How will your club survive in 2010?

[JMEvensky]

Clubs are going to have to return to a "golf" oriented business model, at the expense of collateral services, if they intend to survive.

Pat,while I agree with 99.99% of your post,especially reducing bunker maintenance,the above quote is going to present a problem.What you are advocating is to turn "country" clubs into "golf" clubs.That's just not what a lot of people want,IMO--the 1500 people posting here excepted.

The younger family market which everyone is trying to attract frequently has the wife as decision maker.To her,"golf oriented" is a non-starter.Absent ancillary stuff for her and/or children,she's not interested.Moreover,at least in my limited experience,this younger guy doesn't really take golf seriously enough to value a private golfing membership over his wife's objections.He'll play public and join a health club.

The guys most likely to favor stripping a club down to bare golf essentials are the long standing members.They frequently use no other amenity.Again,in my limited experience.

So,you end up with the worst of all worlds--the old guys are willing to pay for anything/everything but use only the golf course.Yet,the new guys you're trying to attract want to use everything but aren't willing to pay enough to support anything.

[PThomas]

so what changes to tax laws, etc. would have to happen for US clubs to be able to function like UK clubs that allow a lot of guest play?

could a club in the US do that now?

[Richard Phinney]

At our club - the seventh oldest in the world - financial pressure has been compounded by the fact that there remain three clubs in town, playing over the same municipally owned lilnks (though managed largely by the clubs).  Logic would have the clubs amalgamate (the clubhouses are side by side) but an understandable pride in the history of each (or simple stubborness) has thus far prevented that from happening. At a club like ours (and I think it is similar in other parts of Scotland), the health of the bottom line depends on the bar takings, and those have been falling as members are less likely to drop into the club for social reasons than they used to.  One strategy that has worked extremely well for us this year is to organise members dinner evenings, when everyone knows there will be a sizeable crowd and a bit of buzz.    That's good news for the caterer, and the bar.   A renewed emphasis on attracting junior members is also under way, and while that may not bring in much revenue I have a hunch it will improve the life of the club.  

The course is managed separately and one of the key issues there are the breaks traditionally given seniors for season tickets.  That's proving a financial drain as the golfing population ages, and I believe there are moves afoot to gradually close the gap between different season ticket rates.

Facilities are adequate but not fancy.  No wating lists. An unpretentious membership (in all 3 clubs) that likes their golf.  A course in good nick.  There are still not that many 20 or 30 somethings joining, even here, and not because the total annual cost of golf is expensive. I think its something even Scots are morely likely do do a bit later in life (and perhaps it has always been thus).  The key is to make sure the club is still there when they reach that age.

 

[Craig Disher]

Brett- UK golfers are the same they want to play their own ball. Foursome golf outside of a competition is almost extinct here in the UK. I can't remember anyone playing alternate shots at our club unless it was a team match or a once a year event and even then we pay greensomes which is where all four players hit a tee shot then you pick your best and play real foursomes from there.

Adrian,
Where is it that you play? At my club most members prefer foursomes - often two-balls on the tee will ask to pair with the following group for a foursome match. The round is faster and more social. We decided a couple years ago to remove the two-ball only restriction since most visitors requested four-ball so one day a week after some member-only times in the morning the course is open for four-ball play. Members grumble about the four-ball day but the revenue is nice - and necessary in these lean times. I don't have first-hand knowledge of other clubs in the area but I do see a lot of foursome play when I visit.

[henrye]

I think many clubs got used to being able to keep dues low with a combination of high initiation fees and selling the course for corporate outings.  Now that both of these income streams have dried up, clubs are being forced to live within their own means.  This means either raise dues or cut services/expenses to survive.  Sad, but true, many lower or fixed income members may be forced out.  But if they can't afford higher dues, odds are they weren't spending any extra money at the club and would be the ones vocally opposing any capital improvement assessment.  I have found that clubs that go the "cut spending"  end up in a death-spiral.  And this is in a normal economy.  In a stressed economy, I would expect things to be magnified.  You may find it harder to bring in new members if things appear "thread-bare".  Additionally, you might even start to see an exodus by more affluent members who can now move up to more stable clubs.  Or "see the hand-writing on the wall" and want to get out while they still can.  These are the members management should be catering to.  They are the life blood to any club.  So, you may find a slimmed-down membership may also be a healthier one.

You may be right, but as a member of a club that lost approx 40 members during the financial meltdown, I'm concerned that my club is taking the stance that you suggest.  Dues & initiation continue to climb.  To me the life-blood of the club is all the members (wealthy ones and less so).  I don't like the idea of a club dedicated to one type of member over another.  All members need to be taken into account.

[Josh Stevens]

Brett- UK golfers are the same they want to play their own ball. Foursome golf outside of a competition is almost extinct here in the UK. I can't remember anyone playing alternate shots at our club unless it was a team match or a once a year event and even then we pay greensomes which is where all four players hit a tee shot then you pick your best and play real foursomes from there.

Adrian,
Where is it that you play? At my club most members prefer foursomes - often two-balls on the tee will ask to pair with the following group for a foursome match. The round is faster and more social. We decided a couple years ago to remove the two-ball only restriction since most visitors requested four-ball so one day a week after some member-only times in the morning the course is open for four-ball play. Members grumble about the four-ball day but the revenue is nice - and necessary in these lean times. I don't have first-hand knowledge of other clubs in the area but I do see a lot of foursome play when I visit.

Yes foursomes is dying and good riddance - still see it in some of the UK clubs, but it is an anachronism. 

[Matt Bosela]

Is "Curling" to private clubs in Canada the same as "Tennis" to private clubs in the USA?

I can play tennis down the street for free.  Can you "curl" for free in Canada?

Roger,

Both Tennis and Curling would qualify as added benefits to the membership but that's about the only thing they have in common.

It is much more costly to maintain a curling rink than a tennis court.  Cooling systems, power generators, ice technicians all cost quite a bit of money - you definitely can't curl for free!

Not my sport though   Never tried it...can't understand the scoring or strategy.

[Adrian_Stiff]

Brett- UK golfers are the same they want to play their own ball. Foursome golf outside of a competition is almost extinct here in the UK. I can't remember anyone playing alternate shots at our club unless it was a team match or a once a year event and even then we pay greensomes which is where all four players hit a tee shot then you pick your best and play real foursomes from there.

Adrian,
Where is it that you play? At my club most members prefer foursomes - often two-balls on the tee will ask to pair with the following group for a foursome match. The round is faster and more social. We decided a couple years ago to remove the two-ball only restriction since most visitors requested four-ball so one day a week after some member-only times in the morning the course is open for four-ball play. Members grumble about the four-ball day but the revenue is nice - and necessary in these lean times. I don't have first-hand knowledge of other clubs in the area but I do see a lot of foursome play when I visit.

The Players Club, nr Bristol. Craig are you referring to a foursome as four players? or As in the alternate strokes? Foursomes golf strictly is the alternate shots, a foursome is kinda the American version of our 4 ball better ball. I dont know of anyone that really likes foursomes, its played at county level and in Ryder & Walker cup, we also play it in inter-team matches but some players cant be arsed to drive 30 miles for what amounts to half a game.... back to the time issue again.

[JC Jones]

Clubs are going to have to return to a "golf" oriented business model, at the expense of collateral services, if they intend to survive.

Pat,while I agree with 99.99% of your post,especially reducing bunker maintenance,the above quote is going to present a problem.What you are advocating is to turn "country" clubs into "golf" clubs.That's just not what a lot of people want,IMO--the 1500 people posting here excepted.

The younger family market which everyone is trying to attract frequently has the wife as decision maker.To her,"golf oriented" is a non-starter.Absent ancillary stuff for her and/or children,she's not interested.Moreover,at least in my limited experience,this younger guy doesn't really take golf seriously enough to value a private golfing membership over his wife's objections.He'll play public and join a health club.

The guys most likely to favor stripping a club down to bare golf essentials are the long standing members.They frequently use no other amenity.Again,in my limited experience.

So,you end up with the worst of all worlds--the old guys are willing to pay for anything/everything but use only the golf course.Yet,the new guys you're trying to attract want to use everything but aren't willing to pay enough to support anything.

I disagree and will side with Pat on this issue.  Most people outside of a city center, who can afford a country club membership already have pools and likely they have tennis courts and/or pools at their health clubs.  Moreover, they don't eat at their club except lunch/beers/snacks after a round.

The country club just doesn't serve the same purpose any more for most people, therefore, it should go back to the one thing it has a competitive advantage in and that is the golf.  Food is a losing business, just ask most restaurants that survive on the bar and health clubs are so ubiquitous these days that the time spent at the country club is very little, unless golf related.

[JMEvensky]

JC Jones,I believe I said that golf-only was,in fact,a reasonable way to go for the existing members.However,such a club will have great difficulty in attracting the younger guy.

Absent fresh blood,the club will wither away.The golf-only model is only attractive to those for whom golf is very important.That rules out a huge percentage of the younger market.

Your experience on member-owned clubs Boards may be different however.I can only relate my own.

[Dan Boerger]

Curling works in Canada simply because more people do it there than they do in these United States.

Also, given the longer winter season, it fits very well with clubs that want to offer their members recreational opportunities. For many clubs in Canada, it's a necessity to maintain interest and revenue. (I attended a bonspiel or tournament at a very well known club in Boston and the bartender told me no one supports the beverage sales better than curlers!)

Curling is a lot like golf, IMO. It's a skill sport and just about anyone can play or compete. However, one does not become a good curler quickly. I've never gone to a bonspiel where a team with less than 5 years experience won it. In fact, many bonspiels now are for 5 year and under curlers just so new competitors don't get discouraged. It's also a lot like golf in that good sportsmanship is paramount and an open takeout to win a game or tournament in the final end becomes as difficult as a 3 foot putt on the 18th hole to do the same.

[Jud_T]

Guys,

Tennis is a dying sport...Too hard on the joints and you have to play folks of similar ability.  Give me a cooler with some cold beer and sandwiches, and great golf at a fair price...

[Roger Wolfe]

Pat,while I agree with 99.99% of your post,especially reducing bunker maintenance,the above quote is going to present a problem.What you are advocating is to turn "country" clubs into "golf" clubs.That's just not what a lot of people want,IMO--the 1500 people posting here excepted.

[/quote]

First of all... this is a great thread and all the posts are great to read...

I will side with Pat as well... remember you can get "family activities" somewhere other than the club.  I do think a swimming pool is important plus as many couples/family golf/pool events as possible.  You can play tennis or have a picnic or go hiking or play charades at the local park.  Its hard to find a public swimming pool that is not crowded, loud, or beer/margarita-free.  Also, its tough to drop off your family or your kids off at the local public pool while you and your wife play golf.  When the dues get out of hand, concentrate on the CORE amenities you offer that noone else can.  However, you need to remember that most of these "family events" do not generate enough revenue to pay for themselves.  Can you afford to let your golf course suffer because funds are being diverted to the family activiites?  Would a member join your club if you did not have a golf course?  Can you afford to raise dues just to subsidize these activities?  If you eliminated the golf course, would folks still remain as social members?  Finding the right balance is an agonizing and difficult process.  HOWEVER, if your mission states it and you can prove the bulik of your members joined because of the FAMILY activities... you need to support them.

Also... initiation fees should not be a consideration for an operating budget unless the club is in dire financial straits.  An initiation fee is a guage of your club's market value similar to stock price.  If your stock price is too high your membership and revenue will be too low.  If you dues are too high, your membership and revenue will be too low.  It reminds me of home prices in relation to mortgage interest rates.  Interest rate (dues) go up... prices (initiations) go down.  If you don't have new members joining... and your resigning members are not being replaced... and your dues are skyrocketing because you have fewer members... its time to look at alternatives.  I am a fan of low initiation, 1 or 2 year "associate member" program to prop up your dues structure for a short time when the economy is bad... but make sure to retain control over the renewal of these memberships should a strong economy return.  Make sure you can always tell the "associate members" to pony up and become a full member or resign in the short term.

Keep your initiation fee as high as possible... but make every effort to keep your dues as low as possible.  That is the best situation!

If you complain about the local club's initiation fee but the club is in good financial shape with a strong membership... then keeping "your kind" out is exactly what they have in mind.  You might be the greatest guy in the world, but if you don't think the club is worth the initiation fee you paid... you are going to be an "unhappy member."

[K. Krahenbuhl]

Money is not the issue at Newport cc, but maybe some clubs would be better to follow them and only have a light lunch and no dinner. I believe the food is still brought in from a local caterer, so you eliminate the food waste and paying a chef and cooks.

I thought Newport was a great model.  During my visit last summer we finished our round, went upstairs to clean up in the locker room, ordered a sandwich at a window which was prepared by a catering company working out of a van I believe, and dined while sitting on a leather sofa in the bar.  Simple and perfect.

I'm a young, single golfer and am a member at two clubs.  I'm probably not a good representation of my demographic, but golf is what I really enjoy, so I splurge on it.  I don't dine at my home club as much as I would like to, but eat breakfast and lunch there from time to time.  I do spend a lot of time and money at the bar.  We don't have any tennis or fitness at the club.  We do have a pool that is open a few months out of the year and gets a fair bit of use.

My second club has a pool and tennis, but I've never even visited the facilities of either.

[Dan Boerger]

I belong to a club that has a very active pool and the membership, in large part, really supports it.

But, like so many things, there's more to it than may meet the eye. The pool is clean. There are always sufficient towels (no small issue). It's very well monitored (kids have lots of fun but they don't run wild). There's a strong swim team (any child will automatically make the team) Swim instruction is excellent and the food and beverage service that supports  the pool area is well run and priced fairly.

Not all club pools and management are equal.

[Roger Wolfe]

I belong to a club that has a very active pool and the membership, in large part, really supports it.

But, like so many things, there's more to it than may meet the eye.

The pool is clean. - A MUST!

There are always sufficient towels (no small issue). - DO YOU REALLY NEED TO SUPPLY TOWELS?  LOTS OF SAVINGS THERE.

 It's very well monitored (kids have lots of fun but they don't run wild). - A MUST!

There's a strong swim team (any child will automatically make the team).  Swim instruction is excellent - USUALLY PAID BY PARTICIPANTS

food and beverage service that supports  the pool area is well run and priced fairly. - POOL SNACK BAR ORIENTED F&B IS AN EASY MONEY MAKER.  NO WAITSTAFF - NO WASTE.  ONE OF THE FEW PROFITABLE MEMBER F&B AREAS AT ANY CLUB.

Not all club pools and management are equal. - AGREE, BUT THE COST (ASSUMING ITS BUILT) IS RELATIVELY LOW.  OUR'S IS 35K PER YEAR NOT COUNTING THE SNACK BAR CONTRIBUTION.

[Dan Boerger]

Roger -- Very good points!

Towels ... once I got used to having them there, it sure is nice, but you're right not a necessity. It also leads to a more uniform look for the entire area. Not a big thing to me, but it has been brought to my attention. 

Swim Team ... Indeed it is paid for on an "as used" basis, but the club did a very good job of getting a terrific team coach (I'm sure he wasn't the cheapest guy around), with some real experience. Kids are kids, but we have a strong team primarily because of the coaching. Not all clubs with pools would even consider this a priority.

Snack Bar ... Excellent input on the inventory and waste. But once again, I've been to some local clubs and pools where the dining areas aren't kept clean and the food choices are abysmal. An easy fix, one would think, but often overlooked.

I should also note the club has family happy hours at the pool on Fridays and a few movie nights (big screen, float in the pool while you watch a movie) ... all well attended.

Bottom line, given how happy we are with the pool, my wife and I are not even considering building one at our house.

[Tommy Williamsen]

My club has cut expenses by a couple hundred thousand dollars. Most of that came from elimimnating the position of Director of Golf.  We also were assessed $2500.  We have lost 90 members in the past two years and have picked up about 60, so we are down.  We have had a couple of programs that have brought in new members by making the initiation fee payable in installments.

[Bill_McBride]

Chip,

get the kids into golf, then you can justify having your cake and eating it regularly!!

What I did.  And my wife learned to play too.  Now we pay $600-700 a month all in with nickle and dime charges.  Since my wife plays 3x a week and I play 1-1/2x a week, that means our average cost per round is $28-32 with walking any time and some lunches and bar tabs included.

It's like buying a house for young families, you have to get in the game and then it's easier.  Getting in is the problem.

Of course initiation fee at every club I ever joined was somehow $5,000 and that's not easy these days.  Although there may be some very good clubs that have slashed their joining fees.

[Patrick_Mucci]

Clubs are going to have to return to a "golf" oriented business model, at the expense of collateral services, if they intend to survive.

Pat,while I agree with 99.99% of your post,especially reducing bunker maintenance,the above quote is going to present a problem.  What you are advocating is to turn "country" clubs into "golf" clubs.  
That's just not what a lot of people want,IMO--the 1500 people posting here excepted.

J, I agree completely, BUT, what people want and what people can afford are two different things.
Full service clubs are a luxury and costly.
I believe the core value at a club is THE golf course, not the collateral benefits.
Everyone would like to retain all of the collateral benefits, but, the market is indicating that they can't afford them, hence, they'll have to alter the business and/or operational model until such time as the environment/economy gets better, and I don't see that happening for quite some time.

The younger family market which everyone is trying to attract frequently has the wife as decision maker.  To her,"golf oriented" is a non-starter.  Absent ancillary stuff for her and/or children,she's not interested.  Moreover,at least in my limited experience,this younger guy doesn't really take golf seriously enough to value a private golfing membership over his wife's objections.  He'll play public and join a health club.

I don't accept that premise nor do I accept your conclusion
I don't see Country clubs as toddler friendly, nor do I see them as the focal point of a young couples life.
Over the last decade or so, the trend for the younger member is to tee off at 7:00-7:30, finish by 11:00 - 11:30 and head home for the day.

The guys most likely to favor stripping a club down to bare golf essentials are the long standing members.They frequently use no other amenity.Again,in my limited experience.

That's just the opposite of what I see.
The older members aren't teeing off at 7:00 am and running home.
They're teeing off at 8:00 -9:30, playing golf, staying for lunch, watching TV, playing cards or more golf.

So,you end up with the worst of all worlds--the old guys are willing to pay for anything/everything but use only the golf course.


That's not what I see, it's the old guys that play golf and have lunch and dinner at the club, not the young members.

Yet, the new guys you're trying to attract want to use everything but aren't willing to pay enough to support anything.

Experience over the last decade at a number of clubs I'm familiar with has shown us that the utilizaton patterns don't fit your model.
The young members come early, play their golf and leave, without using the dinning services.
They do attend special events, and Sunday Bar-BQ's with their family because those tend to be bargain nights.
But, the revenue stream, and utilization patterns are down substantially compared to older, long time members.

While every club is unique, at the clubs I'm familiar with, this pattern seems fairly common.

One of the interesting side effects of the changing use patterns is that many clubs began to run afoul of local disturbing the peace ordinances because, in order to accomodate 7:00 am play on Sat and Sun, greens had to be mowed at 5:30 - 6:00, and neighbors complained to the police and the clubs were prohibited from mowing that early

[Patrick_Mucci]

JC Jones,
I believe I said that golf-only was,in fact, a reasonable way to go for the existing members.
However, such a club will have great difficulty in attracting the younger guy.

Absent fresh blood,the club will wither away.
The golf-only model is only attractive to those for whom golf is very important.
That rules out a huge percentage of the younger market.

Your experience on member-owned clubs Boards may be different however. I can only relate my own.

JMEvensky,

You're correct, we can only relate our own experiences at individual clubs.

I've had the opportunity to review the budgets and the P&L statements from a number of clubs over the years, in addition, the accounting firm that does the accounting for a great number of clubs has provided us with a summary report, on a line item basis, comparing the club/s I'm familiar with, to the rest of their client base.

I don't think I'll be contradicted when I say that after looking at the restaurant (food & beverage) department, there's not one club that made a profit purely from the restaurant operation.  And, that the more meals served, the larger the loss for that department.
Hence, cultivating more utilization, HURTS the bottom line.

If the restaurant's utilization was so attractive for members, young and old, you wouldn't have to have a restaurant minimum, which is almost mandatory at clubs today

[Paul Stephenson]

FYI the average UK club will have 6 green staff, a secretary and assistant, bar manager and full time assistant, chef and full time server and a professional paid a "retainer". Obviously there will be part time cleaners, bar staff and kitchen/serving staff but I'd guess around 16 full time equivalents servicing 500-600 members and guests/visitors. In Chicago I guess double the staff service 250-300 members and no visitors at the average CC. Now it's easy to see why we average $1200-$1600pa in fees compared to $10000 or more.

Also visitor green fees at the average club will be between 10-25% of income not a massive amount

I can give you a comparison from my club.  We have 524 members and employ 104 hourly (part-time) and 6 full-time staff (GM, Dir. of Golf, Superintendent, 2 office staff, 1 maintenance person).  The facilities are not expansive: no tennis, pool, fitness, or formal dining.  A 5:1 member to staff ratio really surprised me.  Is this in line with other clubs in North America?

Another question.  Have fertilizer and pesticide costs really gone up 147% and 88% respectively over the past 3 seasons?

[Mickey Boland]

JC Jones,
I believe I said that golf-only was,in fact, a reasonable way to go for the existing members.
However, such a club will have great difficulty in attracting the younger guy.

Absent fresh blood,the club will wither away.
The golf-only model is only attractive to those for whom golf is very important.
That rules out a huge percentage of the younger market.

Your experience on member-owned clubs Boards may be different however. I can only relate my own.

JMEvensky,

You're correct, we can only relate our own experiences at individual clubs.

I've had the opportunity to review the budgets and the P&L statements from a number of clubs over the years, in addition, the accounting firm that does the accounting for a great number of clubs has provided us with a summary report, on a line item basis, comparing the club/s I'm familiar with, to the rest of their client base.

I don't think I'll be contradicted when I say that after looking at the restaurant (food & beverage) department, there's not one club that made a profit purely from the restaurant operation.  And, that the more meals served, the larger the loss for that department.
Hence, cultivating more utilization, HURTS the bottom line.

If the restaurant's utilization was so attractive for members, young and old, you wouldn't have to have a restaurant minimum, which is almost mandatory at clubs today

Pat,

You're exactly right when it comes to my club.  Food cost is in line with what the GM says it should be, but the food operation (not the beverage operation) is a consistent drain on the bottom line. 

[JMEvensky]

Of course most club dining operations lose money--so does tennis,swimming,and everything else;including golf.All are subsidized by the dues line.If each amenity is to be self supporting,you no longer have a country club--you have a community center.

So,how does becoming "golf only/oriented" make a COUNTRY CLUB attractive to new members,especially this Holy Grail of younger people?

It's OK by me if you shut down my fine dining,board up my swimming pool,and lock the door to my tennis building.I'm a long standing member for whom golf is almost all that interests me.

However,the original question is how will your club survive.For most clubs,attracting new members is a huge part of the answer.I submit that "golf only/oriented" is attractive to a miniscule percentage of this target market.

I concede that those clubs whose survival is more about retaining existing membership rather than attracting fresh blood would certainly benefit from concentrating on golf.I just don't know of many clubs in my area that are willing to shut the door on prospective young families,and IMO,that's what "golf oriented" will do.

[Carl Nichols]

I was lucky, and about 10 years ago joined, as an under-30 legacy, the full-service -- golf, tennis, pool, dining, workout facility -- country club that my wife grew up going to.  While I have a wife who's very understanding about my golf addiction, like Chip I would not have been able to justify joining a golf only club at that time -- and have a snowball's chance of adding one as a second club now! 

Golf is clearly the most important single piece of the club, but the other parts [except the workout facility] are all pretty important to us (a family of five).  I try to play early on the weekends, but often rather than heading home, I'll meet my family at the pool, where we'll have lunch and spend the afternoon.  My kids play a decent amount of tennis, we use the family dining room quite often, and I spend a lot of money in the "pub."  I can't remember the last time I ate in the adult dining room.

So the bottom line is that while golf is clearly the most important part of the club to me (and, I guess, my family), there's no way I/we would've joined if it was golf only -- at least for a cost somewhere around current club costs.