat: I always appreciate your opinion and you posed good response questions.   I offer the following:

1. Land cost is $0 or close to it - Long term financable Land Lease , not acquisition.  Also brown fields or a redevelopemnt site can generally be either leases or acquired for very little cost.

2. Construct a "looks difficult but plays friendly modest course which  is inexpensive to maintain course which permits walking, hand carts (trolleys) and powered carts for those who want them.
  - two very good local examples are Black Bear in Hardyston & Twisted Dune.  The cusatomer feels good at the end of the day and will come back.  This works regarless o the course being public or private. I'm sure you can also some up with some others.

3. Small clubhouse with minimal staffing that offeres breakfast, lunch and afterround coctails.  No dinner of fancy menu.  The mark-up on breakfast sandwiches, hot dogs , beer, nachos, etc is greater percentage wise than on fine dining.
 - see the answer above. 


4. Price play at 95% of the going market and you have a winner
  You're spot on with this answer, but adjusting pricing is part of the market.  If you offer an additonal service or include a hot dog & soda at the turn for the same price, you have effeectively lowered your price to 95% of the market.  Value added for a set price paid.
Including range balls and locker fees as part of annual dues does the same thing on the private side.  Nickel & dime charges on the private side irritrate members.

Patrick_Mucci

Re: How will your club survive in 2010?
« Reply #209 on: January 15, 2010, 10:56:22 PM »
Pat: I always appreciate your opinion and you posed good response questions.   I offer the following:

1. Land cost is $0 or close to it - Long term financable Land Lease , not acquisition.  Also brown fields or a redevelopemnt site can generally be either leases or acquired for very little cost.

For a new club I that makes sense, but, an existing club is stuck with the cards they were dealt.


2. Construct a "looks difficult but plays friendly modest course which  is inexpensive to maintain course which permits walking, hand carts (trolleys) and powered carts for those who want them.
  - two very good local examples are Black Bear in Hardyston & Twisted Dune.  The cusatomer feels good at the end of the day and will come back.  This works regarless o the course being public or private. I'm sure you can also some up with some others.

I always thought that Twisted Dune had enough perimeter quirkiness to appeal to a broad spectrum of golfers.
But, again, you're talking about a new course and I'm referencing existing courses which are hard pressed to reinvent themselves architecturally


3. Small clubhouse with minimal staffing that offeres breakfast, lunch and afterround coctails.  No dinner of fancy menu.  The mark-up on breakfast sandwiches, hot dogs , beer, nachos, etc is greater percentage wise than on fine dining.
 - see the answer above. 

Again, this is only possible on a new course, not an existing facility.



4. Price play at 95% of the going market and you have a winner
  You're spot on with this answer, but adjusting pricing is part of the market.  If you offer an additonal service or include a hot dog & soda at the turn for the same price, you have effeectively lowered your price to 95% of the market.  Value added for a set price paid.
Including range balls and locker fees as part of annual dues does the same thing on the private side.  Nickel & dime charges on the private side irritrate members.

I agree on the aversion to nickel and diming golfers, private or public.
The problem with great range balls is that they end up in a lot of golf bags and on the golf course, but, as a range rat, boy, do I love great range balls.


Mike Sweeney

Re: How will your club survive in 2010?
« Reply #210 on: October 16, 2010, 05:35:27 PM »
With the politics over on The Dormie Club thread, this seems like an interesting thread to update.

My $0.02, the definition of a private club continues to evolve but clubs seem to be surviving although obviously not thriving?

JC Jones

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #211 on: October 16, 2010, 07:55:20 PM »
Provide a golf only experience with a great course and a lodge that has big ten football on the big screen and James Taylor on the CD player. 
I get it, you are mad at the world because you are an adult caddie and few people take you seriously.

Excellent spellers usually lack any vision or common sense.

I know plenty of courses that are in the red, and they are killing it.

Jud_T

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #212 on: October 17, 2010, 08:38:46 AM »
Provide a golf only experience with a great course and a lodge that has big ten football on the big screen and James Taylor on the CD player.  

Agreed-but James Taylor?  We had a live version of the Michigan fight song on at the range last weekend.  Of course maybe we would have been better off with the somnambulance of JT.....
« Last Edit: October 17, 2010, 08:40:20 AM by Jud Tigerman »
Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Steve_ Shaffer

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #213 on: October 17, 2010, 09:33:00 AM »
Here's an interesting article about a "family club" that is doing very well in Phoenix. Moon Valley CC celebrates its 50th year:

http://www.azcentral.com/sports/golf/articles/2010/10/12/20101012moon-valley-country-club-50th-anniversary.html
"Some of us worship in churches, some in synagogues, some on golf courses ... "  Adlai Stevenson
Hyman Roth to Michael Corleone: "We're bigger than US Steel."
Ben Hogan “The most important shot in golf is the next one”

Roger Wolfe

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #214 on: October 17, 2010, 10:05:17 AM »
"While under Solheim's control, Moon Valley updated, renovated and expanded practically all of its amenities. The swimming pools and fitness center were built, the clubhouse and aquatics center were expanded and the tennis courts were remodeled. The golf course was closed for 14 months at the end of the last decade as it underwent a complete renovation."

Sounds like the relationship with Ping was a wonderful thing.  Let's see how things go when everything has to be paid from the members' pockets....  I would be interested to find out what has been "renovated and expanded" since 2004!  :)

JC Jones

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #215 on: October 17, 2010, 11:55:43 PM »
Provide a golf only experience with a great course and a lodge that has big ten football on the big screen and James Taylor on the CD player.  

Agreed-but James Taylor?  We had a live version of the Michigan fight song on at the range last weekend.  Of course maybe we would have been better off with the somnambulance of JT.....

Who won the annual MSU/UM outing at KC?  I'm telling you, watching Wisky beat OSU with the steamroller blues and a bottle of beer is a great way to spend a night in southern New Jersey.
I get it, you are mad at the world because you are an adult caddie and few people take you seriously.

Excellent spellers usually lack any vision or common sense.

I know plenty of courses that are in the red, and they are killing it.

Patrick_Mucci

Re: How will your club survive in 2010?
« Reply #216 on: October 18, 2010, 12:34:52 AM »
Eric,

It appears that clubs have/will survive 2010.

The question is, will they survive 2011 and/or 2012.

I see more and more clubs reducing and/or eliminating initiation fees in their quest to get additional dues paying members.

Sadly, I think you'll see more clubs failing in 2011 and/or 2012

Mark Chaplin

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #217 on: October 18, 2010, 01:42:45 AM »
Kevin Cahoon sums it up when he states that some members want high levels of
service but cannot or will not pay for it. I am in favour of those who play the most pay the most.
Cave Nil Vino

Sean_A

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #218 on: October 18, 2010, 04:17:40 AM »
I think Pat is right.  Lowered initiation fees and more closures/conversions to public or semi public.  I would add that reduced maintenance budgets and/or reduced club house hours/service will have to make up the shortfall.  I know many folks in the UK (unless you live around London) have a psychological thing about £1000 dues and will move to cheaper courses when the bill comes.  This is especially true of the tougher courses with aging memberships.  A lot of these guys don't care about the weekly comps and just want a good walk in the park with mates and a bit of competition and are willing to play an inferior course if it means saving £400 a year.  Its a very tight market in the UK and I wouldn't want to own a course and have to rely on it for a main income.     

Chappers - If you want to charge a guy more for showing up every week to play he may move on to somewhere else.  This is one of the main reasons a lot of people join a club!  Or, if you start setting up categories of players based on how many games they will play a great many will opt for the lower number of games categories - that is playing with fire and could easily backfire. 

Ciao

     
New plays planned for 2024: Nothing

Sev K-H Keil

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #219 on: October 18, 2010, 06:57:48 AM »
Assuming we subscribe to the premise that a golf club should be run as a business, my recommendation is to invest in marketing and sales resources / training. Directors of membership, pro shop staff, etc. can be trained at a very low cost in basic selling skills that yield immediate returns --- shocking how much money is left on the table ('do you want fries with that' --- 'can we regrip your clubs Mr. X?').

Also, I'm surprised that with the emergence of social media, email access of all members, etc. only very few clubs are using their membership base effectively for targeted campaigns (inventory reductions, last minute outings, membership specials). Personalize your communication, make me feel special ... and I will spend.

Steve_ Shaffer

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #220 on: October 18, 2010, 09:22:10 AM »
As Pat and Sean indicated above, the trend is lower or no initiation fees in those clubs that have been hard hit by resignations and/or are struggling for members. In the Philadelphia area, the probable buyer of LuLu has been operating his current club, Blue Bell, as a lower cost annual fee fee club for a few years and has attracted many members from other clubs where the annual dues are higher and former public course players. Also, many clubs are offering weekday only memberships to attract the senior members,twilight memberships and/or limited play social memberships. Anything for cash flow.

As far as initiation fees  are concerned, I recently played golf in a GAP event and was paired with a member from a fairly prominent local club. When asked about membership at his club, he said that they used to have a waiting list but since the economy went south, there were a lot of resignations and the waiting list dissolved. He went on to say that not many prospective members are now willing to pay the 20K initiation fee and the club is decding what to do about lowering the fee. To me it's an easy decision, just follow the Gillette theory: Give away the razors and sell the blades. It's a tough decision for a prominent club to make unless they have a benefactor among their members who is willing to fund yearly deficits.

I don't see many clubs openly admitting a semi-private status. Perhaps that will change.
"Some of us worship in churches, some in synagogues, some on golf courses ... "  Adlai Stevenson
Hyman Roth to Michael Corleone: "We're bigger than US Steel."
Ben Hogan “The most important shot in golf is the next one”

Terry Lavin

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #221 on: October 18, 2010, 10:00:47 AM »
Provide a golf only experience with a great course and a lodge that has big ten football on the big screen and James Taylor on the CD player. 

Sweet baby James?  Aargh!
Nobody ever went broke underestimating the intelligence of the American people.  H.L. Mencken

Bill_McBride

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #222 on: October 18, 2010, 10:13:39 AM »
Provide a golf only experience with a great course and a lodge that has big ten football on the big screen and James Taylor on the CD player. 

Sweet baby James?  Aargh!

It's not a men only club.

Carl Nichols

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #223 on: October 18, 2010, 11:26:31 AM »
The word on the street is that Woodmont Country Club -- a traditionally Jewish, 36-hole facility in Rockville, MD that for many years has hosted a qualifier for the U.S. Open -- has cut its initiation fee in half, from $100,000 (which amazed me) to $50,000 (which puts it below many other clubs in Montgomery County).  I was told that they are a little low on members, and cashflow drove this -- which may be particularly significant for a 36-hole facility.  Note that I have not attempted to verify this information, but am simply relaying what I was told by someone whom I trust (but who is not affiliated with the club).   

JC Jones

  • Karma: +0/-0
Re: How will your club survive in 2010?
« Reply #224 on: October 18, 2010, 12:56:28 PM »
Provide a golf only experience with a great course and a lodge that has big ten football on the big screen and James Taylor on the CD player. 

Sweet baby James?  Aargh!

It's not a men only club.

Look, I can't help it if you guys have no taste.
I get it, you are mad at the world because you are an adult caddie and few people take you seriously.

Excellent spellers usually lack any vision or common sense.

I know plenty of courses that are in the red, and they are killing it.