How will your club survive in 2010?

[J_ Crisham]

We Vietnam vets get no love?

Bill,  Whoops! Of course you guys get some love !  Any person that puts on a uniform to protect their country deserves respect for their sacrifices. My generation is very fortunate to have not had to step up to the plate for a draft. I couldn't begin to imagine that situation. And for the record you are still the best 12 hdcpr I have had the poor fortune to face!
                                                                                    Jack

[Bill_McBride]

We Vietnam vets get no love?

Bill,  Whoops! Of course you guys get some love !  Any person that puts on a uniform to protect their country deserves respect for their sacrifices. My generation is very fortunate to have not had to step up to the plate for a draft. I couldn't begin to imagine that situation. And for the record you are still the best 12 hdcpr I have had the poor fortune to face!
                                                                                    Jack

You would love to get a piece of me now!  The 12 has become a 14, the 230 yard tee shots now struggle to get to the 200 yard distance.  I may be forced to get serious about this!

And thanks for the love! 

[Shane Wright]

  
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PS. I am 47 years old, and I would be interested to hear the perspective of the younger guys here.

[/quote]

Mike,

I come from the younger group (33) and have a newer born which I hope to get involved in golf very early.  I don't know that I offer anything different other than a few thoughts.  We live in Minneapolis and as has already been mentioned, we have a very short season with reasonably high member dues.  I really want to join somewhere mostly because publics are extremely busy here and I have little time for long rounds.  I like early morning, quick walking rounds with enjoyable company.   If our little guy decides to play, I think the decision to join somewhere could be an easy one and I'm pretty sure I know the course.  It would help with my wife if she knew there were other things to offer besides golf, but knowing that a saturday morning round isn't going to take 6 hours is probably more important. 

But for now, the money I would spend on a private is used more for golf trips each year.

Somewhere you wrote where you joined a club overseas (I think Ireland) as a place for you and your son to go.   This would definitely be a goal of mine someday.  GB&I generally does a wonderful job of putting together overseas memberships and I hope they are still around by the time I/we are in the market.

I don't know that it would work here, but could some courses here offer the same to GB&I courses?   Exchange rates could make the travel feasible to many of our friends across the "pond."

[Jud_T]

Shane,

I think the only courses that could succesfully initiate an overseas membership program are those who are better regarded and are less likely having financial difficulty.  I think potential members come from two catagories, 1, those like myself who put golf first and would prefer a golf club for a variety of reasons, and 2, those who will only join a country club with all the trimmings.  I guess to Pat's point, in the current environment it's the former group for whom golf is one of the highest priorities that will still be looking for good golf at a fair price. 

[Mark Chaplin]

The cost of overseas membership would put off most from GB&I, overseas membership of top clubs here is usually between £200-400 per annum. I was informed a  top 10 east coast club was $5000pa, unless paid for by your merchant bank in order to entertain clients on the odd business trip it's not really viable.

[JMEvensky]

One thing seems apparent, new members aren't so easy to find. 
Clubs that ignore retention of their existing members are in for a rude awakening

That's it in a nutshell.

While every club has its own individual problems,retaining existing membership is the common denominator.If you can't keep your base happy,you open the revolving door of constantly seeking new members to replace the ones who are leaving.

Not so surprisingly,those clubs which keep existing members happy tend to get more new-member applications than they can handle.

[Bruce Katona]

I've probably written the following multiple times on this subject but here goes:

1. F&B at the club, if done expertly nets 10% of sales. Food will lose money, beverage will make money, ue to the cost of goods sold.
2. Unless the course is just awful, golf operations will always be in the black.
3. Provided you have reasonale levels of play, the Cart Dept. will be profitable.
4. G&A expenses are a killer - water, sewer and real estate taxes are a huge drain annually on the bottom line.

Traditionally Golf and cart revenue (2&3) can more than offset the losses of 1 & 4 above.


5. Fixed Costs -equipment leases, debt service need to be budgeted very carefully.  What Happens is 1-4 above should result in positive net Operating Income (NOI).  The fixed costs in 5, plus reserves for capital improvements, drage a positive NOI to a negative outcome if debt and lease expenses are too great.



The perfect model for a US course would be as follows:

1. Land cost is $0 or close to it.
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.
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.
4. Price play at 95% of the going market and you have a winner

Easier said than done.

[Roger Wolfe]

1. F&B at the club, if done expertly nets 10% of sales. Food will lose money, beverage will make money, ue to the cost of goods sold.

3. Small clubhouse with minimal staffing that offeres breakfast, lunch and afterround coctails.  No dinner of fancy menu.

The two statements above are simply not the case at most private clubs in the US.  The old clubs
do not do F&B "expertly" AND offer dinner and a fancy menu.  The new clubs do not have
"small clubhouses with minimal staffing."

Clubs need to adapt to become what you describe above... but getting them to ACCEPT the need
to adapt is, in many cases, impossible until its too late.

[Adrian_Stiff]

Bruce is totally right and this US model works good for the UK too. I have been involved in a lot of golf clubs at management and advisory level one story I continually tell is this and it backs up what Bruce is saying..... We had a golf club that turned over £1,200,000 in 2000. It made a profit of £250,000. The revenues were split about £600,000 golf income and £600,000 clubhouse income. The golf contributed £200,000 of those profits (33%) whilst the clubhouse yielded £50,000 (8%). The clubhouse split was even more interesting with a £150,000 profit on beverage coupled with a £100,000 loss on the food.

Ofcourse the probem sometimes is once your up and running its not so easy to change the model.

[Jud_T]

Obvious solution-keep beverage, 86 food...some premade sandwiches in a cooler or hotdogs and burgers on the grill should be fine. 

[JMEvensky]

Obvious solution-keep beverage, 86 food...some premade sandwiches in a cooler or hotdogs and burgers on the grill should be fine. 

Yeah,this will get people lining up to pay initiation fees and dues.

Unless the golf course is other-worldly,this is a prototypical muni course arrangement.That's what people are trying to avoid by joining a club.The 1500 purists on here excepted.

[Will MacEwen]

Is it fair to parse food and beverage?  Without some food offerings, the drink orders might drop off.

[Richard Choi]

Perhaps the solution is to go the opposite way. Instead of shrinking operation, you should expand it.

The tennis club that I mentioned earlier, has all the amenities; restaurants, cafe, spa, etc. But not because the tennis club is particularly large, but because tennis club is actually an arm of a much larger (and successful) health club.

Perhaps instead of shutting down all operations other than golf, you should expand and open up a huge health club and let the members of the health club support the restaurants and what not while golfers only have to play for golf operations.

Obviously, this is not going to work for many clubs as they are too remote. However, there are plenty of clubs in suburban areas that can take this road.

[Patrick_Mucci]

Bruce & Adrian,

Bruce's model does not work because it's theoretical.

Clubs are what they are, they can't suddenly reinvent themselves with a small clubhouse, etc, etc..

It's next to impossible to alter the physical plant and it's very difficult to alter the culture of the club.

"You have to dance with who you brung."

And that means modifying what you have, not what you wish you had.

[Jud_T]

I'm sorry guys, but in major metropolitan areas you can count the number of club dinners that can compete with the many great restaurants available in terms of food quality on one hand.  Of course it can be more than burgers on the grill, but the dated fancy faux french crap has got to go...

[Adrian_Stiff]

Bruce & Adrian,

Bruce's model does not work because it's theoretical.

Clubs are what they are, they can't suddenly reinvent themselves with a small clubhouse, etc, etc..

It's next to impossible to alter the physical plant and it's very difficult to alter the cultural of the club.

"You have to dance with who you brung."

And that means modifying what you have, not what you wish you had.

Bruce's model works well in most situ, and I have no doubt for the new club its the way to go. The demonstration being made is FOOD LOSES MONEY AT GOLF CLUBS. You are right you have to modify what you have, but remember sometimes if something is badly infected then the repair may be amputation. I think there are things that can be done in lots of situations and the cutural aspects of old golf clubs is dying, abiet slowy.

[Patrick_Mucci]

Adrian,

I think most agree that the "kitchen" is a losing proposition.

Many clubs have eliminated or downscaled breakfasts and dinners.
Especially on weekdays

To some, the food "minimum" seemed like a good idea.
I wonder if it's akin to raising with a bad poker hand.

If the club has to institute a minimum, is the product that good ?
Is the utilization that bad ?
Is the competition that good ?

If you lose more money by serving more meals, why force members to eat more meals ?

I think minimums were created to bolster up a shrinking/dying function primarily for cultural rather than financial reasons, or, maybe both.

[Adrian_Stiff]

In the UK I think golf clubs shoud look to raise money by finding ways to use inert landfill. It might be some perimeter mounding or some new tees, or even leveling some slopey ground. It might take an architects eye and a little investment but it is very possible for clubs to generate significant monies (in excess of £100,000) and have a better product. Possibly there could be some interim disruption like any construction programme, but the bare facts are a lorry load of subsoil is worth about £40. A year ago it was £70. I have built lots of courses for nothing using landfill but you would be suprised how a practice green can be improved and you get money.

[Patrick_Mucci]

Adrian,

In the U.S. taking fill from the course and exporting it isn't a simple proposition.

[Adam Lawrence]

I was at the Berkshire just before Christmas and was interested to learn that they recently made a substantial sum of money by accepting a quantity of fill - I think from the Heathrow T5 build - and putting it under the practice ground. You can see the additional material from a couple of spots, but it's far from obvious to the casual eye. Good business.

[Roger Wolfe]

I was at the Berkshire just before Christmas and was interested to learn that they recently made a substantial sum of money by accepting a quantity of fill - I think from the Heathrow T5 build - and putting it under the practice ground. You can see the additional material from a couple of spots, but it's far from obvious to the casual eye. Good business.

Interesting... things are different in the US.  We were lucky and allowed a contractor installing a 60" water main to bring all of their dirt and dump it on our golf course.  They saved $$ in the distance they needed to move it plus we had as much as we could use.  One of the main issues was the quality of the "fill."  The water line dirt was excellent since it was basically being laid in "virgin earth."  We had made this arrangement before with another contractor working at the local airport and the stuff he brought in was unusable.

[Dan Boerger]

Pat brings up some very interesting points. If dining is not supported by members, increasing the minimum is really nothing more than a band-aid. Members, from my observation, will only support this to a point.

I belong to a full service club that makes a strong effort (and succeeds) to build additional revenue from weddings, outings and guest play. They also work hard to vary the entertainment and social opportunities to members. Not all work to be sure, but if you're not trying new things, you're not going to grow (or maintain for that matter).

[Sean_A]

I have heard a lot of talk about all sorts of stuff, yet nothing about ditching mandatory cart/caddie programs.  Would this make a difference to folks trying to join a club?  How bout with retaining members? 

Ciao

[jonathan_becker]

I have heard a lot of talk about all sorts of stuff, yet nothing about ditching mandatory cart/caddie programs.  Would this make a difference to folks trying to join a club?  How bout with retaining members? 

Ciao

Sean,

Last year, I was set to get a junior membership at a top 100 course in Ohio.  The reason that I didn't was because every day before 4pm, I would have to take a mandatory caddie or a cart fee....and the cart fee was over $40!  So, to answer your question, if I could carry my own bag all the time, I would be a member.  But at 29 years old, I just can't afford it.  The caddie and cart fees would more than double my dues.

[Kevin Cahoon]

I have heard a lot of talk about all sorts of stuff, yet nothing about ditching mandatory cart/caddie programs.  Would this make a difference to folks trying to join a club?  How bout with retaining members? 

Ciao

Sean,
I believe the cost of mandatory carts/caddies has a large impact on attracting members. I am the chair of the membership committee at my club and I get asked that question on a regular basis. Potential members want an accurate idea of what real cost of their membership will be on an annual basis. The cost of a cart or caddie is not insignificant when you examine yearly use. In my case because I choose to walk that cost would be the equivalent of 4 months dues.

I would love to be able to change this requirement.  The other reality in the US is that carts are a revenue source for most clubs.